1. LG Buys Stake In Alphonso

LG, one of the Big Three US TV manufacturers, bought a controlling interest in TV data and analytics firm Alphonso this week. The stated goal is to jump start an ad platform for LG and its FAST, LG Channel Plus, using Alphonso’s software and data from over 20 million connected LG TVs.

Why It Matters

LG’s main rivals, Samsung and VIZIO both already have data-driven ad platforms based off of their FASTs, so it’s a smart move for LG to catch up.

It’s also more ammunition in a war that’s been heating up for some time now: will viewers continue to flock to streaming devices like Roku, Amazon and the updated Google Chromecast, or will they discover the vastly improved interfaces on their smart TVs?

At stake are billions of dollars of ad revenue and viewer data, so the answer to that could prove to be a blow for Amazon if the smart TV operating systems gain traction. (Roku claims their OS is now found in 38% of the smart TVs in the US, so they are in good shape whichever way this shakes out.)

The Alphonso deal will allow LG to take better advantage of the data they collect from opted-in viewers and to use that data to target ads against specific audiences. Taken together, the three big smart TV OEMs constitute a sizable market that will provide a counterweight to the ad-supported versions of Flixes and the network-owned FASTs, giving advertisers a way to reach an audience they may be missing elsewhere.

What You Need To Do About It

If you’re LG, Samsung and VIZIO, you might want to think about creating some sort of alliance that makes it easy for advertisers to buy inventory across all three platforms. You are likely reaching the same types of audiences but with little overlap, so it would seem to be a win/win situation.

You should also do more to promote your improved interfaces--my suspicion is that too many people just immediately slap their Roku or Fire TV onto whatever new TV they buy and call it a day. If you can make user experience a real point of difference, that can be a key selling proposition.

If you’re a brand marketer, you should definitely look at advertising with smart TV OEMs as you will get audiences you are likely missing elsewhere and very complete data about those audiences to boot.

2. Roku and Amazon Pass 50M Users

Roku and Amazon Fire TV each claimed to have more that 50 million users, though both numbers are self-reported and self-defined. So while Roku calls its viewers “active accounts”, Amazon calls theirs “active users.” While there’s not much in the way of definition for each term and how they might differ, it’s clear that both companies have viewers who are indeed very “active” in some way and that the number of such users is indeed growing.

Why It Matters

Roku’s numbers, released this week, have them at 51.2 million active accounts, which may or may not be more than Amazon’s less precise “more than 50 million” number.

Both are the clear leaders in the space, having boxed out Apple due to its absurdly high price point ($180 versus $29 or less for Amazon and Roku), and Google due to its lack of a remote control. (The newest iteration of Chromecast finally adds a remote, but it’s going to be a tough sell to get people to switch at this point.)

Right now the biggest threat to both, Amazon in particular, are the smart TV OEMs.

Quick refresher: the only reason streaming sticks got any traction is that the interfaces on early smart TVs were fairly awful, featuring a limited number of apps, no ability to update existing apps and maze-like navigation.

So users turned to low-priced streaming sticks and never looked back.

Now that the smart TV OEMs have gotten wise and completely revamped their user experience, the question is whether viewers will catch on and dump the sticks.

Roku has wisely bet on both sides of this equation, striking deals to install its operating system into many low-priced mostly Chinese-made sets so that this week they have enough installs to claim they have surpassed Samsung as the number one TV operating system in the US, with 38% of the market.

Amazon has been slower to get its Fire TV OS into sets, though given their massive amounts of cash, they can likely make that happen should they want to.

Now as for why all this really matters, it’s because Roku and Amazon are now playing a role very similar to MVPDs in that they are gatekeepers for new apps and the inability to strike a deal with one or both can severely limit an app’s viability, as Warner found out to its dismay this year with HBO Max.

Both want a share of data, subscription and ad fees, and, in the case, of Roku, some exclusive library programming for The Roku Channel.

So the more of the market they control, the more powerful they are.

What You Need To Do About It

If you’re a smart TV OEM, make sure your user interface is as good as, if not better than Roku and Amazon and then let people know it exists as they are unlikely to discover it on their own.

If you’re a new streaming app, make nice with Roku and Amazon as they really can make or break you. And given that all Roku wanted from Peacock was Xena: Warrior Princess, it’s not like they’re going to be asking you for your best programming.

If you’re a brand marketer, yes both services have walled gardens, but they remain excellent ways of reaching the viewers you are missing on linear.