Smart TVs connect to the internet and, through built‑in app platforms, deliver TV-centric services such as Netflix, Hulu and BBC iPlayer. With new apps appearing regularly, a Smart TV increasingly resembles a set‑top box focused on on‑demand viewing and a richer entertainment experience.
By the end of 2012, more than 100 million people worldwide were regularly using Smart TV applications. Major manufacturers like Samsung, LG, Sony and Panasonic have been rapidly expanding their product lines to include new features and apps that make Smart TV use more appealing to consumers.
Early generations of Smart TV display the typical traits of an emerging technology: fragmented standards, uneven user experiences and fast innovation from many industry players. Each new generation brings fresh opportunities, and the market is set to introduce several compelling features as it matures.
From Accedo’s perspective as a leading app provider, five trends stand out as driving the next phase of Smart TV evolution.
1. Companion apps for Smart TV
Tablet and smartphone use as “second screens” while watching television has grown dramatically. Studies show as much as 70% of tablet use happens at home, often in the living room. Parallel use of a mobile or tablet device during TV viewing has exploded, and the next step is stronger integration between these devices and the TV.
In 2013, we expect most major video services to support pairing between the Smart TV and a mobile device, enabling the phone or tablet to navigate, control and enhance the TV experience. Companion apps will let users discover content, control playback and interact with what’s on screen in a seamless way.
2. Full pay TV on Smart TV
The technology already exists to deliver a full pay TV experience through Smart TV apps. When enabled, these apps turn a TV into a distribution device for premium content: live channels, scheduled programming and on‑demand libraries. International pay TV operators such as Viasat, Foxtel and Sky have begun offering Smart TV services that can be accessed without the traditional set‑top box.
Licensing and distribution rights can complicate offering cable channels outside proprietary hardware, but we expect partnerships between TV manufacturers and pay TV providers to expand so some consumers can enjoy a complete pay TV experience directly on their Smart TV.
3. Integrated Social TV
Most TV manufacturers already provide access to major social networks like Facebook and Twitter from the TV. Early implementations offered basic standalone features, but the next wave is deeper integration of social elements into the viewing experience.
Social TV in 2013 will be embedded within content rather than isolated in separate apps. This will allow passive or active interaction with friends and with programming formats themselves—enabling integrated social features for live events like sports and talent shows, as well as for scripted series.
4. Niche and specialty content
Traditional broadcast and pay TV lineups bundle hundreds of channels, which can make it hard for niche providers to reach the right audience. Smart TV apps let specialty content creators reach target viewers directly and control the presentation and user experience.
Because many Smart TV platforms support global distribution, niche channels can expand internationally and build audiences beyond their local markets. Examples include EpicTV, a pan‑European extreme sports channel, and Neon Alley, a provider of Japanese anime. These kinds of high‑quality niche offerings often struggle on traditional platforms but can thrive on Smart TV app stores. Expect more niche providers to reach new viewers via Smart TV in the coming year.
5. Intensified competition among movie services
Movie fans have arguably benefited most from the Smart TV shift. Only a few years ago, viewers relied on DVD rentals or whatever airing on traditional channels. Now a wide range of movie services are available on Smart TVs, and more are likely to launch.
Price, catalog depth and user experience will be key competitive battlegrounds, which should benefit consumers. Growth in movie streaming is already strong and expected to accelerate, with aggressive marketing, investments in user interfaces and expanded content libraries as providers race to capture mass markets.
Although the first mass‑market Smart TVs appeared around 2010, only recently has the technology matured enough to offer a consistently attractive consumer experience, robust security and streaming quality suitable for a complete pay TV offering along with interactive second‑screen features.
Compared with mobile platforms, Smart TV remains in an early phase of market development. In 2013 we anticipated that active user penetration would exceed 15% in many markets as Smart TV moved further into the mainstream.
Discover more about the future of TV apps, SDKs and APIs at TV Hackfest, held at Moscone Center West in San Francisco on February 7–8.