The Future of TV Briefing this week examines how Roku’s entry into smart TV manufacturing reflects the evolving state of connected TV.
- Big-screen battle
- The TV Advertising’s initial model will not disappear
- What is the U.S. Joint Industry Committee (USJIC)?
- Netflix’s TV chief, the TV-to-streaming-to-short-form turning point, Roku’s misinformation problem, Nielsen’s new measurement service and more
Roku’s recent decision to make its own smart TVs seems to be a reflection of two changes in the connected TV hardware industry: Smart TVs have taken over CTV devices like sticks, dongles and pucks. Smart TVs are the most popular way to connect a TV with streaming services.
Tim Nollen of Macquarie, an analyst in media technology at Macquarie, stated that Roku is likely thinking “we’d better make TVs as well as to hedge ourselves, maybe even protect ourselves against any further competition evolve,”.
Roku is now the dominant player in America’s CTV market. According to Parks Associates, market research firm and consultant, Roku accounted for 40% in U.S. CTV device installations during the third quarter 2022. In the second quarter 2022, 33% spent streaming video using any type of device, including TVs, phones, computers, and laptops. According to Conviva, video measurement and analysis firm, Conviva, the Roku-powered TV was more popular than other platforms like Amazon Fire TV, Samsung smart TVs, and Apple iOS.
Roku isn’t as dominant outside of the U.S. however. Conviva’s report found that Roku was not among the top five devices in Africa, Asia and Europe.
Roku reported last week that 70 million accounts are active, up from 65.4 millions at the close of Q3 2022. However, “Roku remains mainly just U.S. “They haven’t had much success outside,” stated Alan Wolk (co-founder, lead analyst at TVRev).
Roku only plans to sell smart TVs in America, but that is not what they have announced. Roku’s plans to sell smart TV hardware in the U.S. are not likely to be a success internationally. However, it may help the company to stay afloat domestically.
According to Conviva, smart TVs have moved ahead of CTV televisions, with 35.3% streaming video time being viewed by them in Q2 2022, compared to 34.6% for CTV. CTV devices have been encouraged to make their own smart-TVs by the rise of the smart TV. Amazon launched its smart TVs in September 2021. Comcast followed the lead in October 2021, and formed a joint venture called Xumo with Charter pay-TV provider. This partnership plans to launch a range of smart TVs later this year.
The smart TV market is becoming more competitive. There are more TV manufacturers and more CTV platforms that power it. This could mean that the U.S. CTV marketplace will more closely mirror the international CTV markets where Samsung and LG have larger share than in the U.S.
Here’s an illustration from S&P Global Market Intelligence, Kagan’s media research team that shows how CTV platforms worldwide differ from those in the U.S.
Here’s how to break down the global marketplace:
The graphics clearly show that the CTV platform landscape in global markets is very different to the U.S. with Samsung and LG enjoying a greater market share than Roku and Amazon. They primarily sell CTV devices but license them to third-party TV manufacturers.
Samsung and LG are both global brands that dominate all markets. Wolk stated that they are both present in almost every country around the globe.
Roku selling its smart TVs may be an attempt to keep its CTV platform safe from being overtaken by other smart TV manufacturers’ CTV platforms. This could also be a move to protect its CTV advertising business, and boost it from rising competition.
Owning the smart TV hardware is better than providing the CTV platform that powers a TV. Roku U.S. brand marketing head Kristina Shapard explained to AdExchanger that Roku can have more control over the way it inserts ads onto its platform if it has the smart TV hardware. Roku will likely be able to gather more information about the content that people view on smart TVs owned by it, such as programs the company has access through its CTV devices. This could allow the company to sell ads on the platform.
Seth Shafer from Kagan, senior research analyst, said, “It is beneficial when working with advertisers that you can give this united view that, in the dongle world, it may not be possible to make that happen.”
Roku might also use its smart TVs as a way to assist in the development of the platform that it licenses out to third-party manufacturers. This would help Roku compete with Google and Amazon who are looking to get their own licensing agreements.
The company is going to increase its innovation speed with the Roku-branded TVs. These TVs are basically Roku’s testbeds for developing more appealing features, and making them available to the entire Roku TV. [platform licensing] program. Roku TVs could be used in conjunction with their TV licensing program. This allows them to deliver innovations to licensees faster,” stated Nikhil Lai (an analyst senior at Forrester).
The international battle for big screen is the bigger one. The market is already dominated by Samsung and LG, with Roku’s main CTV platforms rivals, Amazon and Google, making inroads abroad. Roku has remained primarily focused on North America and parts Europe.
Google and Amazon are making deals with different companies [TV manufacturers] Wolk stated that Europe will deploy Android TV or Fire TV on those TVs in order to create new smart TVs.”
