Sound systems manufacturer Sonos has abandoned its plans to create a new CTV hardware device, The Verge has reported, despite having spent months developing the product. The news has implications for demand-side platform The Trade Desk, whose in-development CTV operating system ‘Ventura’ had reportedly signed up Sonos as its first hardware client.
Rumours that Sonos was working on TV hardware first emerged years ago, and patent applications confirmed that a product was in development at the start of last year. Rumours followed that The Trade Desk was working on a CTV OS and that Sonos was signed up as a partner. And while The Trade Desk didn’t explicitly say this was the case when Ventura was announced, Sonos’ CEO (at the time) Patrick Spence was quoted in the press release, saying his company was “explor[ing] the integration of premium audio and video with The Trade Desk and the Ventura OS”.
However Sonos had a difficult year, sparked by a bungled overhaul of its mobile app, which led to Spence’s departure. Amid the turmoil, the company is focussing on its core audio products.
A hard(ware) sell?
While The Trade Desk’s decision to launch a smart TV OS takes the company into new territory, away from its core ad tech business, CEO Jeff Green says the two areas are closely linked. In his announcement of Ventura, Green spoke of a fragmented and inefficient supply chain in CTV advertising. By running a smart TV OS itself, The Trade Desk could reduce the number of hops in the supply chain, according to Green. This in turn would increase efficiency and ultimately deliver greater ROI for advertisers, allowing for lower ad loads and a better experience for CTV viewers.
Regardless of whether you agree with Green’s diagnosis of the CTV supply chain or not, there are inevitably sizeable challenges for The Trade Desk as it brings Ventura to market.
One of these is winning over hardware partners. As VideoWeek has previously reported, a number of the biggest hardware manufacturers run their own operating systems, and those which don’t are being courted by a number of third-party software companies vying for their business.
Ultimately, hardware manufacturers are looking for new revenue sources from the shift to CTV, as margins from selling TVs sets themselves fall. But The Trade Desk says it will strictly avoid selling any kind of ad inventory itself via the OS, whether that’s through its own FAST channel, or from home-screen ad placements. The company believes that this will avoid any conflicts of interest when it comes to promoting relevant content for users — but without these revenue streams, Ventura might struggle to offer favourable economics to hardware makers.
The Trade Desk’s bet on Ventura looks to be based on the idea that by offering a strong enough user experience, hardware manufacturers will want to use the OS as it will ultimately help them deliver more sales. With all the factors at play though, that may prove to be an uphill battle, and losing Sonos’s business before launch won’t help.
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