While ownership of internet-connected TVs is set to double in the next year, many prospective buyers don’t fully understand what they do.
Only 20% of those who own a smart TV bought it to connect to the internet, according to research by YouGov seen exclusively by Marketing Week, making them an almost “accidental purchase”, according to Dan Brilot, media consulting director at YouGov.
He explains: “Many people whose old set was broken just happened to replace it with a smart TV, rather than specifically thinking about being able to use it to connect to the internet.”
Around 8% of the 2,000 people involved in the study have smart TVs and 7% intend to buy them in the next 12 months. Intended adoption levels are roughly similar to those for tablet computers, with 9% saying they will buy an iPad in the next year.
Only a fifth of the respondents who own a smart TV say they bought it to connect to the internet, while 49% say they bought one for the picture quality and the same percentage just wanted a more up-to-date set.
“There is nothing in the data saying that people really see the point and value of going to buy a smart TV,” says Brilot.
The results show that consumers still think of TV as a ‘lean back’ device, rather than one they want high involvement with, says Guy Hughes-Wilson, regional director Western Europe at BBC Worldwide.
“When we consume media on a laptop or tablet, it is in a ‘lean forward’, active way, like reading a newspaper. TV consumption has traditionally been passive,” he explains.
“Putting the internet’s opportunities for active engagement on to a passive engagement device, such as the TV in the corner of the living room, is a game changer.”
‘Linear’ TV – where people watch shows as they are broadcast, rather than catching up later – still dominates viewing, giving an insight into why smart TVs are not yet in huge demand, says Freeview marketing communications director Guy North.
“Despite all the new technology coming in to the market, viewing habits aren’t changing that fast. TV viewing isn’t becoming fragmented as quickly as people may have thought. The forecast we have says that by 2015, 80% of viewing will still be linear,” he says (see The Frontline, below).
However, there is a broad appetite for new devices, with 46% of those in the survey saying the idea of an internet-connected TV is a good one and 37% saying they would be encouraged to buy one if they became cheaper.
YouGov’s Brilot suggests that retailers may need to do a better job of explaining to people what smart TVs actually do and how they work.
“If you go into most retail outlets, they are not very clearly signposted. Most retailers don’t have internet connections in their showrooms so it is hard to get good demonstrations.”
This is something that David Roman, chief marketing officer and senior vice-president at PC manufacturer Lenovo, has found when working with retailers in China, which will start selling its smart TVs this month. “The section of stores selling TVs tends to be quite separate from the section selling PCs, and there are different salespeople too. So we have to build up that expertise,” he says (See The Frontline, below).
The technology behind a smart TV is the easiest part to develop, according to Roman, but it is the relationship with content providers and retailers that needs building up to make the proposition understood by the public.
Of the consumers who intend to buy a smart TV, 66% plan to use them to catch up with programmes they have missed while 37% say they will connect to the internet. So, while current smart TV owners don’t fully understand their functions – with only 20% connecting to the internet – those who want to buy them over the next year are more educated about what the devices can do.
However, those who already own smart TVs are generally more tech-savvy, with 55% browsing the internet at least once a week (on any device) and 52% watching video on demand via YouTube or Vimeo. Only 30% of those who don’t have smart TVs are watching video on demand and 45% browse the internet at least weekly.
Consumers seem to be open to the idea of interactive advertising, where they can click on an ad to buy a product. As many as 42% say this appeals, but 58% say it doesn’t.
Hughes-Wilson at BBC Worldwide is surprised that so many respondents are not keen on interactive advertising, but points out that click-to-buy must not interrupt the viewing experience.
“If someone is watching TV on a Saturday night as a shared experience, then [interactive advertising] is not very inclusive. If you are watching an ad for Persil and can click ‘add to basket’ [via a smart TV] and that doesn’t interrupt the viewing pattern, then that is fine.”
The technology brands that consumers say they intend to buy smart TVs from include Samsung (62%), Sony (48%), Panasonic (40%) and LG (32%). Additionally, 26% say they plan to buy an Apple TV, even though the manufacturer has not yet launched one.
“Some people feel that a few of the apps from manufacturers on smart TVs are quite clunky and aren’t as smooth as they are used to on other devices. In our qualitative research, people spontaneously say things like ‘I can’t wait until Apple brings out a TV because they will make a beautiful device where all these things will work’,” says YouGov’s Brilot.
