It was business as usual for the biggest smart TV manufacturers at CES 2017. But change is in the wind for the smart TV market, and we could see big changes at CES 2018?
Mandatory functionality, too costly for many
TV manufactures recognize smart TV functionality is now a mandatory feature for most TV shoppers. However, they have come to realize the costs to develop, maintain, promote, and extend their own platform cannot be offset against any uplift in revenue from the feature. Simply put, it is a checkbox item that no longer commands a premium price.
A better strategy for TV OEMs, and their customers, is to hand the burden of the smart TV portal to a company better positioned to support and monetize it. Many are now doing this.
Streaming media player providers step up
Streaming media player manufacturers have stepped into the breach to license their platforms to smart TV manufacturers. This makes a lot of sense for them. Their business models are supported by as broad a distribution as possible for the apps and channels they bring to their users. They also have teams in place to handle the development, maintenance, and support of a robust app delivery platform.
The first streaming media player manufacturer to take this course was Roku. It’s Roku TV platform can be found on Hitachi, Insignia, TCL, Haier, Hisense, and Sharp televisions. Part of the success of Roku in this market is that it has 10 times as many apps and channels available through the platform than any of its competitors.
Earlier this year, Amazon began licensing its Fire TV platform to Seiki, Westinghouse, and Element manufacturers for their higher-end TVs. The Fire TV Edition includes Amazon’s very successful Alexa intelligent assistant.
Google is not licensing the Chromecast platform to manufacturers. It is, however, offering up its Android TV platform. Two OEMs have models in market leveraging the platform: Sony and Sharp.
Expect all but the very biggest TV manufacturers to abandon their own platforms this year and move to Roku TV, Fire TV, or Android TV in time for CES 2018.
The biggest manufacturers stay the course, maybe
Not all manufacturers are ready to abandon their own smart TV platforms.
Samsung, as the largest consumer electronics company in the world, will continue to develop and promote its own smart TV platform, Smart Hub. Based on the proprietary Tizen OS, Smart Hub is strategically important to Samsung. It allows the company to establish an ecosystem spanning smartphones, tablets, and even washing machines and refrigerators. Watch for the company to introduce new interface innovations at CES 2018. As well, it will draw in IoT and eHealth functionality to cement its emerging ecosystem.
LG’s webOS is a very capable smart TV platform, with advanced features and attractive design. However, the company cut the webOS development team dramatically late in 2015. It could be the company is looking to further reduce costs and focus on the hardware. Watch for new LG TVs at CES 2018 supporting one of three streaming media player platforms already discussed.
Finally, Vizio, the second biggest US TV manufacturer, likely will abandon its Internet Apps Plus smart TV platform in 2017. However, don’t expect it to embrace Roku, Google, or Amazon platforms. Chinese company LeEco has agreed to buy Vizio for $2B. The sale is still wending its way through regulatory approval in China and the U.S. Assuming it goes through, all Vizio TVs will be converted to use LeEco’s entertainment user interface (EUI). This is a critical component of the company’s broader content strategy which has already been delivered in the U.S. on the company’s smartphones.
Why it matters
TV manufacturers must provide smart portals in their TVs.
These portals are cost a lot of money to maintain, but consumers will not pay anything extra for them.
Many more TV manufacturers will abandon their own developments, and hand it to Roku, Google, or Amazon.
That said, Samsung, Vizio, and, perhaps LG will continue to steer an independent course.