INdustry: DisplaySearch Provides Much-Needed Data on the Smart-TV Landscape

The search is over. I've been looking around for some time for market data on smart-TV shipments, and it's been relatively elusive--until now. Earlier this year, DisplaySearch, a long-established market data company, started publishing their smart-TV report.

Last week, I had a chance to catch up with lead analyst Paul Gray, author of the report and DisplaySearch's top guy for the smart-TV business globally. Paul had an interesting take on the overall structure of the market. He's taken to segmenting smart TV's according to the sort of access that they provide to consumers. There are three types of TV's, according to Paul's taxonomy:

Basic Connected TV's: able to tune Internet Video from the open Internet with defined sources.

Set-Maker-Controlled Smart TV's: consumer access to Internet content available from a collection of curated sources (walled garden, fenced prairie...call it what you will).

Consumer-Controlled Smart TV's: typically include the curated content, but also able to access the open Internet.

The definitions are interesting and I think most of us believe that smart-TV adoption to date has been a bit stagnant, because TV OEM's have insisted on deploying Set-Maker-Controlled Smart TV's.    

The odd thing is, we're broadly wrong. Or at least I was.

First, the DisplaySearch report shows a dramatic shift in market share from Set-Maker-Controlled TV's to Consumer-Controlled TV's. In 2011, Set-Maker-Controlled TV's represented 57% of all smart TV's. Through Q2, 2012, that share has dropped to 30%. At the same time, Consumer-Controlled TV's have jumped from 19% to 64%--an amazing sea change in the global marketplace. During the same period, Basic Connected TV's have declined from 24% to 6%.

Second, smart-TV adoption hasn't been stagnant--at least not globally. The problem is local. North America rather dramatically lags global market adoption. Globally, demand for smart TV's has been rising steadily and represented 30% of all new TV's shipped in Q2, 2012. In North America, just 17% of new TV's sold were smart (all three types), and in North America, the percentage has actually dropped recently from 21% in Q4, 2011.

Why? Well, lots of reasons. (Though I suspect this may be informed by a bit of Brit bias), North Americans are showing a strong bias, according to Paul, for "big and cheap." And media markets vary quite a bit. In Europe, for example, roughly 50% of consumers in the major media markets do not subscribe to pay-TV. That means that TV networks are far less dependent on pay-TV operators for their cash flow and are much, much more willing to use the Internet to provide value-added services directly to consumers. As a result, Internet-connected TV's are fundamentally more valuable and useful in Europe than they are in North America.

The report is chock-full of data and observations about market structure, including market share by manufacturer, by market, by screen size, by TV type, and by any combination thereof.

You can learn more about the report here: link

The report also tracks TV apps and ACR. Paul will be joining my ACR TV panel at TVOT NYC in December where he will elaborate on his findings...and many controversial views of the market.  

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Michael Collette recently changed hats and is now the CEO of TV Interactive Systems, market-leading provider of ACR services on smart TV's. Limited public information is available about the company. To learn more, contact Michael directly at Michael.collette@tvinteractivesystems.com.

North America