Google Could be Disrupter in Battle to Be Living Room Operating System

“Watch Google,” said a Friday streaming TV report from LightShed partners on the war for the living room among MVPDs, platform providers and media companies. Google could be a “much needed disrupter” in the connected TV world, reducing leverage Roku and Amazon currently hold, analysts said.

Amazon “has underwhelmed” with Fire TV as a TV operating system, and Apple doesn’t want to be a TV OS on third-party TVs, said analysts, leaving “all eyes” on Google to take on category leader Roku.

Unlike Roku, whose devices and platform were “purpose built for streaming video,” Google doesn’t need to make money, “at least today,” from connected TV ad inventory or sharing in new subscription VOD services, analysts said. Google’s interest is in gaining data on user behavior, capturing more of consumer’s time, boosting usage of its ad-supported YouTube app and growing its YouTube TV, Stadia and Nest Aware apps. Google didn't comment.

Though Google has “failed repeatedly in the TV space,” with platforms including Google TV, Google Fiber, Chromecast and Android TV, its lack of success in the TV ecosystem is “set to change radically” in the next six to 12 months, said LightShed, citing an updated Android TV user interface and a “reimagined” Chromecast. Google steered the perception of Android from “phone-centric” to a “more comprehensive brand” that ties its products and services together.

Analysts cited increased tension between platforms and programmers/apps that first became evident in January with a battle between Fox and Roku before the Super Bowl. Now, TurnerMedia’s HBO Max, which launched late May, doesn't have an agreement with Roku; NBCUniversal’s Peacock, rolling out broadly on Wednesday, reportedly doesn't have an agreement with Fire TV or Roku, either, they said. The companies didn’t comment Friday.

A looming question is whether consumers will switch streaming TV pIatforms to get those apps, said LightShed. In the past, carriage battles between broadcast and cable networks “were almost always won by programmers as distributors feared losing subs to competitors that they would never get back." Programmers’ losses from lost subscription fees and ad revenue were temporary, they said.

Content has been king “and consumers generally blamed who they paid, in this case the cable/satellite company versus the programmer, even if the programmers’ demands were outrageous,” they said. “Leverage was clearly with the programmer/content owner.”

So far, in battles between platforms/devices and programmers/apps, consumers are generally blaming the apps, analysts said, because they haven’t been educated about “who is to blame and the need to switch devices/TV OS platforms in order to get a specific app or content.” In the early streaming video days, consumers generally picked Roku over Apple TV because it had Netflix and Amazon Prime Video, they said.

There are “great rewards for the winner,” said analysts: “While linear multichannel television is rapidly declining, the TV is still the dominant in-home media device" in the U.S. and Western world. The “appification” of the TV means not only more video choice on the big screen, but it also could include a wide array of other applications. “If you control the TV OS platform, you can advantage your native apps relative to third-party competitors” and compare valuable data, they said: "You know everything that happens on your platform.”

That could extend more broadly in the home as it becomes more connected, they said, citing Amazon’s Ring and Alexa businesses, Google Nest and Apple HomeKit. Add voice control to the big screen environment “where search and discovery have always been challenging without a keyboard,” they said, and "you quickly realize just how important it is to be a winner in the TV OS battle.”