By Karsten Weide, Principal And Chief Analyst
The Trade Desk, the leading independent demand-side platform (DSP), is reportedly developing its own streaming TV operating system (OS), according to the blog site Lowpass. (Treat this as a “rumor” for now; Lowpass claims to have obtained this information from several different sources and provided a lot of detail, but no other publication has yet confirmed it.)
This new venture aims to compete with established players like Roku, Amazon’s Fire TV, and Google TV by providing an alternative OS for smart TVs and connected devices. The project, which began during the COVID-19 pandemic, has been kept largely under wraps until recent reports brought it to light.
On balance, could a potential The Trade Desk TV OS find distribution? It could. Could it find enough distribution to make a material difference for the company? That’s more doubtful.
What is The Trade Desk About to Do?
The Trade Desk is set to launch its own smart TV operating system based on the Android Open Source Project (AOSP), the same foundation that powers Amazon’s Fire TV OS. This move will enable The Trade Desk to gain direct control over the streaming TV experience, creating more opportunities for its connected TV (CTV) advertising business, which already accounts for almost half of its revenue and continues to grow. By developing its own OS, The Trade Desk aims to attract smart TV manufacturers with more favorable revenue-sharing deals and greater customization options than existing platforms offer.
Does The Trade Desk Have the Expertise and Talent to Develop a TV OS?
Does The Trade Desk have the expertise and talent to develop a TV OS? After all, it is strictly an AdTech business, and many tech companies have failed in their attempts to work in or with the hardware segment.
However, the project is reportedly led by a team that includes former senior Roku employees, suggesting that The Trade Desk has brought in industry veterans with significant experience in building and scaling smart TV platforms. Moreover, with dozens of people working on the project, The Trade Desk has shown a strong commitment to developing this new product. Leveraging its existing experience in digital advertising, particularly in CTV, the company may understand the nuances of both the technical and business aspects of developing a competitive smart TV OS.
What Are the Chances That The Trade Desk Will Find Partners Willing to Use Its TV OS?
The Trade Desk has already begun pitching its smart TV OS to multiple hardware makers, offering more advantageous revenue-sharing deals and greater flexibility in customizing the user interface than established competitors like Roku and Amazon typically provide. According to reports, at least one partner has already signed on, and the first devices running The Trade Desk’s OS could launch as early as next year.
However, gaining widespread adoption will not be easy. The market for smart TV operating systems is crowded, with established players like Roku, Google, and Amazon, and emerging competitors such as Hisense (VIDAA), Samsung (Tizen OS), LG (webOS), Vizio (SmartCast), and others like Xumo and Titan OS. Additionally, The Trade Desk may also face resistance from Google, which has historically opposed TV makers using forked versions of Android.
Potential partners may have doubts about the company’s long-term commitment to the smart TV market should The Trade Desk’s initiative to develop its own TV OS fall flat. The success of such a venture heavily depends on building trust and demonstrating sustained commitment, especially in a market dominated by established players like Roku, Amazon, and Google.
On balance, could a potential The Trade Desk TV OS find distribution? It could. Could it find enough distribution to make a material difference for the company? That’s more doubtful.
Why Would Manufacturers Choose The Trade Desk’s OS Over Other Operating Systems?
Manufacturers may be inclined to choose The Trade Desk’s OS if they are looking for more control over their devices and better revenue-sharing terms. Current market leaders like Roku and Amazon often demand significant control over the ad inventory sold on their platforms, which can limit the revenue opportunities for device makers. The Trade Desk is positioning its OS as a more manufacturer-friendly alternative, offering better revenue shares and the freedom to customize the interface, which could appeal to device makers who want more control over their products and a larger share of advertising revenue.
Additionally, The Trade Desk’s experience and leadership in the digital advertising space might offer a competitive edge by providing a more sophisticated and nuanced advertising platform, potentially leading to higher revenues for all parties involved.
If The Trade Desk’s OS Finds Distribution, What Difference Would It Make for the Company?
If The Trade Desk’s TV OS gains significant distribution, it could dramatically enhance the company’s position in the digital advertising market, particularly in the lucrative CTV segment.
Most importantly, it would make the Trade Desk less dependent on other platforms. The company would be less prone to being disintermediated. This is of crucial importance given the size of the video and CTV business for The Trade Desk.
By controlling the operating system, The Trade Desk would gain access to a broader array of consumer data, enabling it to offer more precise targeting capabilities and potentially more attractive ad placements. This level of control could lead to an increased share of the growing CTV ad market, which has become a significant portion of its revenue base.
Moreover, a successful OS would also allow The Trade Desk to directly influence the development and deployment of new features, such as advanced audience targeting and ad formats, further distinguishing its platform from competitors. This could attract more advertisers and partners to The Trade Desk’s ecosystem, creating a virtuous cycle of growth and innovation.
Conclusion
The Trade Desk’s venture into developing its own TV OS is a bold strategic move that could reshape the competitive landscape of the smart TV market. With the right partnerships and continued focus on innovation, The Trade Desk has the potential to significantly expand its footprint in connected TV advertising. However, its success will depend on its ability to navigate a crowded market, secure key partnerships, and offer unique advantages that appeal to both manufacturers and advertisers. If successful, this could mark a transformative period for The Trade Desk, further cementing its position as a leader in the advertising technology space.
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