The worldwide television market is splitting into three as the consensus around the shift from CRT displays to flat panels gives way to opportunities from emerging operating systems and targeted advertising.
“The business model is shifting away from making money on TV sets and instead to making money on ads and data that is delivered by those TV sets,” said Paul Gray, Omdia’s Research Director, Consumer Electronics and Devices, at last week’s HbbTV Symposium in London.
Gray told delegates the business was turning into one of the installed base, similar to that of pay-TV. “People are happy to sell TVs below cost, you just have to look at the finances of Vizio or Roku to see they’re selling TVs at somewhere between -3 and -7% margin, just in that scramble for users.”
Gray said this movement came at a time when pay-TV was collapsing in America leading the market to be led by ads and data. “When you see how much they pay for pay-TV, it’s not really surprising, you know that the level is four or five times per user compared to Europe. At the same time, consumers aren’t quite aware of that because they’ve got on average seven or eight subscriptions. And when you add it all up, they’re probably paying the same amount. They just don’t think they are.”
China is now posing a serious threat to the Koreans, in the same way as the Koreans did to Japanese TV manufacturers 20 years ago. However, he said that it was possible that we could return to a time when European TVs were developed in Europe, because the requirements would be so different to the United States or China, before adding that China is quick to adapt to regionalisation.
