What Display Daily thinks: What would happen if you didn’t smartphone screens that were any brighter or bigger? What would be left? Applications, services, maybe AI now?
But smartphones are mobile, out in the world, and then there’s the whole thing with improving cameras and foldable displays. The smartphone screen needs to change. TVs on the other hand just need to grow. Double down on bigger TVs.
Which is what makes this set of data so interesting. There is every reason to assume that the TV market is, in many ways, akin to the smartphone market in so far as it about user experience, apps, and services, and advertising. There isn’t quite a market, yet, for in-app purchasing or subscriptions outside of traditional streaming and video, but it is bound to get there.
The only thing that makes TV’s different is that the screen doesn’t have to change much. Just more size for your buck. We are not too far off from the point went the TV is almost given away for the advertising eyeballs and subscription payments.
The world of digital advertising is being squeezed by the virtual monopolies of Google and Meta online which is forcing advertisers to look for new avenues to get to audiences. There are far too many layers between them and consumers on the web, all guarded heavily and opaquely by Google and Meta. The TV world is a lot simpler, and easier to understand. It’s about as direct a connection as you could hope for.
Samsung, Apple, Amazon, and LG. That’s a formidable group growing market share in this business. Let’s hope that they are growing the market and not just squeezing Roku.
Roku Under Pressure from Amazon, Apple and LG
Pixalate has provided a comprehensive analysis of the global connected TV (CTV) device market, focusing on programmatic advertising share of voice (SOV) for the third quarter of 2024. It’s an interesting set of data points that shows the increasing influence of software and advertising in the CTV market, a fact that is reshaping the TV industry.
Roku remains the leader in the global CTV market with a 37% share of voice. However, it has seen a significant year-over-year decline from 52% in Q3 2023. Following Roku are Samsung Smart TV, Amazon Fire TV, Apple TV, and LG, holding respective shares of 17%, 15%, 11%, and 10.8%. The report highlights that Roku’s market dominance is waning as Apple TV, LG, and Amazon Fire TV are experiencing growth.
Roku’s decline in market share is particularly notable, dropping 29% YoY. In contrast, Apple TV and LG have shown impressive growth, with Apple TV’s SOV rising by 61% from 7% to 11% between Q3 2023 and Q3 2024, and LG’s SOV increasing by 85% in the same period, from 6% to 10.8%. Amazon Fire TV has also maintained a steady growth trajectory, increasing its market share by 39% YoY, moving from 11% in Q3 2023 to 15% in Q3 2024. This upward trend for Apple TV, LG, and Amazon Fire TV suggests that they are gaining traction as more prominent players in the CTV advertising ecosystem.
The idea of TVs being given away for free, with the cost offset by revenues from apps, services, and advertising, is becoming increasingly plausible. The television industry has already seen major shifts in business models as streaming services and connected devices have become dominant. In many ways, this concept mirrors what we’ve seen in other industries, like mobile phones, where devices are heavily subsidized or offered for free in exchange for long-term revenue from data plans or app usage.
Companies like Roku, Samsung, LG, and Amazon are increasingly relying on advertising revenue, where ad-supported content is integrated into the interface of smart TVs. This model could be expanded to subsidize the cost of the hardware itself. As more content is consumed via streaming apps that include ads, the potential for revenue-sharing from these ads increases. Companies could potentially give away TVs if they can guarantee a steady stream of advertising dollars over the life of the device.
The data collected by smart TVs — viewing habits, app usage, demographic information, and more — is extremely valuable for advertisers and content providers. By giving away TVs, manufacturers could potentially monetize this data over time, making it financially feasible to offer the hardware for free. This data, when combined with targeted advertising, could yield a steady stream of revenue that outweighs the initial cost of the TV.
The tech companies may begin offering free TVs bundled with long-term subscription commitments to their streaming services or other digital ecosystems. For instance, a company like Amazon could give away TVs in exchange for a multi-year Prime membership, or Apple could do so in exchange for long-term subscriptions to Apple TV+ and other services. Similar to how smartphones are bundled with cellular service plans, TV makers could create contracts that bundle streaming services or exclusive content.
The rapid rise of ad-supported tiers in streaming platforms such as Netflix, Disney+, and Max shows a growing acceptance of ad-supported content among consumers. This increasing normalization of ads makes it feasible for manufacturers to lean heavily into an advertising-based revenue model, where a free TV is a gateway to engaging users in a long-term ad ecosystem.
There are precedents in other consumer electronics and technology spaces. For example, mobile phones are often offered at no cost or at significantly reduced prices in exchange for a subscription plan. Game consoles are sometimes sold at a loss because manufacturers know they can make money from game sales, online services, and accessories. This logic could easily extend to TVs.
