Connected TVs Will Sell, But Will They Get Used?

I'm a big fan of the digital home, even if the phrase itself has slipped from popular use lately. I cannot wait for it to happen to me -- I'll have connected displays (does the word TV even apply anymore?) throughout the house, including the ones in my pocket, in my lap, or otherwise within reach at all times. Those displays will all speak IP, the language of the Internet, and they'll all speak to each other as well, allowing me to control one display -- say, my TV -- with another one -- my Droid X, for example. There's so much product innovation yet to come in the digital home that I love my job.

I'm not the only one who sees it, of course. If you follow the excited announcements from TV makers and electronics retailers like Best Buy, the next TV we all buy will be a connected TV (defined as a TV set with its own Internet connection whether wired or wireless and some kind of software platform), a critical first step toward that future digital home nirvana.

Connected TVs are going to be a big deal; to understand why, read my latest report which includes US survey results about connected TVs along with a forecast for connected TV penetration through the middle of the decade. It just went live to Forrester clients last week. In the report, we show that thanks to the enthusiasm on the supply side, connected TVs are going to sell like proverbial hotcakes. By 2015, we forecast that more than 43 million US homes will have at least one. That's a remarkable number, especially considering that we entered 2010 with fewer than 2 million connected TV homes in the US.

But the big number masks a terrible truth that I can't hide from you: most of the connected TVs currently on the market are not sufficiently powerful to create the digital home I envision above. And in fact, some of the connected TVs currently selling at retail actually impede our progress toward the digital home of the future because they are so lackluster that more than a third of people buy them, bring them home, and then ignore the connected features of the TV altogether. Sadly, at least 14% never bother to connect them to the Internet. There is a long list of reasons why this is the case, but the most prominent is that these TVs are built with the wrong set of assumptions (and technology). TV makers have put only enough power into these TVs to keep TV prices from falling, assuming that people wouldn't pay extra for a connected TV. Seems reasonable, right? Yet at the same time, millions of people are finding from $500 to $850 to buy an iPad, a device they don't truly need. 

And so the reticence of TV product strategists to offer consumers a truly dazzling, Internet-enhanced TV experience becomes a self-fulfilling prophecy. People buy them, but only because the best TVs are all connected TVs. They don't value the connection, they don't look forward to using it (unless they are Netflix users, this is proving to be the single most valuable use of today's connected TVs), and thus a TV revolution is stillborn.

All is not lost. Google TV will be out in just a few weeks (months? no official word yet), and it will provide the first premium TV platform that makes all 4.5 hours of the typical adult's TV time more valuable, not just the 20-30 minutes you might spend with YouTube, Netflix, or a weather widget. Google TV is not the only or even the best answer (though it's a bigger deal than you think; see my analysis here); but it is a step in the right direction. The Android-based platform can be controlled remotely (via voice!) by an Android phone or tablet, it will allow for more effective finding of programs to watch, and it will gradually open the door to the kind of TV interactivity that the cable industry has talked about for years.

That's right, my future digital home is still possible. I will someday have all the things I have promised my clients (and my children) that I would have. It's just up to the product strategists to decide which of them will step up and make it happen. 

Comments

I'm more afraid they WILL get used

I already rarely visit Facebook because I just don't care that Suzy is washing her hair tonight or that such-and-such a cause is having a walk-a-thon. Now we'll start seeing "I'm watching this or that right now." Is that why Al Gore invented the internet?

Forget the connected TV - get that iPad.

Still to Prove

I trust connected TV have a future, and a big one but there is lot which needs to be proved in terms of ease of usability, content search/navigation and price point for the quality content which is not going to come for free!