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May 1, 2013
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Even Samsung will eventually succumb to the logic of a universal Smart TV OS

The media consulting firm Decipher has reiterated its view that the Smart TV market will eventually see consolidation, most likely around what it calls universal Operating Systems like Android for TV (currently seen as a proof-of-concept in the form of Google TV), Apple iOS or Microsoft Windows TV (seen in the form of Xbox today).

Lloyd Mason, Business & Strategy Analyst at Decipher, says: “We expect something similar to happen in TV as what happened with tablets, where there is apps standardization around Apple, Android and Windows 8. That is where we think Apple will play a role. Rather than Samsung having their own proprietary OS to encourage app builders to build a bespoke version of an app, developers will build an app for Apple TV or Windows TV or Android for TV.”

Speaking at one of the iBurbia Studio sessions that Decipher runs, where it shares its understanding about developments in UK television, Mason predicted that managing a proprietary Smart TV environment “does not quite fit the picture in the long-term”, even for a market leader like Samsung. “In terms of the product development roadmap, it [maintaining your own apps environment] is a difficult case to make, so we expect Apple to come into play as we move forwards.”

Decipher has pointed towards a role for the universal OS (or what we have been calling a super-OS) previously and Redshift Consulting is another analyst company that expects Apple iOS, Android or Windows 8 to provide the basis for multi-brand apps environments. (See previous story).

One obvious stumbling block is that a company like Samsung or LG would have to give up some or all of their control of the apps environment, which could end their chances of taking apps-based revenue (like for carrying apps on the platform) or building an advertising business (like using interactive banners within the entertainment portal). For this reason Decipher thinks the biggest Smart TV makers like Samsung will fight for their proprietary environments and continue to ‘go it alone’ in the medium-term, but ultimately sacrifice them.

Mason thinks that Microsoft would be more open to sharing some of the revenue you can hope for as the apps platform enabler with the CE hardware vendor, although this attitude is unlikely to stretch to advertising.

He explained that if there was a universal OS across different brands, then a company like Netflix would not have to build a proprietary version of its app for Sony and then repeat the process for other Smart TV portals, but could build one Android app that could be used across all televisions that run Google TV (or Android on TV).

“That is what we anticipate happening, although manufacturers are not taking the Google bait yet because they [the manufacturers] see themselves as the key people when it comes to running the consumer experience. But we think that long-term, and at least for the second tier manufacturers, they will have to drift towards one of these universal OS providers.”

Mason thinks that if leading Pay TV operators started to favour working within a few OS environments like Google, Apple and Microsoft then this would force TV manufacturers to make the move out of their proprietary systems.

Apple already provides a streaming box called Apple TV, of course, and Decipher expects that this year the CE giant will announce an app store proposition for the television screen, as it has done already for Mac OS on its computers. This could open the door to a wider range of content, including Pay TV operator apps.

Like others, Decipher thinks the fragmentation across the CE Connected TV marketplace is holding back its potential. Mason pointed out that a headline figure of something near 6.5 million installed Smart TVs in the UK may seem impressive (and Decipher’s Mediabug consumer tracking survey suggests that 86% of Smart TVs are now being connected) but this can be broken down to maybe 100,000 homes using a single version of an app.

As Mason points out, you have to split that headline figure between, say, seven manufacturers using their own development silos and then different apps requirements for the different year models released by each manufacturer, in some cases going back five years now. So the maths is 7×5 different apps development efforts. Decipher seems to think that 35 is about 32 too many.

The media consulting firm is well aware of the efforts to rationalize apps development with shared SDKs, as seen with the Smart TV Alliance, and the growing support  for HTML5 development, but views the ‘universal OS’ as the best bet for long-term consolidation in this environment.