Many people have a television at home. But as manufacturers sell fewer devices, they are now looking for other ways to make money. For viewers and gamers, this means more advertising.
For good televisions, you typically have to spend a lot of money to have such a device placed in your home. However, the sale of a TV has not been the sole goal of manufacturers for a long time.
Companies like LG, Samsung, and Sony have long been focusing on other monetization options. And this is expected to increase rather than decrease in the future.
Advertising is more important for revenue than pure hardware sales
What are the manufacturers doing? For a few years now, it has not just been about the pure sales figures of televisions. Because companies have realized that viewers are far more valuable for revenues.
In recent years, TV manufacturers with TV operating systems have started to show viewers advertisements and analyze their reactions. From this, it has been found: It is much more worthwhile to monetize the viewers rather than the devices.
Brands like LG, Samsung, Roku, and Vizio are increasingly interested, if not primarily focused, on generating recurring revenues from already sold televisions through advertising sales and tracking. To look at some concrete numbers (via arstechnica.com):
- GroupM, the world’s largest media investment company, reported that revenue from smart TV advertising has increased by 20 percent from 2023 to 2024 and is expected to rise by another 20 percent next year to 46 billion US dollars.
- In September 2023, Patrick Horner, head of consumer electronics at the analyst firm Omdia, stated that “every new user of a connected TV platform generates about 5 US dollars per quarter in data and ad revenue.”
A large part of the revenue from TV operating systems comes from the sale of advertising on the home screen and screensaver of the operating system. In addition, there are free streaming TV channels that also display ads.
In the future, more targeted advertising is expected
If anyone believes that we have already reached the maximum possible amount of advertising, they are mistaken. Because companies like Samsung and LG are already focusing on new collaborations to place even more targeted advertisements, according to Arstechnica.com:
- For instance, LG has started sharing data collected from its televisions with Nielsen.
- Samsung is now tracking whether viewers watch more ads on their own televisions through streaming services or through linear television.
- Other companies are also relying on partnerships with analysis firms to evaluate and monetize data.
Furthermore, especially low-cost TV devices are increasingly being financed through advertising. The company Roku leverages video advertising that is integrated into the SmartTV software on its own devices.
The word “Smart” in relation to televisions takes on a new meaning: It’s no longer just about being able to install apps on your television or having internet access, but in the end, about how well your television understands you and knows how to utilize that – in whatever way possible.
More about televisions: After all, there are not “only” cheap televisions: Because with the “Home Cinema Display” series, LG has introduced a line of TVs that can also be purchased in screen size if you find a projector too small. However, not only the price of 1.7 million US dollars is likely to deter many users from making a purchase: LG announces giant television with 325 inches – costs 1.4 million euros
