The inexorable rise of Smart TVs continues, with global shipments set to rise 15% this year, changing regional preferences and TV consumption patterns as a result, according to US analysts the NPD Group.
The accessibility of content and broadcast services is acknowledged as being critical to the development of Smart TVs in regions such as Europe and countries like Japan, while in China the availability of attractive free content on the Internet is believed to have had a similar effect.
There has been a significant jump in the proportion of overall TV shipments which Smart TVs account for over the past 12 months: just last year they accounted for 26% of all shipments in China and 34% in Western Europe in 2011, yet in 2012, this has grown to more than 40% in both regions. Japan has the highest penetration with more than 55%.
Surprisingly, North America is still only seeing around 20% of all TV shipments being for Smart TVs – the lowest level for any region, according to the NPD Group.
“North American households consume the highest levels of Internet video, averaging over 30 GB per household every month according to Cisco, yet they don’t seem attracted to connected TVs,” said Paul Gray, Director, European TV Research. “We find that North America leads by far in paid on-demand services, which tend to be tied to set-top boxes.”
Smart TV shipments are described as being “tightly linked” to content consumption habits. For example in China, there is plenty of free content on the internet and few structured services, which favours TVs with built-in browsers. Furthermore, Chinese consumers consider a TV to be a prestigious purchase and are prepared to invest more in them.
Conversely, Western Europe consumes more free content every month than North America does. Terrestrial broadcasters’ catch-up services are beginning to dominate in Western Europe.
These broadcasters have no interest in hardware, so connected TVs are flourishing with open standards like HbbTV rapidly gaining acceptance and evolving with new features. The development of the Ginga standard in Brazil is following a similar path in Europe, with commercial broadcasters uniting around a common platform.
“TV brands want to add more functionality to their TV sets.” Gray added. “Smart TVs that have browsers and can access the open internet are rapidly gaining share. Many TV brands introduced this function in their 2012 products.”
Nearly 9.5mn consumer-controlled (open Internet access) smart TVs shipped the second quarter of this year, with 43mn expected to ship in 2012, predicts the report. This figure is forecast to grow to 95mn in 2016.
Meanwhile, basic sets that link to the HbbTV and Ginga services are expected to enter at the lowest price points in Europe and Latin America, says the NPD Group, which predicts that the challenge for brands will be to bring enough value to their sets with extra functions.
New open standards such as HTML-5 are expected to help solve the problem of software updates and obsolescence in smart TVs, which should enable such sets to compete with cheap streaming boxes.