Smart TV apps represent the latest threat to the struggling pay TV industry. Watching TV is no longer based around flipping through channels at broadcast, but finding the right content portal for what you want to watch now.
In a recent report, BI Intelligence looks at the data and trends behind the TV app market, explains why it’s still nascent and messy, and why significant growth seems inevitable. A successful TV app platform could significantly shift the balance of power in entertainment, and allow for much greater probabilities of success among newcomers versus incumbents.
Here is the market smart TV apps are going after, and the reasons TV apps could be so revolutionary:
- There are some 800 million pay TV households worldwide, according to MRG.
- In America, the average person still spent more than four hours per day watching TV last year, and more than five hours per day engaging with all screens, according to Nielsen.
- TV also still represents the majority of worldwide ad spending: $US350 billion last year, or 63% of all ad spending, according to Nielsen.
- A survey by Nielsen and YuMe found that 17% of Internet connected TV users plan to decrease or cancel their cable subscription in the coming year.
- The old guard, represented by cable and entertainment conglomerates, will not be able to fend off improvements and user experience innovations like those that apps are bringing to mobile phones.
- The Smart TV revolution will not just be led by new TVs with built-in Internet connections. Consumer will also adopt less expensive game consoles and set-top boxes like Roku and Apple TV, which transform traditional TVs into smart TVs with access to app stores. At least 20% of U.S. consumers already have their TVs connected in one of these ways.
- TV apps can sync across PCs, tablets, smartphones, and TVs. So they’re better suited to how we consumer media today.
- Apple and Google seem like logical smart-TV leaders — Apple through its skill of designing and marketing great platforms, and Google through its prowess in digital video and advertising. Also, pay attention to Samsung and Microsoft, among others. But consumers won’t gravitate to smart TV apps until the app stores are stocked with well-curated collections of great software.
- Nonetheless, the existing smart TV app market is way too fragmented between a half-dozen or so immature platforms, and worse — most of these are very difficult to develop for.
In full, the report:
- Looks at data on Internet connected TV adoption among consumers
- Digs into new video consumption behaviour and explains how an app-centered TV will leverage the trend toward digital video
- Discusses the cast of characters — from media and cable conglomerates to manufacturers and software giants — trying to get into the smart TV space, and who will likely win
- Looks at what consumers are doing on their app-enabled TVs
- Juxtaposes alarming trends in the pay TV market, with healthy growth in Internet-enabled TV usage
- Examines what needs to happen for smart TVs to emerge as a key app development platform
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