TV's Quiet Battle For All The OS Marbles
Can anyone become the Google or Apple of smart TVs - and own the home?
There is a battle being fought in the media shadows that could determine the future of advertising, entertainment and maybe even commerce. And I still feel like it’s not getting enough attention.
Who’s going to own the TV OS?
Put another way - can any TV player ever match the power that Google and Apple have in digital media and mobile?
I recently spoke with Tal Chalozin, CTO and Co-Founder at Innovid about the future of the TV ecosystem on the Next in Marketing podcast I host on behalf of AppsFlyer. Given that Tal has been tracking the rise in CTV from the get-go, it’s well worth a listen. Here’s what he said about the likes of Google, Roku, Apple, LG, Samsung, etc. viewing to become the centerpiece of the home (and the hub for all the tech a family uses).
“Historically the owners of the operating system were the winners in any computation revolution...right now we see the fruits of that.” Tal is referring to the fact that as powerful as Facebook is, as massively popular as Epic Game’s Fortnite is, Apple can seemingly decide on a whim to severely rock both companies’ businesses.
“I'm sure that same thing is going to happen in the world of television.”
To his credit, LightShed’s Rich Greenfield has been all over this topic -and he recently shared a snippet of Comcast CEO Brian Roberts laying out details of the company’s Sky Glass product - which makes the cable giant’s foray into making TVs and TV software:
“Comcast has been in the TV business for 60 years,” Roberts said. “And there have been a few big moments with the potential to be transformative. And you know what? This could. be one of them.”
Sure seems like it. But is Comcast really going to be the one to deliver it? I’ve never lived in an area where Comcast’s cable service was an option - though I do hear good things about the company’s more modern Xfinity set-top box. Still, are most consumers going to want to buy hardware from the cable company - which they associate with high bills, long waits and service outages? Seems very deliberate that the Sky brand is front and center over Comcast’s name.
I have similar questions about Amazon’s coming entry into TV - yet really, I’d have questions about any manufacturer’s attempt to win the user interface wars, given it’s such an unnatural one. Ten years ago, most people didn’t know who made their TV, they knew who their cable provider was. Even today, as slick as Smart TVs are, people pick them up for $200 at Costco.
I also spoke recently with Justin Fromm, Head of Research at LG Ads, for another podcast episode (not live yet). Justin talked about how LG is both looking to become a programmer by pushing free on-demand content, but its ace in the hole is an analytics and intelligence product. TV manufacturers like Vizio and Samsung have launched ad business because they know they’ve potentially stumbled into something big, since they know who you are and what you watch - two very valuable OS advantages.
Of course, the LGs and Samsungs of the world are borrowing heavily from the Roku and Amazon Fire playbooks. Build an app store for TV. Become the way people navigate through their favorite content. Build out your own ad tech, collect proprietary data, establish a proprietary way of identifying users, and then insist on selling ads for some if not all of the companies that distribute apps through your OS.
You’ve already seen some OS vs. media company battles emerge, including a recent row between NBCU and YouTube TV. So far, these are playing out more like classic cable carriage battles (call your local operator to make sure they don't drop MTV) and not like existential crises created by the likes of Apple and Google in the online world.
Speaking of those two titans, it’s rather curious as to why Apple hasn’t gotten more aggressive in taking on Roku with its Apple TV devices - though I supposed that it’s far more interesting and lucrative to try and battle Netflix and reinvent Hollywood. (it’s also curious that Facebook seems to have zero interest in TV).
As for Google, well, I’d all but given up on them in terms of challenging the TV ads status quo. But as Greenfield has chronicled, the company has gotten rave reviews for its latest Chromecast devices. And perhaps less noteworthy, earlier this year Google partnered with Walmart on a TV dongle, and also inked a deal with TCL to get its software into TVs - partially displacing Roku.
As Innovid’s Tal put it: “I think this is massive news,” he said. “This is a canary in the coal mine type of moment.”
But just how big is the impending coal mine avalanche? Can any one of these players actually roll up enough market share to throw significant weight around? Right now, it’s not just the TV makers and device makers, but gaming console makers and other dongle entrants.
As I understand it, the leaders - Amazon and Roku - require most apps to let them sell some ads, but they make exceptions for big CTV players like Hulu or Paramount+
Would a Roku or a Samsung or a Google Whatever TV ever get so powerful that they’d insist on being given more ad control - or else?
Would a TV OS provider ever drop a big network?
Would people switch TV brands to make sure they could get certain content?
On the flip side, could a TV OS leader ever become so powerful and data-rich that TV networks would want to give over more of their ad inventory - because they’d make more money letting a Google or Amazon sell targeted ads on their behalf?
Or does TV ultimately become so fragmented that nobody wins, and we all just end up with a few dozen more walled gardens?
I don’t know! But when I think about who I want running the central tech hub, I just want somebody who is good at helping me find a show among the 5,000 apps, channels and VOD interfaces I have to sift through most nights. You know, somebody who’s really good at search.
In the meantime, I’ll just sit back and let the war for home play out. I never leave here anymore anyhow.
Very quietly, every TV manufacturer's CEO work up one morning and realized they were no longer in the hardware business. They are the tip of the sword in the distribution, monetization, and measurement business of all TV. And the kicker is, it does not matter how the program got to the glass...over the air, cable, OTT, or internet. They are in the driver's seat.
They will make 10x (or more) profit on the lifetime of each TV than they do on the sale of the actual device.
Where’s open source in all of this?