Smart TV Trends in 2013 by Michael Lantz, CEO, Accedo

Over the past two years, the TV industry has continued to evolve at a rapid pace with the introductions of a multitude of Smart TV models from major TV manufacturers. New functionalities and applications are being launched on a regular basis, and it’s often difficult to see the major market trends among all the different messages from manufacturers and solution providers. In this article, Michael Lantz explores how the Smart TV market will continue to evolve in 2013.

Michael Lantz is the CEO of Accedo, the global leader of TV apps and app store solutions. Accedo has deployed more than 300 Smart TV apps on more than 15 platforms.

The emergence of Smart TV

Smart TV devices connected to the Internet, and accessing an integrated app platform allow consumers to use TV-centric applications to enjoy video, music and other content. New apps are launched regularly to the extent that a Smart TV is now nearly equivalent to a set-top box, but with an increasing focus on the on-demand functionality. By the end of 2012, there will be more than 100 million consumers globally who on a daily basis use Smart TV applications. Leading TV companies like Samsung, LG, Sony, and Panasonic are moving quickly to expand their model range to include new functionalities and applications that will make the viewing experience more attractive, interactive and enjoyable for everyone.

The first generations of Smart TV showed all the typical signs of an emerging technology, suffering from fragmentation and limitations in user experience, while still showing rapid innovation from all players in the market. That innovation is continuing at a rapid pace and we currently see a number of key trends for 2013, which are explored in more detail below.

Smart TV companion applications

Over the past year, we’ve seen rapid growth of Smart TV devices, both in terms of installed base and usage. The usage growth of tablets and mobile phones as a “second screen” while watching TV has been even more remarkable. Up to 70 percent of tablet usage is in the home, with the bulk of this usage occurring in the living room. Parallel usage of an interactive second screen while watching TV has also exploded. Consumers increasingly use social media, send email, browse the Internet for information about the content they’re watching or in some cases, even play games or consume other content simultaneously.

This trend will continue, but Accedo sees one major change ahead. Instead of leaving the consumer with a decoupled TV and tablet experience, it will be possible to connect your devices together to provide an integrated experience. We believe that most major video services will offer this pairing possibility between devices, which will allow for use cases where the second screen complements the TV experience rather than competing with it for attention.

Full Pay TV Experience on Smart TV

The technology already exists that can be leveraged to create a pay TV application on a Smart TV. When this application is launched, you will effectively be able to turn your Smart TV into a distribution device for pay TV, including programs, linear channels and on demand offerings. Internationally, pay TV companies like Viasat, Foxtel and Sky are currently providing Smart TV services, which can be accessed without being a normal pay-TV subscriber. The trends vary from country to country depending on market structure, content rights and strategies among the major distributors in each market, but it is clear that we will see an increased amount of pay-TV providers launching Smart TV applications. In the short term, the main driver for the pay-TV providers will be to improve subscriber loyalty, and the long term benefit will be an increased reach for a lower subscriber acquisition cost. Close partnerships between TV manufacturers and pay-TV operators will emerge in some markets to promote new offerings for mutual benefit.

Niche content players start exploring Smart TV

One of the most attractive features of Internet distribution of content is the possibility of reaching the right audience with a lower cost structure than in broadcasting. Smart TV offers the possibility of viewing this content in the living room on the big screen exactly where consumers would like to view it. This is particularly attractive for multinational providers of content, since they can reach essentially the entire world with one distribution agreement with a Smart TV manufacturer. With clever marketing strategies, this is an attractive way to reach any consumer anywhere.

Two examples of providers of niche content from Accedo’s customers are EpicTV, a leading pan-European extreme sports channel and Neon Alley, a provider of Japanese anime videos. These companies provide a selection of high quality content, which cannot easily find distribution via traditional broadcasting due to the niche target group. Smart TV devices provide an attractive way for them to conveniently reach consumers in the living room.