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State of the Screens

Alexa, Turn on My Amazon TV

By September 16, 2021No Comments

Big news: Amazon is moving beyond licensing its smart TV OS and producing the entire TV.

Big picture: Roku and Google both license their smart TV OS, but Amazon is the first to sell a TV itself.

Why this matters: The reality of streaming TV is hardware providers are taking the place of cable TV companies as gatekeepers in distribution battles.

Shots fired: Walmart asked Vizio to remove the Amazon Prime button from the remote of any TV sold in a Walmart.

Flashback #1: Streaming Wars Moving Upstream

Flashback #2: The Smart TV Wars Heat Up

PSA: Alan Wolk and the team at TV[R]EV released a report on the smart TV ecosystem.

U.S. Smart TV households (YoY growth) according to TV[R]EV:
1) 2021 – 44M
2) 2022 – 57M (↑ 29%)
3) 2023 – 68M (↑ 21%)
4) 2024 – 81M (↑ 18%)
5) 2025 – 90M (↑ 11%)
6) 2026 – 93M (↑ 4%)

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U.S. Smart TV ad revenue (YoY growth):
1) 2021 – $1.4B
2) 2022 – $2.4B (↑ 72%)
3) 2023 – $3.4B (↑ 42%)
4) 2024 – $4.4B (↑ 31%)
5) 2025 – $5.6B (↑ 28%)
6) 2026 – $6.2B (↑ 10%)

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Mr. Screen’s Crystal Ball: Amazon could quickly grow share by pricing their smart TV well below their competition.  The TV would serve as a loss leader, and they would turn a profit on advertising.

Quick math: The TV[R]EV projection would lead to the average smart TV household generating $305 in ad revenue between 2021-26.  My guess is this will turn out to be wildly low as more marketers prioritize audience targeting and measurement.

U.S. Smart TV ad revenue per household (YoY growth):
1) 2021 – $31.28
2) 2022 – $41.77 (↑ 34%)
3) 2023 – $48.98 (↑ 17%)
4) 2024 – $54.52 (↑ 11%)
5) 2025 – $62.61 (↑ 15%)
6) 2026 – $66.20 (↑ 6%)

Video: Amazon TV is the next step for company to move into internet of things: Analyst

More: Amazon is making a TV and I have many questions

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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