The Trade Desk reportedly developing a Smart TV OS

According to a report from Lowpass, The Trade Desk, a major DSP, is developing its own smart TV operating system. This move, if confirmed, would position the company to directly compete with established tech giants like Roku, Google, and Amazon in the rapidly expanding connected TV market.

The report, published yesterday by Janko Roettgers, cites five sources with knowledge of the company's plans. The Trade Desk reportedly began work on the new operating system during the COVID-19 pandemic. The company has allegedly assembled a team of dozens, including former senior Roku employees, to work on this initiative. Some team members have concealed their employment with The Trade Desk on professional networking sites, highlighting the secretive nature of the project.

The significance of this reported move by The Trade Desk becomes clearer when viewed in the context of recent developments in the CTV advertising landscape. For instance, Titan OS, a European technology company, recently launched Titan Ads, a new marketplace for CTV advertising. This development underscores the growing importance of owning a smart TV operating system in the evolving digital advertising ecosystem.

The Trade Desk's reported entry into the smart TV operating system market comes at a time of intense competition and rapid growth in CTV advertising. The launch of platforms like Titan Ads demonstrates how control over a smart TV OS can provide unique advantages in the advertising space. Titan Ads, for example, leverages Titan OS (which powers smart TVs from Philips, AOC, and JVC across Europe) to offer advertisers access to exclusive first-party data and a unique pool of inventory.

Sources cited by Lowpass indicate that The Trade Desk has been actively pitching its smart TV OS to multiple hardware makers. The company is reportedly offering more favorable revenue-sharing agreements compared to its competitors. Furthermore, The Trade Desk is said to be providing hardware partners with greater flexibility in customizing the user interface of the OS, a departure from the more restrictive approaches of companies like Roku and Amazon.

At least one partner has reportedly signed on to use The Trade Desk's new operating system, according to the Lowpass report. Industry insiders suggest that the first device running this OS could launch as early as 2025.

Technical details of the operating system, as reported by Lowpass, reveal that it is based on Android AOSP (Android Open Source Project), similar to Amazon's existing Fire TV OS. This choice reportedly simplifies development and app porting processes but may present challenges in adoption. In the past, Google has taken issue with TV makers using forked versions of Android, which led to conflicts with Amazon and other manufacturers.

The Trade Desk's reported decision to enter the smart TV market is likely driven by multiple factors, including the potential benefits demonstrated by platforms like Titan Ads:

1. Access to exclusive first-party data: Owning a smart TV OS could provide The Trade Desk with valuable viewer data, similar to how Titan Ads leverages data from Titan OS users.
2. Unique advertising inventory: A proprietary OS could give The Trade Desk direct access to premium CTV inventory, potentially reaching millions of viewers through their smart TVs.
3. Advanced targeting capabilities: With first-party data from OS users, The Trade Desk could offer advertisers more precise targeting options, similar to Titan Ads' contextual targeting based on viewing data.
4. Integration with retail data: Titan Ads' partnerships with major European retailers for targeting based on purchase history highlight the potential for similar integrations in The Trade Desk's ecosystem.
5. Development of new ad formats: Owning an OS could allow The Trade Desk to innovate with new ad formats, such as the homepage ads and shoppable ads offered by Titan Ads.

While The Trade Desk has reportedly kept its smart TV OS project under wraps, the company has been vocal about the importance of connected TV advertising to its business model.

The reported development of a proprietary smart TV operating system represents a significant strategic move for The Trade Desk. However, the company would face numerous challenges in this highly competitive market:

1. Established competitors: Roku, Google, and Amazon have significant market share and brand recognition in the smart TV OS space.
2. Hardware partnerships: The Trade Desk would need to convince TV manufacturers to adopt its new OS over existing options.
3. Content ecosystem: Building a robust app and content ecosystem would be crucial for user adoption.
4. Technical hurdles: Potential conflicts with Google over the use of Android AOSP could impact hardware partnerships.
5. User experience: The Trade Desk would need to deliver a compelling and user-friendly interface to compete with established platforms.
6. Privacy concerns: As seen with Titan Ads' implementation of a consent management platform, addressing user privacy will be crucial in the current regulatory environment.

The Trade Desk's reported entry into the smart TV OS market underscores the growing importance of connected TV advertising and the intensifying competition for control over the smart TV ecosystem. As companies like Titan OS demonstrate the potential of combining a smart TV OS with advanced advertising capabilities, it becomes clear why a major player like The Trade Desk might seek to develop its own operating system.

This trend of advertising companies venturing into operating system development could be seen as a response to the increasing consolidation of power among a few tech giants. By creating their own smart TV OS, companies like The Trade Desk aim to secure direct access to valuable user data and advertising inventory, reducing their dependence on platforms controlled by larger competitors. However, this development also highlights the potential need for regulatory scrutiny to ensure a level playing field in the digital advertising market. As more companies seek to vertically integrate by combining advertising capabilities with operating system control, regulators may need to assess whether these moves promote healthy competition or further entrench existing market dominance.

Key facts

• The Trade Desk allegedly began developing its smart TV OS during the COVID-19 pandemic
• The OS is reportedly based on Android AOSP, similar to Amazon's Fire TV OS
• At least one hardware partner has reportedly signed on to use the new OS
• The first device running The Trade Desk's OS could potentially launch as early as 2025
• Video ads currently account for a "high-40's percentage share" of The Trade Desk's business
• The company reportedly faces competition from established players like Roku, Google, Amazon, and TV manufacturers licensing their own OSs
• The Trade Desk is allegedly offering more favorable revenue-sharing deals and greater UI customization options to potential hardware partners

It's important to note that as of the latest update, The Trade Desk has not officially confirmed these reports.