In the latest issue of IP Television International (available at IBC) we take a broad look at the Smart TV market. A report from TDG, quoted in the article, chastises TV makers for failing to make the most of their pivotal position in the fast growing Smart TV segment, though it does allow they have some real challenges in maximising their leverage.
These are consumer electronics makers that look to make sales in spikes when significant innovation comes along, and then keep them steady as the replacement market chugs along. They know that at the price point of the main home TV set, it takes a major innovation to ‘make the weather’ and trigger a replacement surge and, even then, the big sales will lag a year or two after the trigger technology as buyers wait for the innovator premium (or early adopter gouger price – you choose) to work its way through the system.
When these innovations come along the health of a brand (its survival even) can depend on how well it handles its design, marketing and pricing. The sea changes have been Colour, Stereo, Flat Screen, Flat Panel/HD and now, maybe, Smart. 3D looked a candidate for a while but the consumer has said the price- both in $ and in terms of having to wear daft glasses- is just too high.
Not surprisingly Smart was first ‘installed’ on the top end products of the high-end brands and most were bought without the purchaser knowing, or much caring, that the TVs could be connected. Indeed it remains a problem that many connected TVs simply aren’t (see our Survey in issue).
So, having provided the connection to the Internet- and thereby the route to their customers for all OTT TV services- how could the TV manufacturers benefit beyond a bump in flat panel sales? You can bet many white boards were filled with theories and a mega-forest of decision trees were drawn up before all of them, more or less, drew a blank.
Could they take a tiny commission off arriving TV services? But how would you administer that? And what about the refuseniks that your customers want to see? OK, what about targeted advertising or personal data collection? But that requires sophisticated software, and why risk the ire of your customers (don’t talk to Sony about data privacy!) for small and uncertain returns. So, will users pay for a super-sophisticated IPG and recommendation engine? Maybe, but you’ve got to develop it all just for your brand (what’s the point if you license it to others), and, anyway, plenty of third parties will be claiming to provide those services for next to nothing. And if you build a platform capable of handling all these complex middleware functions you will either put the price up unacceptably and/or frustrate your users when developments overtake its supposed sophistication.
TV makers have accepted that, by and large, users would rather keep bang up to date with $99 STBs and sidecars while their $1,000 TV set concentrates on displaying the best pictures and sound. All TVs will be connected soon, in the same way they are all flat now, and all will have some kind of UI- or app hopper- built in by the maker, but mainly that will be overridden by the users pay-TV or OTT provider of choice.