Report: Smart TVs Getting Wider Adoption Than 3DTV20 Dec, 2011 By: Erik Gruenwedel
Consumer demand for Web-enabled TVs is double that for 3DTV this holiday season
One in five broadband households in the United States intend to buy a new television by the end of the year, with 73% of those buyers opting for an Internet-connected “smart” TV, according to a new Parks Associates report.
Demand for Web-enabled television is nearly twice that for 3DTV, underscoring the appeal for lower-cost video entertainment derived from the Internet, compared wth 3D.
The Parks study — “Consumer Decision Process: Holiday Intentions” — found that middle-class households with annual incomes from $50,000 to $75,000 are seeking Internet-connected TVs. Indeed, 20% of middle-class homes intend to purchase a smart TV, compared with 12% of households with incomes above $75,000.
“Smart TVs are now pushing into the mainstream, whereas previously smart-TV buyers were largely early adopters and those from high-income households,” said principal analyst Kurt Scherf. “The combination of a maturing product ecosystem with great holiday deals is putting smart TVs within the reach of the American middle class.”
While wider consumer interest in smart TVs may be good news for equipment manufacturers, increasing consumer access to over-the-top, or OTT, video content via Netflix, Hulu Plus, Amazon Prime and YouTube is worrisome for pay-TV providers. That’s because consumers who purchase a smart TV this holiday season also are more likely than average pay-TV subscribers to cancel or downgrade their pay-TV service within the next 12 months, according to Parks.
Indeed, No. 1 and 2 cable operators Comcast and Time Warner Cable reported a combined loss of nearly 300,000 video subscribers in their most recent fiscal quarters — losses the companies attributed to the economy and not necessarily OTT services.
“Smart TVs expand a household's available content choices without raising content costs,” Scherf said. “Consumers pay a premium for the device now, but our research indicates these purchases could be part of a long-term plan for many budget-conscious households to reduce their overall [content] expenditures.”