A New Generation Of Smart TVs Is Changing The Way We Watch TV
In the early days of streaming, peripheral devices like Roku and Amazon
TV OEMs had no experience creating interfaces and it showed. What's more, they were saddled with underlying operating systems that didn’t allow for new apps or updates of existing apps.
TVs were expensive too—a new HDTV could easily run well over $1,000, and so consumers were not about to throw out their existing sets when they could just as easily pick up a streaming device for just $29 that gave them access to a whole world of streaming TV.
Two new studies, one from TVREV, sponsored by LG Ads, Samsung Ads and VIZIO and one from Magid, sponsored by VIZIO indicate that dynamic is rapidly changing however as the interfaces on smart TVs have vastly improved and everyone from Amazon to Comcast
The Falling Price of Television Sets
Possibly the biggest factor in the resurgence of the TV has been the dramatic price drop over the past several years.
Consumers can now buy a very good 55-inch 4K TV for $500 or less. That makes the TV the least expensive screen in the house, as laptops and smartphones can easily cost $1,000 or more.
This is a huge shift and it’s why both the industry and consumers are so bullish on TV sets, a marked change from the days when it was assumed that by 2021 much, if not most TV viewing would be happening on low-priced mobile devices.
A Better Interface Makes For A Better Experience
As both studies point out, the key to the dongle’s eventual demise is that the issues that once made it necessary no longer exist.
Smart TV interfaces are now as intuitive and easy to use as those found on peripheral devices and unlike their predecessors, they can be updated remotely with both new apps and new versions of existing apps. With so much change happening in the streaming marketplace these days, this is a top consumer priority.
The remote control devices on smart TVs have also caught up: the latest versions no longer feature bulky numerical keypads for entering cable channel numbers, but rather, have buttons to take you directly to your favorite streaming apps.
OEMs like LG, Samsung and VIZIO also now have their own free ad-supported streaming TV services (FASTs) with over one hundred linear-like channels featuring everything from news to comedy to children’s programming. This is helping to erase a key advantage the peripheral device manufacturers once had with The Roku Channel and Amazon’s IMDbTV, their own proprietary FASTs.
Consumers Like TVs Better Than Streaming Devices
One of the most interesting findings of the Magid study (you can find the initial summary of insights here) is that consumers already prefer smart TVs to connected devices or dongles.
It’s not just one or two features either, but every category from inputs (34% to 15%) to picture quality (32% to 17%) to reliability (36% to 17%) and even remote controls (35% to 24%).
Many of the additional consumer complaints Magid found, such as the clutter caused by too many cords, stemmed from the fact that the peripheral devices are just that: peripheral, and thus require their own remote controls and power sources.
That’s why Roku has spent the past several years building up its share of the smart TV operating system market via deals with manufacturers like TCL and why Amazon, Walmart
The Problem With Licensing Deals
The problem with these licensing deals however is two-fold. On the one hand, you are at the mercy of the manufacturer. That means you have no control over the quality of their televisions and a negative consumer experience from a poorly made device can impact your brand.
On the other hand, licensing deals often entail a smaller number of TVs, which means it will not be easy to achieve any sort of critical mass.
Roku has been licensing its OS for several years now, and has thus been able to gain some traction, but newcomers will have a tough time breaking in. Among the barriers they face are an already crowded market and no real consumer advantage other than perhaps price.
That’s also going to make it tougher for them to strike deals with programmers and/or to be first in line for app updates.
The Advantages Of Owning Your Own Hardware
Now that TV sets have proven they’re not going anywhere, consumers are starting to look at the future possibilities for TVs, which center around the TV being the hub of the smart home. This is something various OEMs have been talking about for years, and it seems to finally be coming to fruition.
Consumers are up for it too. According to the Magid study, they are looking to the TV as a hub for a number of activities from viewing local weather and traffic reports to ordering dinner to betting on their favorite sports teams.
This is an area where companies that own their own hardware have a real advantage as they can integrate these features into their underlying software so that they all work together via a single interface—no switching inputs necessary. That gives them a huge advantage over peripheral devices and licensed operating systems in the years ahead.
A Few Words Of Advice
While things are indeed looking rosy for the smart TV OEMs, there are a few issues that still need solving.
First and foremost among these is password portability—finding a way (maybe a smartphone app) that allows viewers to quickly and easily port all of their various logins from one TV to the next.
The other is actual portability—giving viewers the opportunity to move the TV set experience to mobile and desktop. While most of the OEMs have taken steps to make this happen, stronger cross-device integration will not only improve the experience for consumers, it will help ensure the dominance of the smart TV OEMs for years to come.