Smart TV, If Unleashed, May Mitigate Video's Woes



Is TV being displaced by tablets and smartphones as the cornerstone of CE retail?

Jim Ristow, executive VP, Home Entertainment Source (HES):

We’re at the same early-adopter stage of the connected world that we were at in ’99 with high-definition TV. This is the wave we need to ride.

That said, TV is still an important category and a huge dollar industry. Even though ASPs [average selling prices] are declining, you are really looking at a shopping cart approach. The A/V receiver business greatly outpaced projections, and the speaker industry also outpaced the industry. We have to take those other parts and really build on it. There are things there to help bring more profit potential to all of our businesses, and you can’t just look at the TV part.

Dave Workman, executive director/COO, PRO Group:

Amazon has taught the customers “everything, everywhere, all the time” when it comes to content. The library effect that the Internet has brought to the consumer is tremendous in its potential, and it plays well into the television future.

What is happening right now is the trend to multiple screens. What has changed and what will continue to change is the fact that in the future the one set in the living room is just one of many devices. People are interacting with their content with a multitude of devices. The tablet and the phone will play a part. The generation behind us will ask why someone would just sit in one place and watch a movie when it could be seen anywhere at any time. Retailers have to be cognizant and recognize this trend because it has become a multiple-screen experience.

Karen Austin, president, home electronics, Sears Holdings:

We need to educate people about the value of the connected world. A compelling reason to purchase IPTVs or smart TVs is their ability to instantly download web applications and the ability to purchase movies or music, and the connected TV will be moving from the early adopter to the early majority much faster than 3DTV, although most models will eventually have both features.

Buyers were attracted to the slim size and then the quality of the picture, but having the immediacy of being able to watch a movie instantly will be the biggest driver. Buyers understand that feature more now just because of all the other categories that are driving it.

Bernard Luthi,

IPTV, smart TV, is far and away the more prevalent buy with the

audience. They buy it because it’s new and it’s a technology that they like, and they are using it from the smart TV standpoint.

Dan Schwab, D&H Distributing:

People I know who have 3DTVs are using the product more for IPTV purposes. After the first month of showing their friends a movie with the goggles and putting them on for 2D content, their children use it for Facebook and YouTube. It’s the content that they want to get. They’re using IPTV as a big web browser, to some degree. In terms of functionality, that’s where people have gravitated.


Smartphones and tablets are more interactive, and buyers want that with the TV.

Michael Vitelli,

Best Buy:

The consumer expectation from the smartphone, the tablet and the computer is that they will be able to customize them to their individual wants. But then they get the TV and they can’t.

Currently, the TVs are blocked by the individual manufacturer’s applications. At the end of the day, that will not work. The consumer says here are my applications. I have six. They are on my phone, my tablet, my computer and my TV. Whatever I own or whatever is free, that’s what I watch it on — that is my user experience. I have created it. I don’t want 5,000 apps, I want my particular six, and they are on my four screens.

The TV industry needs to figure out how to get there outside of adding a different box. Because the TV industry has not figured that out, everybody else has been coming in saying if you attach this to your TV you could do it. The TV manufacturers have to be on some common platform, and it can’t be that I have to rebuy the app and have a different service on every TV because of different platforms. That will not fly with consumers.

What consumers are doing seems to be clear. How fast the industry is going to respond to it to allow it to happen seems to be the question. If it doesn’t, the TV business will continue to stagnate. The 30 million units are going to go out, and the ASPs are going down. We were riding a very strong curve of ASP growth with unit growth during the HDTV transition. Now it has leveled off.

The question is what is the next curve? Will 3D get me to go out and buy a new TV? Clearly not yet. Would it be a TV that allows me to have the same applications that I like to use on all of my four screens? I think so.

Ross Rubin, The NPD Group:

It’s very difficult to develop a platform.


One of the challenges that manufacturers face is their fear that their sets are relegated to being dumb terminals, and they really are resisting change. Today you have these other screens that a whole generation of users is associating with their televisions, “my” TV. We are seeing a transition in which television use was a communal experience and it is now an individual experience. You are seeing the very beginnings of a seismic change in the viewing habits of the next generation. It’s my content on my device when I want to watch it. Television vendors want to hold their own little proprietary content out of fear.


I don’t think any of the vendors could make a compelling case for the value of apps on a television other than content services like Pandora or You- Tube, which perhaps would make sense. It has no relevance on TV.


There is a lot of cool stuff like picture-on-picture — you can affix multiple images and whatever kinds of apps to larger screens. But we have to bring it to life and get it all out in front of the customer. That is the next level of growth for television sets. If you change the user experience, that is when you compel the customer to come back and chuck the old device. They are looking for an experience that they can’t have unless they get this particular set.


If the big fourth screen is opened up for application development, we’ll be thrilled with what the world develops for it. If we wait for five manufacturers to develop what they think is good for it, we won’t.


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