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Samsung & LG Now Competing With Foxtel & Free To Air TV Networks

As free to air TV networks punt on Federal Government intervention to save their failing businesses a new enemy other than Foxtel Group has emerged with Samsung and LG quietly stripping revenue away from the networks as streaming becomes the new revenue generator.

The recent launch by the Foxtel Group of the Hubbl puck, was a game changer for the TV industry, not only did it bring together free to air TV programs into one easy to navigate system, it simplified the management of paid for streaming and free content into one $99 puck or a 55″ or 65″ Hubbl TV, with Foxtel Group now in a strong position to compete with the likes of Samsung and LG who are chasing the same advertising dollars the major broadcasters in Australia.

Their new puck is more about software management of content, which is today a big multibillion dollar business, which has seen LG and Samsung move to compete with Foxtel and free to air TV networks with their Tizen and Web operating systems customized to generate revenue for the two TV brands.

Developments in this space has also led to mass retailers in Australia now looking at wanting a share of trailing revenue generated from apps that are on devices such as TVs sold by CE retailers in Australia.

According to market tracker Omdia, the total revenue produced from advertisements related to online video streaming services globally is expected to grow to $288 billion by 2027, from $200 billion in 2023 — showing an average annual growth rate of 18.6 percent.

The bad news is that sales of TV sets are expected to decline by an annual average of 2.5 percent from $99 billion to $92 billion during the same period.

The biggest battle in this market is between Samsung with their Tizen OS and LG with their Web OS.

Both these South Korean Companies who are under pressure from Chinese TV manufacturers are now looking to strip billions from traditional media Companies via the sale of advertising on their TV’s and by taking a click of the revenue generated when an owner of a Samsung or LG TV signs up to a streaming app.

Hubbl TV

LG and Samsung control over 50% of the TV market and now they are trying to milk every dollar they can outside of actually selling the TV, with some observers claiming that in the future the TV industry could go in the same direction as the printer industry with the sale of cheap TV’s in an effort to get access to eyeballs in homes.

Currently these two Companies are pouring resources into content, not just hardware itself, to elevate profits, in Australia they have also cut deals with organisations such as Tempo in an effort to get their operating systems onto third party TV’s such as Bauhn that is sold at Aldi, as well as Akai, Sharp and Polaroid TV’s.

TV’s and Foxtel Group’s new Hubble are the new “billboards” for the streaming giants with Hollywood content Companies such as Amazon Prime, Disney and Paramount + as well as Netflix will to pay to get app customers signed up.

Netflix first started paying major TV manufacturers to include their shortcut buttons in 2015 others quickly followed.

To get benefits such as branding opportunities and convenient access points to their apps, runner-up services and platform rivals like Disney+ and YouTube jumped in to secure a spot-on remote-control device, opening up a new revenue stream for TV manufacturers.

“Every time a user clicks the shortcut button on the remote to access a streaming app the service operator pays for that access” claims industry executives.

Content and advertisements on smart TVs are likely to produce massive earnings for TV manufacturers with US retail giant Walmart recently moving to acquire their own TV brand with the acquisition of Vizio who own their own operating system.

Unlike the Hubbl puck Samsung and LG front pages have become cluttered and, in some cases, difficult to navigate.

Samsung, which celebrates the 10th anniversary of the launch of its Samsung TV Plus free streaming TV service, has seen its number of viewers increase over the past years. The service offers access to a total of about 2,500 streaming channels in 24 countries.

In Australia, the service offers 100 channels according to the Vice President of Samsung’s consumer division.

LG also has LG Channel, which provides access to 3,600 channels in about 28 countries.

“I believe we will be able to achieve sales at a (A$1.14 billion) level when we expand our digital ad business, concentrated in North America Australia and Europe, to India and Latin America,” Park Hyung-se, head of the LG Electronics home entertainment division in charge of TV, said at a CE press conference in January.

The global market for free ad-supported TV has been growing rapidly in recent years, witnessing a 20-fold increase in total market volume.

It was US$200 million in 2019 and US$4.4 billion in 2022, according to Omdia.

The market tracker predicted the market to grow to $12 billion by 2027.

The number of smart TVs across the globe is tallied at some 1.25 billion units, out of a total of 1.97 billion TVs. This means some 6 in 10 households use a smart TV globally.

It also revealed that the total revenue created from ads on smart TVs was $32.9 billion, or about 16.5 percent of the video ad revenue.

The revenue that LG and Samsung are generating is being stripped from free to air TV networks who in Australia, are now asking the Federal Government to rescue them, while also calling for the Government to prioritise their apps on Samsung and LG TV’s ahead of other paid for streaming apps.

“I believe the TV business is where we will see the biggest transformation. The sector was conventionally focused on the device itself, but (the profit portfolio) is now seen expanding toward software and platforms, and ads and content,” LG Electronics CEO Cho Joo-wan said at CES in January 2023.

“Our profit from ad content grew 10-fold in 2022 compared to 2018. Our TV products will become billboards for advertisers,” Cho added.



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