Smart home integration ‘key to smart TV success’

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In a joint presentation with Statista Research and Analytics at IBC 2018 in Amsterdam, FFalcon Technology, a part of TCL Group, revealed that the TV market has entered a new generation, where smart TVs are set to penetrate the global industry via smart homes.

With global smart TV shipments set to reach a total sales value of $250 million by 2023, and the number of smart TV users estimated to be 762 million by 2020, the smart TV ecosystem has more than doubled in the past five years.

The presentation, entitled ‘The Revenue and Business Opportunities for the Smart TV Ecosystem’, was based on a new whitepaper FFalcon Technology had co-released with Statista at the event. CEO Tony Guo highlighted that, due to saturation in the TV market, the connected home is the next revenue opportunity, thanks to artificial intelligence (AI) and the internet of things (IoT) offering new monetisation potential via their integration on all smart TVs and other devices.

Compared to AI, Tony revealed that IoT is a more useful business tool for the smart TV industry overall though, as AI is more centralised while IoT makes it possible to distribute on a wider scale. He also discussed how the media industry is being restructured as the content globalization cycle becomes ever more shortened, thanks to instant access and better availability over a variety of streaming media players, such as Netflix.

In the past, Tony acknowledged, global audiences had to wait a long time for a regional movie or show, but nowadays, thanks to streaming media players, people can consume content at almost the same time as it’s released, without any region restrictions. Today’s distribution sequence and channels also no longer conform to the old ways, he announced, thanks to shows and movies now being launched online.

Tony highlighted that, although the smart home market is still far less valuable than the mobile internet, the rise of AI and IoT is set to bring far-reaching significance to the smart TV’s development within connected homes – something he indicated was required as smart TVs look set to hit the glass ceiling. The business value behind the smart TV market of the future will be the integration of more content providers he noted as, by 2020, OTT video services will generate $30.64 billion and the market size of mobile payment will reach $2,000 billion.

Statista head of research projects Eike Hartmann confirmed that the business value behind the smart TV ecosystem will become invaluable as internet penetration soars, with internet penetration seen as a key driver for smart and connected devices.

Consumer electronics’ revenue is falling, from $1,040 billion in 2014 to $928 billion last year, and television revenue is having a similar decline, from $141 billion in 2014 to $105 billion in 2017. Eike admitted that this was due, in part, to competition forcing the average price of TV sets to drop.

However, he went on to note that the usage of connected devices in North America (39%) exceeds those in China and Europe (both 29%) and the vast majority of people in the USA using smart TVs, streaming media players, smart speakers and the internet tend to be between 30 and 49 years old – so the US professional age group is still a big market for brands and players. In Germany, the number of people aged 50 – 64 using smart TVs and the internet but who do not have streaming media players or smart speakers is yet another business opportunity identified within the whitepaper.

Around one-third of the total internet population is connecting their smart TVs to the internet, which is slightly higher than streaming media players, Eike revealed, but while smartphone and TV consumption is growing, the whitepaper found that streaming video consumption is seeing a decline in linear TV viewing. Eike conceded that while this trend is advancing in the US and China, overall, audiences spend more time watching linear TV than they do digital, so linear TV is not dead yet and nor will it be for the foreseeable future.

Success in the smart TV ecosystem will be in partnerships and development to offer unified UI, as linear TV remains important so supporting it is imperative, the whitepaper concluded. Other keys to success were integrated devices and supporting integration of digital consumer devices to improve users experiences, and apps that enhance the true value of the TV. These were all essential, the whitepaper showcased, to ensure players and brands stay ahead of customer demand, offering a variety of streaming services rather than providing a limited selection only.

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