TVOS wars heated up in 2023

Competition to own the living room TV experience heated up in 2023 as new players entered the TVOS space and existing providers looked to strengthen or expand their position.  Here’s a look at how TVOS ambitions gained traction over the past year.

Roku kicked things off in January with the debut of its first branded smart TVs – following an earlier move by competitor Amazon to do the same. Roku already licenses its OS to third-parties but building its own TV sets offer opportunities both in terms of data and new revenue streams via advertising – avenues smart TV makers like Vizio and others have also worked to capitalize on.

Branded smart TV efforts came as both Roku and Vizio executives suggested this year that the era of the streaming dongle is dead and earlier data from Parks Associates’ found sales of connected TV media players plateaued as consumers shifted favor to smart TVs.

At the top of the year Comcast and Charter’s Xumo joint venture also made moves, announcing its first branded smart TV with OEM partner Element.  Adding another player to the mix, Xperi executives in February outlined its strategy for the TiVo OS – which by then had already snagged two OEM customers including Europe’s Vestel.  Xperi previously acquired smart TV software-maker Vewd to bolster its TVOS efforts.  With an aim to compete against the likes of Roku and Amazon, Xperi cited the company’s aim of winning over OEMs with favorable revenue sharing, including from FAST services, and the ability for manufacturers to keep their own branding.

In a February column on StreamTV Insider, TVREV analyst and co-founder Alan Wolk explained why TiVo’s deal with Vestel was noteworthy.

“While it is easy to view the OS Wars as a battle between two sets of well-known global behemoths – Amazon and Google (Team Internet) vs Samsung and LG (Team Consumer Electronics) – there are many local manufacturers out there who are looking for an independent OS,” wrote Wolk.

Wolk also nicely summed up multiple reasons why the TVOS wars are so key.

“Whoever controls the OS controls what content goes on the TV: which apps, what order they appear in, how they’re recommended to viewers, which ones are pre-installed. They also get to create revenue for themselves by selling ad space on the home screen to programmers that want to promote their own shows and/or apps,” Wolk noted.

And while in the U.S. competition is already stiff, “the rest of the world is still wide open,” he noted at the time.

By November Xperi had racked up four OEM partners, including Sharp, to integrate TiVo’s operating system into their European 2024 smart TV lineup. And executives reiterated expectations for distribution of the TiVo OS in the U.S. in 2024 among more than one of the partners it’s signed.

A month earlier the Xumo JV jumped further into the TVOS game with the debut of the Xumo Stream Box device, powered by Comcast’s Entertainment OS. The device aggregates search and discovery for content across linear, streaming and built-in apps and is being offered to Comcast and Charter internet customers.  The JV plans to license the device to other operators, with Mediacom signed on as a partner.

TVREV’s Wolk also noted Comcast’s global ambitions including through its existing Sky operations and said, “the truth is that the [TVOS] market is so big and there’s so much up for grabs (especially outside the US) that even getting a couple of percentage points of market share will be worth billions.”

And after seeing a demo of the Xumo Stream Box with its Entertainment OS aims, and given the size of Sky’s existing footprint, “I’d say the OS Wars have a solid new participant,” Wolk wrote in October.

With so much opportunity to be had in TVOS, some players eyed new strategies in 2023. Smart TV maker Vizio has long promoted its ownership of hardware and software, but in the third-quarter disclosed exploring licensing its TVOS to third-party OEMs for the first time. Executives said it would be seeking partnerships with TV OEMs that want alternative options for OS in the U.S. market, with CFO Adam Townsend citing “real demand for something different in the market” based on early conversations.

He said Vizio captures around 11-12% market share of the 40 million annual units in the U.S. TV market so there’s a large opportunity to expand Vizio’s total addressable market. It also provides opportunities to scale its advertising business.

“The more we can expand our platform into the market, the more we can scale our advertising business, the more viewership we can take advantage of,” the CFO said in November. And as that happens, it makes Vizio a more important partner for advertiser and content partners, Townsend said, citing “across the board benefits.”

However, analysts agreed Vizio will need to do something special to woo OEMs in what’s already a competitive market, be it through more attractive revenue or data sharing terms.

“The greatest challenge that newer entrants to the TVO-OS licensing space face is the magnitude of competition and viewer’s loyalty to their current TV user experience,” said John Buffone, VP and industry advisor at Circana. With more than a handful of players already vying for share, it’s “a hyper competitive landscape,” Buffone told StreamTV Insider.

It wasn’t just new entrants that stoked the TVOS flames this year. Existing leaders such as Google TV and rolled out a revamped TVOS user interface with a ‘Live’ tab that aggregates more than 800 streaming channels including from virtual MVPDs – and importantly, was also exported to Android TV devices. Amazon Fire TV, meanwhile, launched Fire TV Channels – the platform’s flagship free streaming experience, among other improvements.

And the TVOS wars heated up in 2023 as the U.S. is poised for smart TV refresh cycle. February data from Circana found that over a quarter of installed TVs are now seven years or older, the highest proportion reported since February 2020. Most TVs are 6.6 years old when they’re replaced, and the average age of installed smart TVs in the U.S. are now 5.2 years.

“The aging installed TV base is a positive indicator for TV manufacturers and retailers because consumers who purchased TVs earlier in the pandemic will soon be ready to replace them,” Buffone said in a statement.

With several new players on the market, consumers have no shortage of TV platforms to choose from. And while competition for TVOS is fierce, it’s an area where there could be room for more than one winner in 2024 and beyond.