The TV market has entered a new phase, with manufacturers now willing to sell TVs at a loss in order to profit from ads and data collection.
The shift was highlighted by market research firm Omdia.
- "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 for CE, during last week's HbbTV Symposium in London.
Two American TV brands were used as examples, according to BroadbandTVNews.
- "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," said Paul Gray.
Last year, newcomer Telly launched a 55-inch 4K TV that is free for Americans, provided they agree to watch ads.
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Roku, which operates in the US and parts of Europe, is highlighted as an example. Photo: Roku
Could lead to market segmentation
The trend is currently observed in North America, where viewers are used to seeing more ads on TV channels. The shift comes at a time when the traditional TV ecosystem – TV channels – is collapsing in favor of streaming.
According to Paul Gray, viewers in China, Europe and other regions have different expectations, which could potentially push TV makers to tailor their strategies for new TVs for each region, as shown in the photo below.
Paul Gray from Omdia discusses the global TV market. Photo: BroadbandTVNews
Two other trends
Gray also pointed out that consumers are increasingly purchasing very large TVs up to 100 inches, a trend reflected in sales data.
A third trend is that Chinese brands such as Hisense and TCL are making significant inroads in challenging South Korean giants like LG and Samsung, who two decades ago outmanoeuvred Japanese manufacturers.
- Source: BroadbandTVNews
