While we have just learned that Google Stadia and GeForce Now will soon be incorporated into LG televisions, the Wall Street Journal reports that the South Korean multinational has acquired a controlling stake in Alphonso Inc.’s shares. The company shows its ambition to become a major player in streaming advertising.
Indeed, the Covid-19 pandemic has accelerated the use of streaming services significantly and created opportunities for those selling advertising time on applications and distribution platforms. Electronics giants like Samsung, Vizio and LG want to use this and supplement their TV sales with advertising income.
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LG’s investment in Alphonso goes in this direction. Indeed, the latter specializes in television advertising technologies, data and measurements. “LG Electronics has been offering consumers its own free, ad-supported streaming service called LG Channels since 2016 and will continue to make efforts to improve consumer services,” said Edward Lee, director of LG webOS advertising sales team based in Seoul. “The aim of this acquisition is to leverage Alphonso’s software, data analysis and media activation capabilities for all LG home entertainment products, especially smart TVs, and to better respond to consumer needs for content consumption,” he continued away.
The Korean manufacturer has invested nearly $ 80 million for a nearly 60 percent stake in Alphonso. The company’s current investors will be acquired by LG as part of the transaction. The remaining shares are held by the company’s founders and some of its employees. Alphonso is therefore backed by a unit called LG Ads, providing its tools for buying ads, managing data, and building a full offering for selling and measuring streaming TV ads. According to Ashish Chordia, CEO of Alphonso, this won’t affect the way his company works for other TV manufacturers.
LG will enter a booming market with companies like Roku experiencing strong growth. It is, however, a very new sector for electronics manufacturers who have to adapt to changing consumer behavior.