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In recent years the prices of electronic components have risen sharply, yet the cost of buying new televisions has not changed as significantly as expected. According to analysts at Omdia, manufacturers have found a new way to boost their revenues. Advertisements shown on Smart TV platforms and the usage data collected about how the television is used are becoming increasingly important. This allows companies to sell hardware at a lower margin and continue to reap profits for many years after the device has been purchased. This business model is developing particularly rapidly in the US market. Experts predict, however, that similar solutions will increasingly be seen in Europe as well.
Advertising is becoming a more important source of revenue than TV sales
An Omdia report shows that TV manufacturers' business models are clearly changing. A few years ago the main source of income was the sale of the device itself. Today, ads shown on the home screens of Smart TVs and sponsored content recommendations play an increasingly important role. Manufacturers also earn money by analysing usage patterns and user preferences. This data allows ads to be better targeted, increasing their value to advertisers. Thanks to these additional revenues, companies can keep TV prices competitive despite rising memory and other component costs. According to data for the first quarter of 2026, TV sales rose by 6% compared with the same period the previous year. Analysts say this was driven in part by stable prices and the upcoming FIFA World Cup. Even premium TVs use the same operating systems as cheaper models, so they also display ads and can collect user data. For manufacturers, this means a steady revenue stream throughout the device's lifetime.
Europe follows the US lead, but users still have a choice
The most advanced advertising model is currently found in the United States. Platforms such as Roku and Amazon Fire TV have for years funded part of their operations through advertising and by analysing user data. A good example is Walmart, which acquired Vizio to combine TV data with information on customers' purchases in its stores. According to Omdia, the same trend will become increasingly apparent in Europe. New Smart TV platforms such as Vidaa, Titan OS and TiVo OS are developing rapidly and rely heavily on advertising and online services. Analysts predict that by 2030 their market share will increase significantly. However, this does not mean users have no choice at all. People who do not want to watch ads or share data about their viewing habits can simply avoid connecting their TV to the internet. In that case, the Smart TV acts like a conventional TV, and all multimedia functions can be handled by an external device, such as an Apple TV, Chromecast or a games console. This approach avoids both ads and data collection by the TV manufacturer.
TV manufacturers increasingly earn not from selling hardware but from advertising and services available on Smart TV platforms. As a result, device prices remain attractive despite rising production costs. A trend that has dominated the US for years is gradually spreading to Europe as well, although users can still limit ads and protect their privacy by choosing not to connect their TV to the internet.
source: flatpanelshd
