Apple TV, Roku and Android TV (in that order) will become the dominant operating systems for the TV.
What about the gaming consoles like Xbox and Playstation?
Although these gaming operating systems currently come with the big media apps like Netflix and HBO, the gaming consoles are built for gamers first. Gamers are the core users and revenues come from heavy gamers (whales) buying credits through the gaming consoles. The mindset of consumers is that their playstation is for games and their chromecast is for streaming youtube. This won’t change.
Also, the price point of gaming consoles will be greater than the price of pure streaming devices. This is because hardware on gaming consoles is built for intense graphics and dynamic game play. For example, the new Xbox and Playstation are both over $349. The Apple TV, Roku, Amazon Fire, etc. (media streaming devices) are all less than $100.
A gaming console will not win the TV operating system war. One of the streaming consoles will win.
The three winners will be Apple TV, Roku & Google (in that order).
Apple already has everyone’s credit cards and consumers are used to buying media (iTunes) through Apple. Also, Apple recently announced that you will be able to subscribe to HBO Now directly from Apple TV. They are also launching a more full fledged TV service in sept.
Roku will be a strong second player in the industry for two reasons. (1) They have a head-start in the space and have the strongest developer relations network and (2) their whole company rests on being relevant in the TV space so they won’t go away easy.
Google won’t completely miss on TV because there are a lot of ad dollars at stake (~80 Billion). They will also have a very systematic approach at gaining market share. First, Google will try to get all the TV manufacturers to run an Android like operating system. Not all TV companies will outsource their OS to Google like they did with mobile phones, but enough companies will. Then, Google will control the app store market by making it easy to port Android apps to the Android TV operating system. Lastly, they’ll make it lucrative for publishers to build on Android’s operating system by leveraging all the video advertiser relations they’ve already cultivated on Youtube.
Microsoft could be a big player here but they’ll likely try to position Xbox as their device. This will fail because of the gaming console logic mentioned above.
Conclusion: the platforms that will matter will be…
(1) Apple TV (40% market share)
(2) Roku (40% market share)
(3) Android (20% market share)
(Thanks to @frankdenbow for editing)
