nScreenMedia OTT multiscreen media analysis

Despite strong sales, smart TVs fail to connect with viewers

Smart TVs continue their strong roll-out across the world. iSupply reports that worldwide shipments of the devices were 66M, or 27% of all TV shipments, in 2012.  Consumers also are connecting the devices: in Western Europe connection rates are as high as 70%.  As well, major smart TV manufacturers have the most popular video services available through their smart TV portals. Yet evidence is mounting that, at least from the point-of-view of video, viewers are simply not using smart TVs to watch.

% of requests from smart tvsThe BBC recently released data about the devices being used to watch TV shows through the company’s OTT video client, iPlayer. In the report the company lumps together smart TVs and connected TV devices such as Internet Set-top boxes and connected Blu-ray players. This entire category of devices garnered just a 3% share of all streams. The BBC supports 20 different smart TV brands and a hundred or more specific TV sets. Evidence is that the smart TV portion of video plays is even smaller than that.

I recently asked several streaming video companies about what share of streams they monitored were going to smart TVs. The response I got back was terse: we don’t track it. The reason given for not breaking out smart TVs was because the total was too small. At the same time, the companies were happy to provide data on mobile devices, PCs and game consoles.

What is going on here? Smart TVs are selling well and the evidence is that large numbers of consumers are connecting them when they bring them home. Yet they are not being used to stream video. This is stranger still when you consider that, when watching TV content, clearly consumers would prefer to watch it on the TV. Smart TVs are arguably the most direct way to do so.

There are two major ways in which smart TVs are failing to engage with consumers. The first is that the interfaces themselves are too complicated and simply not TV-like. When using the Samsung interface I constantly find myself squinting and leaning forward to figure out where the highlight is on the screen and navigate around. As well, there is no video playing and no direct help provided to watch something save for search – and this only in later models.


Fox New Girl

FOxNow on Samsung BluRay Player
The second problem is an issue I’ve been talking about for two years: fragmentation. For content providers, it is too hard to keep up with all the platforms and versions. How does this impact the viewer? Here’s a great example I ran in to last week. I spent time recently with Accedo Broadband’s Mark Adams, head of North American operations.  He told me they had just finished an upgrade of the FoxNow app that allowed the viewer to watch full episodes on Samsung smart TVs. I fired up my Samsung Blu-ray player to give it a try at home. I upgraded the OS and then went to find the FoxNow app. In the Samsung app store it said I could now watch full episodes. Alas, when I installed the app all I could play was clips. There was no error message, no hint there was problem. I just couldn’t find any full episodes.Mark later told me it was probably because I needed yet another upgrade to my OS to be able to use the new version of FoxNow, an upgrade currently not available. However, after this experience I doubt a viewer would ever bother using the smart TV portal again. Better to just use the more reliable Xbox or iPad to catch the latest show!Why it mattersSmart TV manufacturers have spent a fortune on adding smart TV functionality to their sets and promoting the functionality to customers. This has largely been successful in persuading consumers to buy and connect the devices.

However, any monetary benefit the device makers hope to derive from the smart TV portal is predicated on people using them. Evidence is that consumers are simply not using the portals, preferring other, simpler devices instead.

With wafer-thin TV profit margins, manufacturers were counting on portals to provide incremental revenue. It seems unlikely this strategy will be successful.

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