Global Smart TV
March 18, 2013, NPD Flat-Panel Display Conference, San Jose, CA—Paul Gray from NPD DisplaySearch examined the forces at work that affect TVs, as mobile devices acquire television-like capabilities. The TV set manufacturers have been adding new features and functions like social media and Internet connectivity, but these efforts may be insufficient.
The TV is no longer the center of the system, but is now like a cloud with no central point of focus. This change in focus reorders the rules of interaction as cultures and technologies continue to change. TV has been defined by broadcast standards, but is now moving to software, content, and apps. It is no longer dominated by engineers. Now consumers and content providers are the drivers.
TV adoption reflects changes in media consumption and also highlights regional differences. China was the largest market in Q4 of last year and the attractiveness of TV has links to media markets. There is low cable penetration outside of North America and high levels of piracy in China and Spain is influenced by the release windows for major productions. Europe is moving to hosting content on the web for free just after the broadcast. Pay per click adds revenue because consumers want some additional features.
North America needs take two steps to change a situation. First is to change behaviors and secondly to find ways to increase prices. In comparison, in Europe the change to digital and the addition of more channels led to some experiments, but most people there don’t want to spend €99 for more than one trial for a feature that is in the TV.
North America has a lot of content going over video on demand, whereas other areas expect free, even with low quality. Little external content goes to the TV outside the US, while TV in the US is a connected device. The BBC reports that viewership is up, but not on the TV, instead people are starting to watch on mobile and tablets.
At issue is the fact that a smart TV is not the same as a phone with a 55-inch screen. The formats, resolution, and interfaces differ, and there is no touch. The TV is considered a shared, public screen within the house, and many people may not be comfortable having others see what they are watching.
Smart TV also has to be concerned with clutter. Many smart devices still behave like a PC with text messages and click and go operation. YouTube is almost right, but the site often has strange recommendations and links. The smart experience doesn’t flow and is not a lean back experience. Broadcast still has better curation and the transitions are smoother.
The current TVs have acceptable functions, and the broadcast and cable vendors are helping catch up with on-demand movies from portals like Netflix, sharing through Skype, and second screen apps. The availability of assist information like context, and extra depth like scores, back stories, etc. helps. Now the play along apps, casual gaming, and player participation functions are additional draws.
The biggest issue for TV is the lifecycle mismatch. Hardware evolves fairly quickly, but the sets are around for years. Samsung is trying to address the issue with their “evolution kit”, so the set can be upgraded in place. The TV has never faced Moore’s law for functions before. Technology changes very quickly, CPUs can double in performance in 18 months. The TV makers are providing piecemeal fixes like a internet jack on a different part of the box. Will this lead to a MHL stick?
The TV might become just another docking station. This would follow in the steps of the audio industry, where differentiated functions exist in an open standards world. The handheld devices are evolving too fast for any other industry to keep up. The increased processing power can be used as a virtual set top box, and Miracast and DIAL will be used to connect to other devices.
The alternative is to become a thin client partner. This configuration would allow for location-based and cloud services as HbbTV with QR codes. The HbbTV in Europe is a consumer electronics variation of HTML and the software would allow for Web and broadcast feeds. In Brazil, the Ginga standard allows for mixed, multi-screen functions and a better connection to mobile devices. Interactivity is based on the TV set.
The future of TV is going to be different in the US than in Europe and Latin America. The drivers will be open standards and thin clients with basic functions and building blocks based on standards. In China, the high-powered functions for TV are being developed, but are raising issues with Beijing. Everywhere, consumers follow free, except for North America where the content is still locked down, because the cable TV money dominates. The way to break out may be a simple TV with a MHL stick for connectivity to other media sources.
