So I was browsing my usual sites this morning while drinking a cup of Gevalia coffee and I read an interesting article that I’d like to share with you guys.
As reported by Broadband TV News, in 2011 worldwide TV shipments fell for the first time after six consecutive years of growth, according to NPD DisplaySearch.
There were a total of 247.7 million TVs shipped across the globe last year, down 0.3 percent since 2010.
“The causes of slow demand in 2011 were complex, and although LCD TV showed growth, results were well below industry expectations,” Paul Gagnon, director of North America TV research for DisplaySearch, told The Los Angeles Times.
He said in part the low shipment levels were caused by excessive inventory levels early in the year in both the U.S. and European markets.
Also a decrease in demand in Japan after that country cut government subsidies that almost encouraged switching out digital boxes.
The article stated, “There is also the growing phenomenon of people cutting the cable and satellite cord and going to the web and hand held devices for cheaper, or often free, entertainment.”
Although, there is a significant number of people “cutting” or “shaving the cord,” I don’t believe that consumers are using mobile phones and tablets as replacement devices, but rather supplemental devices that extend the TV experience.
Cable and satellite subscriptions are down across the country.
Comcast lost 238,000 television subscribers in the second quarter of 2011 alone while Time Warner Cable lost 130,000 and Dish Network lost 135,000.
Television consumers searching for cheaper alternatives during challenging economic times was cited as one of the reasons people were cutting the cord…and who can blame them? I know for a fact, I’ve thought to myself, “gosh, there’s nothing on cable.” And I have something like 350 channels, so I can see how paying $80-$100 for cable or satellite is frustrating when there are times where there is still nothing on that you want to watch. Notably, I still have cable, though I have “shaved the cord” over the past couple of years.
There’s no doubt that Over-the-Top (OTT) video services like Netflix, Hulu, Amazon, and Comcast’s OTT play Streampix are on the rise, which is fueled by consumer demand to watch what they want, when and where they want it. Cable and satellite providers are responding by creating their own multi-screen, TV-Everywhere solutions. Who’s winning? The customer, I believe. We have more options for watching video content than we’ve ever had before and it’s really exciting!
So back to the point that TV shipments were down last year. I don’t necessarily think it has much to do with the decline of cable and satellite subscriptions. Like I mentioned above, I don’t think people are replacing TVs with their phones and tablets, as much as they’re simply extending their television experience.
Now, I know NPD DisplaySearch has done a tremendous amount of research on this subject, but I have a couple of my own theories that could have contributed to the fall of TV shipments in 2011.
As a disclaimer, I’m going to come at this from a connected TV point of view. I know the original report didn’t indicate TVs vs. connected TVs, but since more and more TVs are being embedded with Internet functionality, I think this may be a contributing factor to the decline in overall TV shipments. There are some obvious barriers concerning the connected TV market of 2011. I believe 2012 is going to be a big year for the TV, specifically the connected TV.
I think for a lot of people, the idea of hooking up the Internet to a television set is still confusing. I can speak to this because when I have told relatives in the past about what we do at Float Left Interactive, it goes over their heads the first couple of times.
Another big consumer trepidation is the fear of obsolescence. Given that the average lifecycle for a TV is, or was, around 5-7 years, the idea that a TV purchased today could possibly be outdated next year is very unsettling, not to mention consumers can get a lot of the same connected functionality out of a $100 streaming media player or blu-ray player There are many moving parts to a connected TV; hardware, software, web browsers, app stores, etc. It won’t be until the consumer feels that the TV they purchase today will still be relevant in 5 years that we’ll have eliminated this fear, which is why I feel good about the new class of TVs coming out this year. There is a lot of new technology being put into sets this year. For more information check out my review of this year’s Consumer Electronic Show.
According to research by Topology Research Institute (TPI), nearly 53 million smart TVs are expected to ship in 2012, which is more than double the amount of what was previously projected and approximately 75% more than the number of connected TVs that shipped in 2010.
TRI said social networking functionality is expected to be the “killer app” for smart TVs, with other features like user interfaces, gaming functions, Internet browsing, OTT (Over-the-Top) Video, and search tools all playing a role in market success.
While TV apps will play a major role in the “smart TV wars,” TRI said the amount and quality of video content provided by TV vendors will be another decisive factor.
So how do you think the TV or connected TV landscape will pan out in 2012? We’re interested to hear your feedback. Leave us a comment below or contact us for more information.
Interested in how Float Left Interactive is helping companies deploy their Over-the-Top and TV Everywhere solutions? Check out our main site http://www.floatleftinteractive.com or call us at 1-888-505-5763.
Take care.
connected TV, cord cutting, cord shaving, internet tv, IPTV, multi-screen video delivery, ott video, smart tv, tv everywhere
(JUPITER, FL) May 18, 2012 – Float Left Interactive, a leader in TV application development and over-the-top video solutions, today announced a partnership with Shear Enterprises to launch Shear TV on the Roku Digital Video Player and Yahoo Connected TV.
