With the economy wobbling steadily towards a recovery and the digital TV transition well behind us, most consumers appear content to sit on their existing TVs, looking for a rock-bottom deal as an incentive to upgrade.
There are a host of reasons why TV sales remain sluggish. The most obvious is spiking interest in so-called ‘second screen’ TV viewing platforms, such as tablet computers, laptops, and mobile phones; all at the expense of conventional TV sets.
Another reason is the low rate of turnover on TVs purchased within the past 5 to 10 years. (Yes, I know people that are still using older Samsung, Sony, and Mitsubishi rear-projection TVs from the start of the last decade!) I’ve even run into a few folks lately that have massive flat-CRT TVs from 12+ years ago that are still humming along. ‘Yes,’ they want to replace them, but ‘no,’ they don’t have the cash right now.
You can’t fault TV manufacturers for trying. There was plenty of hoopla back in 2009 when 3D TVs made a splashy entrance. Today? 3D functionality is mostly an afterthought, and is built-in to more than half the models in any given line-up.
I’ll take a contrary position to many of my colleagues at Display Daily and state that 3D isn’t going to be a factor in driving TV sales for several years – that is, until a workable, quality glasses-free solution comes to market. And that will likely require 4K display glass to implement. Sales of 3D TVs have consistently been tepid in North America (stronger in China and Indonesia), and manufacturers aren’t talking much about them these days, as Chris Chinnock detailed in his CEDIA report last week.
What about demand for Internet-connected TVs? I figured Internet connectivity to be a big driver of future TV sales, but it looks like I guessed wrong – at least, in this part of the world. A recent study by GfK Associates revealed that NeTVs were most popular in China, Brazil, and India, while the United States, Great Britain, and Germany lagged behind. GfK went so far as to say that viewers in the latter three countries “…are stuck in an ‘analog’ mindset, whereas viewers in emerging markets are more likely to exploit the digital capabilities of Connected TV.”
According to the GfK report, only 29% of United Kingdom and 29% of U.S. consumers indicated that they were specifically looking to buy an Internet-connected TV, as opposed to 61% of respondents in India and 64% in China.
There was a hidden “ah-ha!” in the GfK report, though. 67% of all respondents are definitely interested in some form of touch and/or gesture control in a television, and 43% want to control their TV with something other than a traditional remote control. Perhaps TV manufacturers need to focus more on improving the user interface to drive future sales?
One of the problems with NeTVS is the diverse and non-compatible operating systems and GUIs used by different manufacturers. At the recent IFA show in Berlin, LG Electronics and Philips announced they would join forces to develop a common NeTV platform for listening to music, watching Internet videos, and playing games on line.
Both companies are founding members of the Smart TV Alliance (http://www.smarttv-alliance.org/) and are actively soliciting additional members. Their goal is to develop one common platform for apps and the OS so that consumers feel comfortable working with any TV brand.
However, CE giants like Panasonic and Samsung are deeply invested in their own platforms, like VIERA Cast and Smart TV, and have shown no enthusiasm for working with competitors. “Alliances may be possible, but we’re not at that stage yet,” Hyun-suk Kim, the head of Samsung’s TV business, said in a Bloomberg story. “Everybody is using their own platform right now, but the small companies find it very difficult to get content and services. Having a unified platform would be very helpful for the industry but I’m not sure it’s the right time for Samsung.”
Could Google’s Android platform be the answer? The first version of Google TV was met with a large yawn, and the second roll-out isn’t faring any better, according to Bloomberg. Both Sony and LG have built-in Google TV GUIs in their TV products – a huge improvement over the clunky, slow first version. But to date, consumers aren’t buying it.
Perhaps the answer is content delivery. TV manufacturers have tried for years to incorporate some sort of content pipeline interface and advanced program guide, with limited success. At one time, LG even built hard drives into several of their plasma TVs for time-shifting, and the number of ‘boxes’ available for Internet streaming is seemingly endless.
Today, most popular video and movie streaming sites are directly accessible from ‘apps’ and built-in channel buttons on late-model TVs; the best-known being Netflix, Hulu, and YouTube, which together account for better than 70% of all Internet video traffic.
Harnessing content and selling it is what Apple is all about, and it’s long been rumored that they will launch a TV this fall. Not so fast! says another story on Bloomberg.com. According to the story, Apple has run into a brick wall with cable companies such as RCN and Comcast, along with major networks like CBS.
The reason? Cable and media companies are concerned that a better-designed Apple product will undermine their business model, and fear that Apple will create a better user interface. As a result, analysts are predicting that we will definitely not see an Apple-designed television this year. “If I’m a cable company, do I really want to let Apple into my house?” said Jason Hirschhorn, the former chief digital officer at MTV.
The last consideration is 4K, which for 99% of all consumers is simply a pipe dream – too expensive, no content (yet), and little perceived value. Yet, that didn’t stop Sony and JVC from both announcing 84-inch 4K LCD TVs at IFA and CEDIA. (And yes, they are plenty expensive!)
There are two problems with these announcements. First off, Sony hasn’t made a profit for the past 8 years in televisions, and in fact has lost a considerable amount of money, dragging the company’s stock price down. So why bother with a $20,000 TV product that will sell in miniscule amounts? Probably to be cutting-edge and trendy, a mindset that has driven Sony’s marketing and sales efforts for many years now.
Second, JVC is a very minor player in the TV business. As a small Japanese electronics manufacturer working under tight budgets, they can’t hope to have significant sales in televisions, and may have just brought this product out to make a splash. They do much better with their industry-favorite D-ILA LCoS home theater projectors, of which there is now a 4K version.
Throw in LG’s recent announcement that they won’t be able to ship a 55-inch OLED TV to market in Q4 after all, and you can hear a loud, collective sigh of despair and frustration rolling eastward across the Pacific Ocean. We’re less than three months from Black Friday, and no one has the answer(s) yet…
Posted by Pete Putman, September 14, 2012 2:49 PM
About Pete PutmanPeter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.
Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.