ValueTheMarkets News Commentary – In recent years the smart TV market has evolved from traditional digital TVs to more intelligent versions. Now there is a range to choose from with operating systems split between mainstream brands' own systems and open-source operating systems. This article discusses the opportunities this setup affords to a variety of companies including Sony Group Corp (NYSE: SONY), Microsoft (NASDAQ: MSFT), Roku (NASDAQ: ROKU), and QYOU Media (TSXV: QYOU) (OTCQB: QYOUF).
Companies providing hardware that forms part of the Connected TV (CTV) landscape include Sony Group Corp, Microsoft, and Roku. Meanwhile, open-source operating system (OS) providers like Coolita in India have companies like Panasonic, Croma Electronics and French consumer electronic brand Thomson using its OS. The rise of major hardware and open-source OS providers in the CTV space creates significant opportunities for small and medium-sized businesses in the media and entertainment sector. For starters, the widespread adoption of CTV platforms expands the potential audience for these businesses, making it easier to get their content in front of viewers who are increasingly cutting the cord with traditional TV.
QYOU Media (TSXV: QYOU) (OTCQB: QYOUF) is one such company that operates in India and the United States. Coolita recently partnered with QYOU India's QPlay+ to expand its Connected TV distribution via a global partnership.
As a part of this strategic alliance, Coolita users in India and across the globe, through their wide range of smart TV sets, including COOCA, METZ, Panasonic, Croma, Thomson and others, will have simple access to stream QYOU Media India's growing portfolio of FAST channels including The Q, The Q Kahaniyan, Q GameX, Sadhguru TV, and Bollywood Hungama Live on a free ad-supported basis.
Early on, Coolita recognized an opportunity for a cost-efficient, user-friendly, and flexible OS in a receptive market. Indeed, the Connected/Smart TV market is booming, with 90% of TVs sold in India last year being Smart TVs. Global ad revenues in this space also surged, hitting $25.9 billion and marking a 13.2% CAGR in 2023. This growth enhances the viewer experience by offering high-quality, localized content.
Sony Group Corp (NYSE: SONY), through its Home Entertainment and Sound division, produces LCD televisions, home audio, Blu-ray Disc players and portable audio devices. When it comes to hardware, Sony's TV range is top-class. An 8K TV is four times sharper than a 4K TV and 16 times sharper than a standard 1080p HDTV. This high resolution allows for incredibly detailed and lifelike images, giving viewers an immersive experience.
Typically, 8K TVs also incorporate advanced technologies like HDR, wider color gamuts, and faster refresh rates, elevating the overall picture quality. While 8K content is still limited, the TVs usually employ upscaling algorithms to enhance lower-resolution content. The Z9K from Sony stands as a premier 8K TV, epitomizing visual brilliance.
Additionally, Sony's 2023 Bravia XR TVs bring forth superior image processing. All Sony TVs from 2023 run Google TV, which offers user-friendly navigation and integrates seamlessly with services from Apple and Amazon.
Microsoft (NASDAQ: MSFT) aims to drive digital change using smart cloud and edge technology. Its goal is to help everyone and every business globally succeed. Microsoft's primary focus in the entertainment hardware space is its Xbox gaming console series. The Xbox consoles, while primarily designed for gaming, offer streaming capabilities and apps that allow users to access various streaming platforms, effectively turning them into a part of the Connected TV ecosystem. The Xbox serves as a multimedia device, allowing users to stream movies, TV shows, and other content in addition to playing games.
In its fiscal 2024, Q1 earnings report Microsoft reported better-than-expected subscriber growth in Xbox Game Pass as well as first-party content, primarily due to the launch of a game called Starfield. Xbox content and services revenue increased 13% and 12% in constant currency, while Xbox hardware revenue declined 7% and 8% in constant currency.
Roku (NASDAQ: ROKU) introduced streaming to TV. It connects users to their favorite content, helps content creators grow and profit from their audiences, and offers advertisers unique ways to reach consumers. Roku TVTM models, streaming players, and related audio devices are sold in various countries, either directly or through licensing with TV brands.
Roku's recent Video on Demand (VOD) Evolution study highlights Canadian TV streaming habits. Now, 75% of Canadian internet users choose TV streaming, making it the most favored TV source. Ad-supported TV streaming has seen a rapid rise, with 59% watching it in the past year, a significant increase from 42% the previous year. Additionally, 63% plan to watch ad-supported streams in the coming year.
This shift benefits advertisers, offering better targeting and flexibility. Ad engagement on streaming platforms is high, with many viewers responding by visiting brand websites or seeking more product information. This study shows that TV streaming presents unique opportunities for advertisers to effectively reach their audience.
The CTV landscape touches a multitude of companies, and Sony, Microsoft, Roku, and QYOU Media are just a few of them. Curt Marvis, CEO of QYOU Media continues to view the CTV space as a strong area for growth in India and beyond in the years ahead. He notes "the partnership with Coolita allows QYOU to further strengthen its digital presence on connected TVs in India while also offering unique curated channels to a global audience."
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