Connected TVs and IP-enabled set top boxes will be instrumental in driving the global installed base of TV-centric connected devices to exceed two billion by 2017. And by then, 80 percent of all TV sets sold worldwide will be enabled for online connectivity and smart features, making apps the next great opportunity for manufacturers and pay-TV providers to differentiate with unique features and content.
According to the latest research from Futuresource Consulting, smart TVs, set-tops, game consoles, Blu-ray players and low cost digital media adapters pushed the market past one billion units in 2013.
"TV sales account for 70 percent of traditional audio-visual consumer electronics market value, and smart features and connectivity are the latest in a stream of innovations to sustain the industry, drive replacement demand and encourage consumers to upgrade to the next big thing," said Jack Wetherill, senior market analyst at Futuresource Consulting.
Forty-four percent of the 225 million TVs shipped worldwide in 2013 offered smart features, and consumers now increasingly expect these enhancements on mid-range as well as high end models, he added.
Three years ago, less than 30 percent of people who owned a smart TV actually connected it to the Internet. This has now risen to 68 percent on average today, with the United States leading at a 79 percent connection rate.
Futuresource’s research with retailers suggests that consumers are attracted to smart features like gesture control and facial recognition, which may be harnessed for networked applications longer term.
And, despite the rise of over-the-top (OTT) content and connected devices, the STB market remains robust, sustained by a new generation of EPG-led platforms which integrate DVR functionality with broadcast, cable and IP networks. These provide a seamless consumer experience in time-shifting, discovery, navigation and on-demand access to content. STB shipments remain high (220 million units in 2013), dominated by pay-TV providers who are upgrading to integrate IP services with broadcast content and on-demand functionality via advanced user interfaces, the firm found.
Game consoles currently lead the way as the most popular TV-centric media player solution, with both Microsoft and Sony building entertainment content and service partnerships to add value for their networked users, Futuresource said. With the recent release of Xbox One and PlayStation 4, games consoles are high volume - 31 million units worldwide in 2013 - and moving into a new cycle, though the overall market is expected to gradually contract from 2015 onwards.
"In parallel with all this, ownership of personal multimedia devices has soared from 2.8 billion in 2013, on track to reach 4.4 billion by 2017 as tablets and smartphones become ubiquitous and supplant PCs as alternative viewing platforms," says Wetherill.
And, as fixed and mobile broadband both continue to evolve in speed and capacity, alternative service-level infrastructures are being created to reach the huge base of IP devices with on-demand and simulcast content at quality close to, or matching, that of broadcast. "Both TV-centric and mobile multimedia IP devices will drive growth in online content distribution, but it is clear that consumers like the personal nature of second screen, and tablets will elevate multiplatform consumption to a whole new level,” said Wetherill.
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