Apr 30

What Is CTV?

What is CTV?

Connected Television (CTV) refers to any TV that can connect to the internet and access a wide array of video and audio content beyond what traditional broadcast methods like cable or satellite offer. CTV allows viewers to stream shows, movies, and other digital content directly on their television screens, providing a rich and interactive viewing experience.

Main Components of Connected Television (CTV)

CTV is built around three core components that make up its functionality:

Screen: The traditional TV screen serves as the visual interface where content is displayed.

CTV Device: This device connects the screen to the internet. Examples include dedicated streaming devices like Roku, Amazon Fire Stick, and Apple TV, or gaming consoles such as Xbox and PlayStation. These devices come equipped with their own operating systems (OS) that facilitate the streaming capabilities.

Operating System (OS): The OS is integral to the CTV device, providing the necessary software framework to access, navigate, and manage internet-based content directly on the TV.

Simplified Setup with Smart TVs

In contrast to the traditional CTV setup, Smart TVs offer a more streamlined approach. They integrate the screen, CTV device, and operating system into a single unit with built-in internet capabilities. This all-in-one design eliminates the need for additional devices, allowing viewers to access online content directly through their Smart TVs.

How Popular is CTV and Smart TV?

Connected Television (CTV) continues to see substantial growth in popularity worldwide, driven by the increasing adoption of streaming services and internet-enabled TVs. Last year alone, over a billion people globally used at least one CTV device. In North America, nearly 80% of households own at least one Smart TV, which highlights the widespread adoption in these regions. Similarly, 74% of UK adults use Connected Television for entertainment, reflecting its strong presence in European markets as well.

Global Trends and Adoption Rates

In Latin America, the adoption rates for CTV are notably high, with Brazil and Mexico showing remarkable growth. From 2022 to 2023, Brazil saw a 94% growth in CTV penetration, closely followed by Mexico with 93% growth, significantly outpacing the United States, where the growth was around 81% during the same period.

CTV Device Ownership and Preferences

The popularity of CTV isn't uniform across all regions. For example, in Western Europe, about 55.2% of the population owns CTV devices, which is lower compared to 88% in the United States. However, the preference for CTV over traditional linear TV is strong, with expectations of significant growth in CTV device ownership across Europe in the coming years. The preference for streaming on smart TVs and through CTV platforms is reshaping viewing habits, with a notable shift towards internet-driven entertainment options.

What brands Win the CTV and Smart TV game?

In the competitive landscape of the global Smart TV market, Korean powerhouses Samsung and LG lead prominently, boasting market shares of 19.6% and 11.7%, respectively. This dominance extends to their respective operating systems, with Samsung's Tizen and LG's webOS leading the pack in the Smart TV OS domain.

The Smart TV OS scene diversifies with companies like Roku, Amazon’s Fire TV, and Google’s Android TV, each claiming about 6% of the CTV OS market. Google has broadened its reach by integrating Android TV into various devices (Chromecast dongles, some Philips models, Sony, Sharp, and others). Amazon has also expanded its footprint by embedding its software into Toshiba and Insignia TVs, alongside its own Fire TV sticks and set-top boxes.

The complexity of the market increases as some TV manufacturers opt for a hybrid approach in their operating system strategies. For instance, Hisense utilizes its own VIDAA OS alongside Android TV and Roku operating systems across different models. Similarly, Sharp employs a mix of Roku and Android TV OS, reflecting a trend towards versatile software integration in the sector.

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