One of the stories coming out of CES in Las Vegas this week is about Smart TV's and what they will be able to do. Samsung is showing off its television set that responds to voice commands and gestures. LG showed a voice and gesture remote control. And, not to be outdone, Panasonic is working with a partner to have its own voice recognition technology.
All this is very intriguing, and potentially attractive to consumers, but we should look at some history here. About 30 years ago, in the mid-1980's, Nicholas Negroponte, running the MIT Media Lab, was working on voice command televisions. It has been in development for so long, it shouldn't be viewed as a seismic event. HD TV was also demonstrated way back then, and it took decades to finally come to the marketplace.
As you know, Smart TV's enable viewers, to watch video that is found on the internet, on their TV sets. This will open up a video library to them beyond anything they have access to right now. What needs to be asked is whether or not this is a technology that consumers really care about, or is this a feature that television manufacturers hope will stimulate a stagnant industry with falling prices? Keeping in mind that people generally upgrade their TV's about once per decade, the industry has a lot of missionary work to do to convince folks that they need one of these sets.
Yes, there are now roughly 25 million HH's with Smart TV's, but to hit critical mass, those in the center of the bell curve must be convinced that they need one of these Smart TV's too. Do people simply want to come home at the end of the day and watch a favorite show, a movie or the game, or watch one that they Tivo'ed? Do they really want to engage with their television in a more complex way?
One intriguing alternative is the announcement by Technicolor to introduce an app called M-GO, that will keep track of multiple users' viewing habits in the home and make personalized recommendations. This would be "Amazon" for your television viewing. Personalized online video advertising has shown that it can produce superior results to standard online video advertising, so personalized viewing recommendations should produce a better viewing experience for its users.
3D TV sets were going to revolutionize the in-home viewing experience. Manufacturers got all excited after millions of us saw Avatar, and thought that we wanted a chance to see programming like that in our homes. Well, they overestimated the demand, ran into a situation where the available programming wasn't that broad, and gave people sticker shock with their pricing. To date the worldwide penetration for 3D sets is about 2%. Is the Smart TV, the next 3D? Has its attraction peaked?
The advantage that Smart TV's have is that they are not dependent on the broadcast and cable networks to produce quality programming. Online video content is improving at warp speed as Hollywood, and bold face name actors, are getting in on it.
Steve Yanovsky is a Partner at Customer Focused Solutions and can be reached at email@example.com.
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