CTV, CES And The TV OS Wars

DALL-E

I was commiserating with my friend Evan Shapiro last night about a number of things, including how, in 2023, the CTV OS Wars will be the most important battle in all of streaming. 

“Rather than focusing on the wet hot mess that is the current Metaverse,” Shapiro noted, “The CTV OS Wars should be THE top topic of CES!” (He tends to speak passionately, hence the capitalization.)

He’s right though. 

While half the coverage around CES is focused on the machinations of modern day media moguls, their erstwhile streaming empires and who is talking smack about who behind their back, the other half is focused on this amorphous thing called the metaverse that few people seem to be able to define and fewer still seem to actually care about.

Meanwhile, one of the biggest battles in the TV industry is underway and because it is largely taking place outside the borders of the United States, it is being ignored.

I’m talking about the battle for control of the TV operating system, the interface that governs viewers' interactions with their TVs and programmers' interactions with viewers.

And data.

Lots and lots of data.

The U.S. market is fairly locked up at this point. We’ve been at this streaming thing longer than just about anyone else, and the market is close to the saturation point. There’s not much blue sky, green fields or white space (choose your color metaphor) left for the taking.

(If you’re keeping score, Samsung, LG and VIZIO won the smart TV game, Roku and Amazon the connected device competition.)

That is not the case outside of the U.S. where control of the TV operating system is very much up for grabs.

On the one side, you’ve got Team Consumer Electronics, Samsung and LG, who are looking to replicate their success in the U.S. market. 

On the other, you have Team Internet, Google and Amazon.

There’s a third team too, we’ll call them Team Independent, consisting of companies who do not make television sets but, rather, make customizable operating systems for streaming TV that they sell to smaller manufacturers in less developed markets.

Take Foxxum, for example, a German company that just announced new partnerships with five OEMs and manufacturers from around the world for their newly launched Foxxum OS4, representing global brands such as, Konka, TCL MOKA and two JVC licensees, spanning across three continents.

They understand their place in this world is to provide a counterpoint to the big players, because big players are not for everyone.

“The margins of TV sales plummet every year,” explains Dirk Wittenborg, Executive Chairman.  “That is why Foxxum is focused on filling the void created in the cracks between companies like Amazon, Roku, Google TV, Samsung and LG. That is our CES story.”

Why The TV OS Wars Are A Big Deal

Whoever owns the smart TV interface wields a lot of power.

They are the gatekeepers for programming: which apps to allow on the interface, how easy they are to find, how much those programmers have to pay to have their content featured on the home screen.

Owning the OS also gives those companies a lot of data about program and ad viewership that they can both monetize and use to improve the consumer experience.

It also allows them to create alternate revenue streams around both tune-in advertising and advertising on their own FAST content plays. In addition, there are revenue splits if they are able to help SVOD services sign up subscribers.

This additional revenue in turn allows them to keep the prices of their TV sets low, which is key in emerging economies where most consumers are used to watching TV on their mobile phones and a TV set is still considered a major purchase.

This is why many of the content producers in those countries are counting on continued competition. They see how easy it would be for the giant U.S.-based streaming companies to push them aside, and are counting on local OEMs to help them continue to thrive.

“For content publishers, especially those in emerging economies, independent OS players are the only way to create the sort of vibrant competition that guarantees a sustainable model in the long term,” notes Ronni Lutzi, Foxxum’s CEO. “That is why having an independent option is so important in these markets.” 

It is estimated that the TV OS market in around 40 percent of the world is still up for grabs, most of which is in regions where the question of who will control the content market is up for grabs as well.

That is why the competition over the TV OS is so hot right now and why it’s something that everyone from advertisers to streamers with global ambitions should be paying attention to, both at CES and beyond.

Let Zuckerberg worry about the metaverse.