Roku CEO to smart TV OS competitors: Keep losing share or switch to licensed

Roku CEO Anthony Wood anticipates the smart TV market will eventually shake out to a handful of players controlling the platforms.

During a Morgan Stanley investor conference today, he said Roku is generating a lot of operating expense from R&D to drive more monetization for its smart TV platform and its manufacturer brand partners. He then warned that same formula is difficult to replicate for a single TV company building their own smart TV platform.

“I think it’s inevitable that there’s going to be consolidation around a very small number. I predict three licensed TV brands. Roku will remain the number one brand and if you’re Samsung, LG or Vizio, you have two choices: you can keep losing market share, which is what’s happening, or you can switch to a licensed operating system. I don’t know what path they’re going to take but that’s what’s going to happen,” he said.

The global connected TV market reached 1.28 billion total devices in 2020, according to research released last year by Strategy Analytics. At the time, Samsung’s Tizen OS accounted for 162.3 million devices installed worldwide, or 12.7%, followed by LG’s webOS with 7.3%, Amazon Fire OS with 6.4%, Roku TV OS with 6.4% and Android TV with 5.9%.

While Roku has been slowly expanding its international business, the company has held onto the lead in the U.S. for smart TV OS market share. Earlier this year the company added Sharp to its list of licensing partners that includes TCL, Hisense, Sanyo and Philips.

Roku is currently tied to rumored plans for building its own smart TVs. According to Business Insider, Roku earlier convened a focus group to get consumer feedback on different models, feature sets, names, sizes and price points. But Wood’s comments today seemingly throw cold water on any potential plans for Roku to make its own TVs.