LG to accelerate foray into WebOS TV platform market

South Korea’s LG Electronics Inc., the world’s second-largest TV manufacturer, is aiming for a tenfold increase in the number of TV vendors to adopt its web-based software this year, as it is stepping up efforts to go beyond a home appliances brand.

In 2022, LG is trying to provide its web operating system (WebOS)-based TV platform to around 200 TV makers, including KMC, Walton, Seiki and Croma, which don't have their own WebOS, the company said on Sunday.

Last year, LG introduced its full-fledged webOS-based TV platform in a software package and provided the service to 20 TV vendors the same year.

“Our medium to long-term strategy is focused on transforming into a software company. We can’t survive by selling devices only,” a senior LG Electronics executive told The Korea Economic Daily.

The WebOS is available for a smart TV platform, on which a user connects to the internet and downloads on-demand content from apps, while accessing streaming services.

BENCHMARKING APPLE  FOR TV OPERATING SYSTEM MARKET

LG benchmarks Apple Inc. which has been evolving into a software platform by offering the mobile operating system iOS and the App Store, beyond a hardware brand for iPhone and iPad.

But unlike Apple and Google that focus on mobile operating systems, LG's OS business will pivot on TV softwares. Both Apple and Google control 90% of the mobile OS market in aggregate.

In 2014, LG introduced the first version of its WebOS, a year after it acquired the WebOS operating system technology from HP.

Last year, LG slightly raised its market share for the global smart TV operating system to 13.8% from 12.4% in 2020, according to market research firm Omdia. By contrast, Samsung Electronics’ Linux-based Tizen saw its market share decrease to 21.3% versus 24.3% during the same period.

Compared with one-time sales revenue from TV products, the WebOS software is expected to generate a steady stream of income from the sale and subscription of TV content and video streaming, as well as advertising on the platform.  

As a platform between app developers and consumers, LG will also earn fees from app providers and build a database on the app users.

LG is now recruiting experienced workers to bolster TV platform services.

“A company with competitive software technology will secure steady income streams, unaffected by logistics disruptions and other risks arising from the global economic environment,” said an industry official.

As inflationary pressure dented consumer demand for electronic gadgets, flagging TV sales and surging marketing costs took a toll on LG Electronics’ operating profit in the second quarter of this year.

“Going forward, TVs will serve as a 'personalized gadget' with a bigger screen than mobile phones,” said an LG Electronics official.

“We’ll make money from paid content and apps embedded into TVs.”

About 2,000 apps were downloadable on LG’s smart TVs last year, a 30% jump from 2019.

Among the apps available is Fitness Candy, jointly developed by LG and SM Entertainment Co., South Korea's top entertainment agency.

The subscription-based healthcare content will be provided from September. Last year, LG rolled out a subscription-based education app, Highbrow.

ADVERTISING INCOME

The TV platform is also expected to create synergy with LG Ads, formerly known as Alphonso Inc. The US-based TV data analysis startup has accumulated data on TV viewers from 15 million households.

Last year, LG acquired a 56.5% stake in Alphonso for $80 million, which has artificial intelligence-based video analytics capabilities.

The more TV manufacturers adopt LG’s WebOS-based TV platform, the more data LG will be able to build on TV viewers.

Based on the data, LG will produce advertising tailor-made for the viewer’s preferences of content and channels to create new revenue.

LG Electronics CEO Cho Joo-wan recently emphasized that LG needs to transform into a comprehensive solution platform beyond a home appliance brand.

Write to Ji-Eun Jeong and Shin-Young Park at jeong@hankyung.com
Yeonhee Kim edited this article