Brand new TV models for 2014 have been filling up store shelves over the past several weeks, tempting consumers with the latest features, slimmer profiles, and increasingly elegant designs. One of the main attractions for the past few years continues to be Smart functions, and manufacturers advertise their TVs’ capabilities front and center on images and displays.
Smart functions are an obvious draw for TV shoppers primarily because they can stream most of their favorite content on demand from sources like Netflix, Amazon, Hulu, HBO Go, and others. However,
Smart TVs are facing increased competition from connected devices, such as set-top boxes and WiFi-enabled Blu-Ray players, that consumers can pair with a standard TV to add streaming media capabilities without purchasing a new television.
A look at the retail market for each product type reveals that connected device placements garner between 10% and over 100% of the number of Smart TV placements at any given retailer. However, in total numbers, placements of connected devices have decreased by nearly 30% year-over-year. Despite this decrease in overall placements, the prevalence of connected device leaders such as Roku and Apple TV still remains. One aspect contributing to the popularity of connected devices is the low price. The average net price of a connected device is $109, while the average net price of a Smart TV can range from $500 for a 40-inch model to over $2,500 for a 65-inch Smart TV. By contrast, non-Smart TVs average from $365 for the 40-inch size to around $1,200 for a 65-inch model.
At the same time that Smart TV models have been under attack from connected devices, the manufacturers have increased the advertising rate for Smart TVs compared to Non-Smart models. In September 2013, the number of Smart TV print advertisements was greater than those for Non-Smart TVs for the first time. Whether this represents a reaction to connected device competition or simply a reflection of shifting trends in the marketplace isn’t clear. What is apparent is that streaming media will remain a driving factor behind TV purchases, and the manufacturers are staying on top of challenges to their status as the dominant screen in media.