Google appears to have gained market share in the CTV platform marketplace, in large part by increasing its international presence. I know this because I have been to Singapore and Australia several months back, speaking with clients, so that I understand the importance of Android. [TV] Nollen stated that the company “practically dominates” the market in this region. Google last week announced its CTV platforms Android TV and Google TV, which have combined monthly active devices of 150 million — that’s two CTV platforms Google owns for some reason.
Roku needs to catch up. I think that their brand recognition has fallen. [outside the U.S.] Nollen stated that their market presence in the real world is very low. Nollen added that there is a lot of growth potential. They’re a little behind, but they have been able to lead the country in many ways.
We’ve heard it all
We’ve witnessed shifts in TV markets with top-level directors who were forced to make limited series. The limited-series format is likely too costly. We hear this. International directors at high-ranking are encouraged to perform low-cost, local-language ‘drama within a single room’.[shows]. This is a significant shift.
• International Production Executive
The TV Advertising’s initial model will not disappear
The 60-year-old TV advertising upfront model could be almost inexplicable.
The upfront’s commitments for a year have been financially restrictive. TV advertisers continue to look for economic security in upfront models’ revenue guarantees and pricing certainty.
You need to know the numbers
9.6 million:The average number of people who tuned in to each stream of Amazon’s Thursday Night Football was.
-8.1%:In 2022, the percentage of U.S. TV advertising spending declined year over year.
-$500 million:National TV advertising spending deficit in the fourth quarter 2022, versus Q4 2021
14.6%:Share of television ad impressions aired by CBS on 2022
94:Sporting events accounted for 100 of the most watched TV shows in 2022.
$74.99:FuboTV streaming pay-TV subscription starting at $99 per month
What is the U.S. Joint Industry Committee (USJIC)?
Five TV network owners, Fox, NBCUniversal and Paramount owned Fox, NBCUniversal TelevisaUnivision, Warner Bros., TelevisaUnivision, TelevisaUnivision, Paramount, TelevisaUnivision, Fox and TelevisaUnivision. OpenAP, VAB and Discovery announced that a group was formed to establish measurement standards for the U.S.
The U.S. Joint Industry Committee is being called. It seems like the US Joint Industry Committee will be the American version of the Joint Industry Currencies, which exist worldwide and consolidate measurement currencies. In the U.K. for example, the JIC named BARB supplies the measurement data TV ads buyers and sellers use to make transactions.
If someone says that a program has reached this number of viewers in the U.K., it’s likely that they are using the BARB data standards. It is used by broadcasters, advertisers, and agencies.
It will be difficult for the U.S. JIC to decide how wide it can expand beyond its initial group. This includes the buy and sell sides. You can see the YouTube Short I created about it below.
We’ve got you covered
It is time to overhaul the TV Advertising’s initial model:
- The conditions are right for seismic shift, even if it is slow, to the one-year commitment model.
- Executives at agencies expect that advertisers will spend less upfront money in 2023 than in 2022.
Learn more about the overhaul of TV upfront here.
The Atlanta Future office closes less than one year after being billed as the new hub for video production.
- Future’s Atlanta office was closed in December.
- New York City is home to some of the video production staff at the publisher.
Learn more about Future Atlanta’s office closing.
There is a market correction in esports salaries:
- Venture capitalists and advertisers are losing money on esports.
- Esports players can earn more than $40,000 per monthly.
Find out more information about the salaries of esports players here.
TikTok is mature, but TikTok still has room for experimentation.
- TikTok has attracted advertisers because of its expanded portfolio of ad products.
- It has expanded its targeting capabilities beyond demographic-based targeting.
Learn more about TikTok.
Albertsons Media Collective and Omnicom Media Group partner to target and measure CTV through The Trade Desk
- Agency holding companies will have the ability to target CTV ads purchased through demand-side platforms using first-party data from the grocery retailer.
- Albertsons customers will be able to see the performance of advertisements from advertisers.
You can read more about the Omnicom-Albionsons deal by clicking here.
We are reading
Netflix TV Chief:
The New Yorker published an extensive profile on Bela Bajaria, Netflix’s global head for television. She tries to make programming that has international appeal while being “premium” and “commercial at the same.
The TV-to-streaming-to-short-form turning point:
Although streaming seems unlikely to replace traditional television’s economics, particularly as production costs rise, virtual production may be able to help lower production costs. However, Doug Shapiro, a former WarnerMedia executive, said that short-form video could impact the perception of quality production.
Roku’s misinformation issue:
According to Media Matters, connected TV platforms can be misused to spread misinformation. Roku, which has a streaming service trading in QAnon content is an example of this.
Traditional TV shows top streaming viewership:
According to The New York Times, traditional TV programs like CBS’s NCIS and NBC’s The Blacklist rank high on streaming platforms because they have large episodes libraries.
Nielsen’s brand new measurement service
Nielsen will release the new version of its TV streaming-video ad measurement system — Nielsen One Ads — Jan. 11. However, the updated measurements won’t be used yet as currency for ad transactions according to Ad Age.