The Trade Desk’s New Move: Challenging Streaming Giants with Ventura OS
The streaming industry is rapidly evolving, with many consumers opting for separate subscriptions rather than traditional bundles. Companies are increasingly utilizing “connected TV” advertising to finance their content, and major players like Netflix have recently introduced ad-supported subscription tiers.
This shift in the market heightens the significance of firms that assist creators in optimizing advertising revenue to fuel this competitive landscape.
This is where The Trade Desk (NASDAQ: TTD) has seen considerable success. As the leading independent demand-side programmatic advertising platform, it enables advertisers to place ads effectively across the internet.
Recently, The Trade Desk made a bold move that could further shake up the industry.
Introducing Ventura: A New Streaming Operating System
On November 20, The Trade Desk launched its new streaming operating system, Ventura, named after the county that hosts its headquarters.
This development positions The Trade Desk in direct competition with streaming OS provider Roku (NASDAQ: ROKU) and other major tech companies, including Amazon.
The Trade Desk asserts that Ventura represents a “major advance” in streaming OS technology, with promises of several enhancements. The user experience is described as more intuitive and engaging, aimed at simplifying content discovery across various platforms.
Moreover, The Trade Desk claims that Ventura will create a “cleaner” ad supply chain, reducing the number of intermediaries between advertisers and publishers—each of whom typically takes a fee. Streamlining this system could lead to greater precision in advertising, aided by new technologies such as OpenPath and Unified ID 2.0 (UID2), which focus on privacy-aware ad targeting.
Understanding The Trade Desk’s Strategic Shift
Historically, The Trade Desk has operated solely as a demand-side platform, primarily servicing advertisers and agencies. CEO Jeff Greene has been critical of ad tech companies that play both sides of the market, labeling them as “walled gardens” lacking transparency.
Initially, venturing into operating systems might seem contradictory to its established identity. However, Greene has indicated that The Trade Desk has been developing Ventura for three years, suggesting a strategic rationale behind the move.
The popularity of Ventura may stem from a desire to capture revenue typically allocated to platforms like Roku. Yet, it could also reflect The Trade Desk’s vision for a more efficient connected TV industry. Greene underscored that the company’s primary focus remains on serving demand-side customers and advertisers.
Ventura’s technologies like UID 2.0 might enable better tracking and insights, thus enhancing ad targeting for marketers. Greene also pointed out that Ventura would be distinct from other OS offerings, as it will not feature its own streaming content. He expressed concerns over streaming OS companies becoming too powerful, arguing that reliance on their content could misdirect advertising opportunities.
Furthermore, Greene criticized other ad tech players for high service fees, signaling that Ventura could eliminate some of these middlemen, ultimately lowering costs for everyone involved.
Is Ventura a Game Changer for Roku?
Ventura’s business model closely resembles that of Roku. While Roku operates its own Roku Channel, it lacks the extensive library of original content offered by larger companies like Amazon. This positioning means Roku has more flexibility with third-party streaming devices.
As The Trade Desk aims to partner exclusively with third-party hardware manufacturers and avoid launching its own streaming devices, competition with Roku will likely intensify. The Trade Desk’s focus on demand-side services and potential to offer lower advertising rates could put pressure on Roku’s revenue streams and partnerships with smart TV makers.
Greene has indicated that The Trade Desk does not need to profit from its operating system, suggesting that enhancing the connected TV experience could benefit both consumers and advertisers.
This situation creates challenges for Roku and its investors. While The Trade Desk risks straying from its traditional approach, if Ventura can indeed improve experiences for both advertisers and customers, it stands to gain significant advantages. A successful disruption of big tech’s dominance could reshape the ecosystem in a positive way—albeit for everyone except Roku.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Billy Duberstein and/or his clients have positions in Amazon, Apple, Netflix, and The Trade Desk. The Motley Fool has positions in and recommends Amazon, Apple, Netflix, Roku, and The Trade Desk. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
