How White Label Vendors Like Foxxum Plan To Shake Up TV's OS Wars
“We have always positioned ourselves as an independent player in the connected TV space, as we've always believed that there is a need for an independent player for all these TV manufacturers” explains Ronny Lutzi, CEO of Foxxum, a leading developer of white label apps and operating systems for the television industry. “And I am talking about 500 international TV manufacturers that are looking for their own operating system.” Lutzi sat down with Alan Wolk to discuss the state of the TV OS market and why he was feeling good about ZEASN’s acquisition of Foxxum.
Alan Wolk (AW): Foxxum is now a part of ZEASN. Can you tell me a little bit about what led to that deal and what we can expect as a result?
Ronny Lutzi (RL): Over the past 10 years, we had a competitor, ZEASN, that was playing in the same field, so to speak, and we decided that rather than fighting for market share against each other, we would team up with ZEASN and conquer all the other operating systems together.
We have a very good position in the market too. If you look at the world of operating systems, you either have huge media companies or operating systems that are connected to the device manufacturer. The problem is that all of those device manufacturers are then the biggest competitors for all these smaller TV manufacturers they're trying to sell to.
At the same time, big companies like Roku, Google, and Amazon have their own agenda for the living rooms. So a TV manufacturer might feel like they are only the skateboard that brings these tech giants into the living room, rather than having any sort of long-term participation in the platform.
With our new product, Whale OS.4, we are at least a few dollars cheaper than comparable products, which is a big plus for TV manufacturers as their margins are already low. We are not their competition on the hardware front either. Finally, we have implemented a long-term revenue-sharing model for all those TV OEMs, which is key, because there is not a lot of money to be made from hardware, so this allows them to create an alternative revenue stream.
AW: What sets Foxxum’s Whale 4.0 OS and rlaxx TV apart from a consumer standpoint? Why are they good products for the end user?
RL: We have a great UI and UX and we have apps for all of the top streaming services. We also have a new search functionality which uses a large language model or LLM. It allows you to talk to your TV in a conversational manner, like you were talking to a friend. So rather than trying to remember the name of a movie, you can now ask your TV, “Hey, what was that movie where you have those jet fighter fights and “Danger Zone" is the main theme song?” And it will come back and say, “That could be either Top Gun or Maverick.” I find that to be fascinating in general, but it also makes the ease of discoverability on our platform a real plus.
AW: As a white label service, what is Foxxum’s pitch to someone who is thinking about going with Google, Amazon or one of the big tech players?
RL: If you look at the strategy Google and Amazon use, they're always using the same playbook— they offer something for free and open source, then they get a huge number of users to adopt it, and then they start coming up with new rules. First, it was AOSP, then they moved it to Android TV, and they made sure that you cannot use AOSP because it does not support essential functionalities that you need, for example, to have Netflix.
By setting up rules, they make the playground smaller and smaller. The end game is that once they put the brand into the market, they start deploying their own devices. You can see that with Google and the Pixel phone, Roku launching its own line of Roku TVs, Amazon too.
So if you are a local manufacturer, and you’ve spent years building your brand at a retail level, and suddenly there is a TV from a big tech brand, running the identical operating system right there on the shelf next to you—how do you differentiate? Especially since those big tech companies can just subsidize the hardware while you, the local manufacturer cannot. That is a threat.
These big tech companies, they make double digit revenue numbers every year once they're on the device, but the TV manufacturer, who brought the tech company’s OS into the living room, has to try and survive on a five to ten percent margin. That's it for them.
We, on the other hand, have a smart revenue sharing model with the TV manufacturers. Over the lifetime of the device, as long as it is in the living room, the TV manufacturer gets a share of whatever revenue we generate on the device. The more devices they sell, the more money they make. That’s a very compelling proposition.
AW: Where do you see the most opportunity for Foxxum in the coming year?
RL: Traditionally, our key regions are Europe and Latin America. Europe is a good example of what we do best.
It’s very different from the US market, which, by the way, is already fairly saturated. The US market is quite easy—you make a device, you only need one language, and you can serve 350 million people with 10 premium apps. There is no need to understand any local issues.
But if you want to go on the European market, you have 27 countries, which means 27 separate versions of the top five local premium apps. It's a very fragmented market—you have different languages and different retailers.
That's where we come in. We understand the markets, we understand the customers, we understand the TV manufacturers.
Sometimes, when I see US companies in the European market, they're just applying the same strategy that they applied in the US and it feels a bit naive.
What we’ve learned is that the hurdle of having to account for 27 different countries is very tough— it's like running a marathon. And we've been running it for 10 years.
So Europe, Latin America, MENA, Africa—anywhere you have a lot of local content and manufacturers, and dozens of countries, each with its own unique issues—that is our market. And to frame the market size, we are talking about roughly 500 different TV manufacturers that are all strong in their local market. These are the customers that we are talking to and why we are so bullish on our prospects.