My newest monthly opinion piece is up for The Information. In “Can Netflix Win the Contest for Connected TV Ad Dollars?” I wrote about one little discussed risk for Netflix’s ambitious vision for its ad-supported business: its relationships with Smart TV manufacturers.

As Netflix told investors in its Q1 shareholder letter, “Netflix’s growth depends on the uptake of connected TVs.” Its ad model will inevitably evolve that relationship, turning it into a head-to-head competition with the entire connected TV universe for ad dollars.

The emergence of Connected TV device manufacturers (or, original equipment manufacturers (OEMs)) as power players in streaming has been playing out in the background for a while now. 

Part of the power is pure scale - Nielsen estimates the total number of TV households in 2022 is 122.4MM, and device makers like Roku and Amazon may have as many as 50MM connected TV devices, each, in U.S. households. [1] 

But no one streaming application will ever have a holistic view of what consumers want unless it is owned by a Smart TV operating system. Each streaming service is “actually a walled content garden, blocking out or strictly limiting access to competitors’ content”, as IAB Executive Chairman Randall Rothenberg recently argued in a Twitter thread. That means publishers with limited libraries will never understand the consumer preferences of audiences beyond the walls of their service. The data publishers intend to sell to advertisers will also suffer from the same limitations.