Walmart’s $2.3 billion acquisition of TV manufacturer VIZIO last year was a big signal of the retailer’s TV advertising ambitions. Walmart is already one of the biggest players in the US retail media space, but the VIZIO deal, which gives it ownership of VIZIO’s owned-and-operated smart TV operating system CastOS, strengthens Walmart’s access to valuable TV viewership data, as well as its ability to layer its own retail data into TV buys.
New data from tech research business Omdia suggests the acquisition will have a major impact on the North American smart TV OS market, and could give Walmart a dominant position in the landscape.
At present, Roku, Samsung’s Tizen, and Amazon’s FireTV are the three largest players, based on number of shipments of devices running those operating systems. Roku currently accounts for 31 percent of shipments, Tizen claims 22 percent, and FireTV sits at 14 percent, with CastOS just behind at 13 percent.
By 2029, however, Omdia projects that CastOS will leapfrog those three players, taking the largest share of the market in terms of shipments with 30 percent. Roku will be hit hardest, falling to 13 percent, while Tizen will slip to 20 percent. FireTV meanwhile is expected to gain share, up to 18 percent.
Omdia says the shift will come as a direct result of Walmart’s decision to move its in-house TV brand Onn. from Roku’s operating system to CastOS, a transition that will ramp up over the next year.
“Walmart’s decision to consolidate its TV platforms will give it a major asset that it can use not only to generate advertising revenue and sales growth, but also to compete more effectively with Amazon, which recently announced a collaboration with Roku to enable advertisers to launch campaigns across the combined installed base, via Amazon,” said Matthew Rubin, principal analyst, TV set research at Omdia. “Roku needs these kinds of partnerships, as it will inevitably lose shipment volume when it’s replaced as the pre-installed OS for Onn. TVs. However, this shift could prompt a reset in its international growth strategy.”
A strong bargaining chip
Walmart’s investment in the TV space adds a lot of value to its retail business.
The automatic content recognition (ACR) data it collects through CastOS TVs gives it insight to audience behaviour on TV sets, and can be used for measurement and attribution. It gets direct access to inventory it can sell on the home screen, VIZIO’s own set of free ad-supported streaming TV channels, and any ad space it gets access to via distribution partnerships with third-party streaming services. And it can use this access to spin up new shoppable ad formats, helping it create the type of closed-loop TV ad business which Amazon is building.
Of course, all of these propositions get stronger as CastOS get embedded in more and more homes across North America. And as a major seller of smart TVs, Walmart has a lot of power when it comes to getting CastOS TVs into US homes, as demonstrated by Omdia’s data. The retailer is incentivised to promote and discount TVs carrying its own OS, knowing its ad business will benefit in the long run.
This power also strengthens Walmart’s hand when it comes to negotiating distribution deals with other smart TV brands. As Walmart looks for ways to access data and run retail-powered campaigns across smart TV brands it doesn’t control, it’s bargaining from a position of power, since those companies would be very wary of losing access to Walmart’s stores.
A replicable model?
While Walmart may be building a dominant position in its home North American market, Omdia’s data suggests it will still be one of the smaller players on the global stage.
Android is expected to remain the leading platform between now and 2029, decreasing slightly from 42 percent of all shipments to 39 percent. Samsung’s Tizen will stay as the second largest player, falling slightly from 17 percent market share to 16 percent.
Omdia says its data shows that in the smart TV OS landscape, crowded though it is, there are still significant opportunities for expansion. The research group says that Europe-based retailers and platform providers will be watching developments in North America closely, and that we could see a similar retailer-led consolidation strategy in Europe in the coming years.
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