While there is a clear opportunity for brands to sell internet-connected TVs, they may have to wait for consumers to catch up with them – and to make their devices work as smoothly as possible to encourage buyers to invest in the technology.
We ask marketers on the frontline whether our ‘trends’ research matches their experience on the ground
Marketing communications director
I think the number of people who intend to buy a smart TV will be greater than the 8% shown in these stats because so many more TVs will be connected to the internet. People will be buying them even if they are not quite sure that they are doing so.
This research shows that most people are using them for catch-up rather than the internet, which stacks up with what we are seeing. We think that 64% of smart TV owners are using them to catch up and very few are using the internet.
There is some way to go to educate the public about how simple these TVs are. We are making people aware of some of the things they can get with connected TVs through our advertising and website.
What is unproven is how much people will use their smart TVs to browse the internet. Linear TV viewing is continuing to prevail because it is still a ‘lean back’ experience, so people relax and watch it. It is inherent in our culture and behaviour, whereas the computer is very much ‘lean forward’ and interactive.
Chief marketing officer and senior vice-president
We previewed our smart TV model at the Consumer Electronics Show this January and are rolling it out in China this month.
The reason we can’t launch our smart TV in every country is because we had to set up the ecosystem to get the content in there. If people buy a smart TV, they expect to have all the content, so we have to work with all the content providers and distribution channels. They go through very different distribution channels than they do with PCs.
In each country, you need to build relationships with content providers. The distribution is even more complex. The section of a store that sells TVs tends to be quite separate from the section that sells PCs. There are different salespeople and pricing, so we have to build up that expertise.
We would put everything in the PC section because we think in terms of ‘PC plus’, but the retailers don’t work that way.
People buy TVs because of their perception of the brand, the experience in-store and so on. If we don’t have any semblance of a consumer brand in that country, it would be very difficult to get the retailers interested in carrying our smart TVs.
Blinkbox (the online streaming service owned by Tesco)
The statistics for ownership and intention to buy a smart TV seem to be a little low. Our view of the market is that by 2015, roughly 50% of households will have a connectable TV. To say that 8% own them now and 7% intend to buy them is a surprise.
Our focus is to be multi-device and we want to be in all the places where our customers want to be watching TV.
Our priority is for people to be able to watch movies on TV, so I think the statistic that says most people are using it for catch-up rather than to access the internet is bang in line with what we see.
It’s interesting to see where people buy their smart TVs from and this ties in with our parentage – Tesco. One of the exciting things for us with the Blinkbox and Tesco relationship is that we can provide the movie experience.
There are opportunities for the two brands to work together. For example, when people buy a new release DVD in Tesco, it comes with the digital copy at Blinkbox. That has been driving awareness of the Blinkbox brand.
Regional director Western Europe
If you were going to buy a new TV and someone said you can connect to the internet on it, why wouldn’t you?
I’m surprised that 58% of people would find interactive ads unappealing. It could work if there was an ad for an FMCG product, for example, that you could click on to add it to a basket or send yourself a reminder email.
BBC Worldwide launched international iPlayer with Apple on the iPad last year because we don’t have the infrastructure to take payments from people but Apple has. The front end of international iPlayer is free and sponsored. Users can pay a subscription to access non-sponsored content.
That is due to run for another three or four months and we’ll see how it goes. We probably haven’t yet cracked the optimal advertising model, so it will be interesting to see what the tech development guys think when we finish the experiment – whether we roll it out to Android platforms, for example.
General manager, marketing TV division
Samsung Electronics UK
This research supports Samsung’s view that smart TV adoption is increasing. Interestingly, despite lower awareness and ownership in this data, the higher intention to purchase demonstrates our strong growth in the smart TV sector in recent years.
We believe that smart TVs will continue to be the central entertainment hub, whether that is via streaming movies, watching catch-up content or speaking with friends and family via Skype.
Customer reviews and feedback go a long way to influence potential customers’ perception of Samsung and smart TVs.
There is no denying the popularity of catch-up apps such as BBC iPlayer, but there is much more to smart TV than these services. Apps such as Teletext Holidays and Rightmove allow users to search for a holiday or browse for a home directly, for example.
We see smart TV as much more of a ‘sit forward’ experience as viewers can get actively involved, so we’ve developed content allowing families to share photos and messages with each other or sync activities.
These all broaden the consumer experience and users who have this type of content on their smartphones, tablets and PCs are now also expecting to see these replicated on their TVs.