Build or buy? How smart TV OEMs choose an OS in a market that’s getting ever smarter

Man, woman and child watching TV together. All are smiling and eating popcorn, which the child is holding
(Image credit: TiVo)

With the global smart TV market expected to reach $353.3 billion by 2030, televised entertainment isn’t slowing down anytime soon. However, with this rising tide, we’re also seeing a shift in consumer expectations. Desired user experience is no longer determined by previous smart TVs – it’s set by mobile interfaces, video game platforms, and other digital experiences. What counts as 'smart' is getting ever smarter. 

Consumer habits aren’t solely driven by the user experience, either. Last year, streaming surpassed cable for the first time to capture nearly 38% of total TV viewership. Consumers want real-time access to higher quality content, and they want it personalised to them. As a result, smart TV operating systems (OS) are becoming the deciding factor when consumers choose which smart TV to buy. Details like screen size and resolution are taking the backseat in favor of OS features like interface responsiveness, voice command functionality, integration with other apps, and access to desired content. 

Consumer expectations can change overnight. With every new app, device, or digital platform that hits the market, the bar for interface and content accessibility gets higher and higher. For OEMs, this means the OS is now the heartbeat of any smart TV. The OEMs who can provide an OS that delivers diverse content on a superior interface – and even integrates across other household devices – will win the race.

The OS is redefining the entertainment experience – meaning OEMs must make a critical choice: do you build an OS, or do you buy one?

Building in-house gives OEMs the control, but at a price

At first glance, building a custom OS is an attractive option for smart TV OEMs. This model ensures OEMs retain control over two of their most precious commodities: the user experience for their customers and their brand identity. By building their own OS, OEMs can own their brand, content displays, and the way it is displayed to ensure it aligns with the experience their core customer base has come to expect.

However, in reality, challenges emerge. For numerous OEMs, adept at crafting innovative televisions rather than operating systems, building a custom OS can prove to be quite demanding. Developing an OS is resource-intensive, requiring tremendous costs, maintenance, and R&D time. Further tasks like content certification, device provisioning, support expenses, regulatory certification, and SoC ecosystem integrations take crucial time away from what OEMs do best – building, marketing, and selling world-leading smart TVs.

And should the OEM fail to deliver an OS that aligns with customer expectations, the repercussions can be severe. Negative feedback from consumer reviews and social media platforms has the potential to significantly impact sales and undermine any future brand initiatives.

OEMs can save money by relinquishing control to third parties

When faced with such high resource and financial costs, many OEMs turn to purchasing a third-party OS to use on their smart TVs. This model can save critical time and money, and guarantee a certain level of quality that may be unattainable when building an OS in house.

However, the ‘buy’ model can be plagued by a loss of control for the OEM, in both branding and user experience. Smart TV OS providers have sometimes prioritised their own brand over that of the OEM, meaning the OEM brand takes second place. This shift in branding causes consumer purchasing behavior to be dictated by the OS, not the smart TV.

Furthermore, it means that OEMs must put control of their brand into the hands of a third party. If the OS purchased has a sudden drop in quality, doesn’t have access to the right content, or has a clunky interface, the OEM's brand can suffer as a result. This friction is often demonstrated by the ‘walled garden approach’, where OS providers may promote their own content at the expense of their competitors – frustrating consumers and decreasing the quality of user experience. With consumer expectations at an all-time high, OEMs simply can’t take this reputational risk.

Smart TV manufacturers thus find themselves stuck at the crossroads of build or buy.

Man, woman and child watching TV together. All are smiling and eating popcorn, which the child is holding

(Image credit: TiVo)

TiVo is pioneering a third approach. For decades now, TiVo has been on the frontlines of innovation in televised entertainment, starting with its revolutionary digital video recorder (DVR) technology and now with new smart TVs Powered by TiVo for OEM partners.

TiVo takes an integrated approach in line with market demands, allowing OEMs to benefit from cutting-edge OS technology while still retaining control of what matters most – their brand and the consumer experience. OEMs promote their brand alongside the ‘Powered by TiVo’ branding, ensuring the OEM brand stays front and center. TiVo then takes on the resource-intensive tasks of content certification, device provisioning, regulatory alignment, and integrations so that OEMs can focus on innovating their smart TVs.

Crucially, TiVo keeps the consumer experience at the heart of its OS system. As a neutral smart TV OS platform, TiVo helps OEMs avoid the ‘walled garden’ pitfalls that may be found with other OS providers, and instead provides an intuitive user interface that can be personalised to meet customer preferences.

For far too long, OEMs have had to make a difficult decision when it comes to smart TV OS. TiVo has turned this challenge on its head by delivering a consumer-centric approach that delivers powerful UI and content experiences while allowing OEMs to retain brand identity.

In an ever-expanding and fiercely competitive market, consumers crave personalised, interconnected entertainment through cutting-edge smart TV technology. In the ongoing build-versus-buy deliberation, it's the integrated experience that seamlessly combines the advantages of both approaches that will emerge triumphant. This ensures OEMs can carve out their niche by delivering a genuinely innovative consumer experience.

Find out more at TiVo for Business