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In recent years the prices of electronic components have risen significantly, yet the cost of buying new TVs has not increased as much as was expected. According to analysts at Omdia, manufacturers have found a new way to boost their revenues. Ads shown on smart TV platforms and usage data about how viewers use their TVs are becoming increasingly important. This allows companies to sell hardware at lower margins and generate profits for many years after the device is purchased. This business model is growing particularly rapidly in the U.S. market. Experts predict that similar solutions will become increasingly common in Europe as well.
Ads are becoming a more important source of revenue than TV sales
An Omdia report shows that TV makers' business model is clearly changing. A few years ago the main source of revenue was selling the device itself. Now ads shown on the home screens of Smart TV platforms and sponsored content recommendations play an increasingly large role. Manufacturers also earn money by analyzing how people use their TVs and by studying user preferences. This data lets them better target ads, which increases their value to advertisers. With the extra revenue, 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 6% compared with the same period a year earlier. 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 over the device's lifetime.
Europe is following the United States, but users still have a choice
The most developed advertising model currently operates in the United States. Platforms such as Roku and Amazon Fire TV have for years funded part of their operations through ads and analysis of user data. Another good example is Walmart, which acquired the Vizio brand to combine data from TVs with customers' in-store purchase information. According to Omdia, the same trend will become increasingly visible in Europe. New Smart TV platforms such as Vidaa, Titan OS and TiVo OS are growing rapidly and rely heavily on ads and online services. Analysts predict that by 2030 their market share will increase significantly. However, this does not mean users are completely without choice. People who don't want to see ads or share data about their habits can simply choose not to connect their TV to the internet. In that case the Smart TV functions like a traditional TV, and all multimedia features can be handled with an external player such as Apple TV, Chromecast or a console. This solution allows users to avoid both ads and data collection by the TV manufacturer.
TV manufacturers increasingly earn money 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. The trend that has dominated the U.S. for years is gradually spreading to Europe as well, although users can still limit ads and protect their privacy by opting not to connect their TV to the internet.
source: flatpanelshd
