Brands rethink content strategies as smart TV sales rocket
| 07 November 2014
Despite skyrocketing consumer activity, a survey from Futuresource has indicated that the smart TV industry may be re-assessing its focus due to limited direct ROI and a shift to UltraHD.
In its Smart TV Report, the analyst calculates that sales of such connected TV sets reached 90 million units worldwide by the end of 2013 and are set to grow at 21% CAGR to reach 228 million in 2018.
Futuresource expects that by the end of 2014 30% of homes in developed regions will own a smart TV, rising to 70% by 2018. It also noted that around four-fifths of the smart TVs in people's homes are connected to the Internet, with the pervasion of embedded Wi-Fi and auto-boot on track to lift this figure to over 90% by 2016. It observed that over half of owners are using a service on their smart TV at least once a week, with 40% of US owners saying they use a service every single day.
However when it came to monetising apps that ran on such devices, the analyst said that was at present little opportunity for TV brands to do so with consumer interest concentrated on free or subscription video, and far lower interest in other genres or general Web use.
"[Smart TVs present] a radically different profile to the mobile market," said Futuresource senior market analyst Jack Wetherill. "Differentiating the offering by providing exclusive content is also challenging, and there are still very few compelling examples. In addition, the on-going cost of platform development and support for apps developers is proving costly and is not yielding fruit. "We could be advancing beyond the point of no return. Consumers increasingly expect smart features and apps, and there is no way for a manufacturer to run a feature delete on its products and remain competitive, so the market will continue to develop."
Futuresource suggested that as a result the smart TV juggernaut may mean more TV brands gravitate towards Android TV, as Google would share the load of future development and support. Noting that Sony has already confirmed that it will launch Android sets in 2015, as have two Chinese brands, TCL and TPVision, it added that Samsung has a sufficiently high share in smart TV to maintain its own platform and apps program, as well as seeking exclusive content, but is also promoting Tizen as an open OS alternative to Google.
"Although the industry spotlight is firmly focused upon UltraHD and curved screens, smart TV continues to pervade the market as a value added feature, and UI refinements like voice and gesture recognition, tile-driven navigation and device mirroring appeal to consumers at the point of sale as part of a premium set proposition," Wetherill added. "Although there is a myriad of ways to access online video, smart TV integrates broadcast and broadband services within a single user and control interface, setting it apart from digital media adaptors and the like, as well as opening the door to interactive long term concepts like targeted ad insertion and web/broadcast overlay."