10 March 2022
By Tommy Flanagan
Roku’s recent riches have clearly gone to the heads of leadership, which have forgotten about the bigger picture of international competition and the importance of partners.
In a refreshing but ill-thought message to the smart TV community, Roku CEO Anthony Wood warned his key rivals – Samsung, LG and Vizio – to either keep hemorrhaging smart TV operating system market share, or relent to licensing an OS like Roku’s instead.
We can picture it now – executives at the three consumer electronics giants all keeled over laughing in their respective boardrooms, fighting for breath at the very thought of these empty threats from Roku.
Wood’s argument is that Samsung, LG and Vizio face an inevitable future around the consolidation of a small number of licensed TV brands, claiming that all three are losing market share to Roku. That is certainly true in the US market, where Roku leads the pack, but its international business is a very different story, and with Roku’s (rumored) ambitions to branch into making its own smart TVs, Wood should choose his words carefully.
If these long-lingering rumors about Roku-made smart TVs come to fruition, would existing smart TV licensors of the Roku OS like Philips, Hisense, TCL, and Sanyo take kindly to Roku competing more directly with them in the smart TV panels market? We doubt it, so expanding the hardware empire could shoot the OS business in the foot.
The other interpretation is that Wood’s words of warning are a mark of how seriously it is taking the OS licensing business, and therefore could be a clue that Roku does not want to pursue its own line of smart TVs after all.
We must remember that all four smart TV operating systems mentioned here – Samsung’s Tizen OS, LG’s webOS, Vizio’s SmartCast OS, and Roku’s proprietary OS – are all Linux-based. This is important because software development atop the Linux kernel is labor-intensive by modern day coding standards and requires some increasingly niche programming languages.
It therefore makes sense that Linux has only found success among OEMs, but also begs the question of how long before a disruptive alternative for the smart TV OS arises? Or whether the consolidation of these Linux-based smart TV operating systems is necessary to fend off the incursion of Android?
Something of the ilk of Huawei’s HarmonyOS, for instance, which is essentially a reskinned version of AOSP, although Huawei would have you believe it is totally different – and will never be a success story outside of China anyway.
Allow some numbers from our forecasting arm, Rethink TV, to do some talking. On a strictly North American basis, recent research partly supports Wood’s prediction that the likes of Samsung and LG must license Roku to survive in smart TVs. With Roku and Android TV hoarding nearly two thirds of the North American smart TV and connected TV device OS market by 2026, there is little room for others to thrive.
Although Roku holds its ground, fellow Linux OSs do not fare so well. Samsung’s Tizen declines from 20% in 2020 to 15% in 2026, while LG’s webOS falls from 9% to 7% across the period, according to Rethink TV.
Just as the rise of HarmonyOS is very much an APAC phenomenon, North America’s smart TV and connected TV device OS market is unique in the domination of Roku. Roku begins 2020 at 32% market share in North America, peaking at 35% in 2024, before settling back down to 32% by 2026.
Roku’s decline from 2024 can be explained by the expected rampant rise of Android TV, which grows from 10% market share in North America to over 31% by our period’s end. In fact, Android TV is hot on Roku’s heels by 2026, with a turning of the tables near-inevitable in 2027. However, other Android offerings, namely AOSP-based OSs and Chromecast, decline throughout the period, reaching 2% and 3% in 2026, respectively.
Internationally, the latest OS report shows that Roku’s market share in smart TVs and connected TV devices globally is actually projected to fall from 5% in 2020, to 3% in 2026. This is placed in the global context against Android-based devices (including Android TV, Chromecast, and AOSP), as well as the Linux-based OS crop, and – significantly – Harmony OS, which is projected to storm to almost 40% share of devices thanks to its dominance in China.
Taking all this into account, we can see how inherently US-centric Wood’s comments come across.
Once hysterics have subsided within the boardrooms of Samsung, LG, and Vizio, the OEM trio might do well to remember what happened to Comcast when it stood in Roku’s way back in 2020. Cute little Roku isn’t so little anymore, with the leverage to even get the mighty NBCUniversal to roll over to agree to what it initially considered a completely unreasonable advertising revenue split (30% Roku, 70% Peacock).
As the numbers show, nothing is quite as frightening for technology and media executives as being banished from the Roku ecosystem – and Roku knows it.
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