Big news: Comcast is talking to smart TV manufacturers about licensing their X1 platform.
Why this matters #1: Owning the smart TV platform/OS will go a long way in deciding convergent TV winners.
Consumers can watch streaming video on a TV in two primary ways:
1) Smart TV directly (Samsung, Vizio, etc.)
2) Streaming stick/box/console (Roku, Xbox, etc.)
Be smart: The Smart TV setup drives you to a) connect to the home wi-fi and b) download apps such as Netflix. Smart TV manufacturers want video streamed through their OS vs. a 3rd party device such as Amazon/Roku.
Quote from Sam Matheny – Chief Technology Officer @ National Association of Broadcasters:
“When the smart TVs first came out, you used to have to plug it in to an ethernet cable, and now all you do is unpack it and plug it in, and it detects the Wi-Fi, and away you go”
Why this matters #2: Building a world-class smart TV platform/OS is expensive, and small/mid-level manufactures face a build/rent decision.
Smart TV manufactures provide a smart TV platform/OS in two primary ways:
1) Build your own (Samsung, etc.)
2) Partner with a 3rd party (TCL, etc.)
Companies that license their smart TV platform/OS include:
Companies that want to license their smart TV platform/OS include:
Big question #1: What does Comcast gain from licensing their X1 platform?
Quick answer #1: Ad inventory. AVOD services give a cut of their inventory to smart TV platform/OS providers.
Quick answer #2: National footprint. Unlike traditional pay-TV providers (Comcast, etc.), streaming is national/global. Comcast would have a foothold for nationwide video service (Flex, Xumo, Peacock, etc.).
Quick answer #3: Control. Amazon/Roku is blocking Peacock. Owning a smart TV platform/OS eliminates those conflicts.
Total TV households:
1) Roku – 43.0M
2) Comcast Xfinity – 19.5M
Quick math: Smart TV platform/OS = new MVPD = gateway/control
Big question #2: Who has the largest smart TV footprint?
Quick answer: Samsung.
Share of Smart TV market by manufacture according to Comscore:
1) Samsung – 32%
2) TCL – 14%
3) Vizio – 13%
4) LG – 12%
5) Hisense – 5%
6) Insignia – 5%
7) Sony – 3%
8) Sharp – 3%
9) Other – 13%
Head start: The Roku OS was on ≈ 1/3 of smart TVs sold last year.
Smart TV manufactures who license Roku OS include: