TV makers not making smart move with Smart TV adoption

Joseph O'Halloran | 22-08-2012

Despite accelerating global demand for smart TVs, their makers are missing out on billions in revenues according to a new report from TDG.

In the Smart TVs 2012-2017: Connections, Use, and Portal Revenue report, the analysis argues that even though smart TVs will likely diffuse widely in the next five to 10 years, new apps and services will emerge that cannot be supported by the smart TV's embedded portal. Indeed it warns that TV manufacturers will be largely unsuccessful in generating new revenue from these net-connected platforms with issues such as portal fragmentation alone to result in $1 billion in lost ad revenue.

Accordingf to Colin Dixon, Senior Partner and author of the study, lack of support from the smart TV's embedded portal will inevitably drive consumers away from using their smart TV for net-to-TV purposes and toward less expensive devices like net-enabled game consoles, Blu-ray players, and iSTBs.

“Consumers in search of the latest [over the top] OTT features are much less likely to replace their $2,000 big-screen HD smart TVs - platforms with an 8-10 year life cycle - than they are to spend $100 on a new sidecar device with a 2-3 year life cycle and add it to their TV system," he said.

Dixon also pointed to what called the “dramatic consequences” of platform fragmentation that today characterise the smart TV industry, and that frustrate advertisers struggling to decide which platforms to support and how to best integrate multiple outlets into their workflow. When combined with gaps in the product upgrade cycle and the speed at which competitive ancillary platforms are leapfrogging smart TVs, TDG warned TV OEMs that they are set to face significant challenges even as platform sales experience rapid growth.