When Smart TVs were first introduced in 2010, many in the industry envisioned that they would be the future of television, providing consumers with a one-stop shop for television programming and Internet-based content, such as apps. However, the initial excitement about Smart TVs quickly cooled off. In fact, according to a recent report from market researcher NDP Group, more than 40 percent of U.S. households with Internet-enabled TVs haven’t even hooked them up to the Web.
Why are Smart TVs so underutilized by consumers? The main reason is that viewers primarily look at the TV as a means of watching video content. Furthermore, most viewers prefer using a second-screen device when connecting to the Internet and using apps. About 44 percent of Americans utilize another device while watching television, according to NATPE and the Consumer Electronics Association, so when it comes to browsing Facebook and Twitter, we know that consumers prefer second-screen devices such as smartphones and tablets.
So why are consumers turning to second-screen devices over the Smart TV? The problem is that Smart TVs aren’t really that “smart” after all. In fact, most if not all of the capabilities that define a Smart TV, such as access to the Internet and apps, are generally available via traditional cable and satellite services or on other devices that offer a more interactive and Web-centric experience.
Therefore, another important question facing the industry is: What is the best way for pay-TV operators to bring advanced features and capabilities to the TV screen in order to provide consumers with the ultimate viewing experience? Let’s look at the top three reasons why Smart STBs are a better option for pay-TV operators over Smart TVs.
With Smart TVs, Customization Isn’t Possible
A major drawback of Smart TVs is that they can’t be customized by pay-TV operators. There is a separate user interface for the application hub compared with the regular TV channel line-up. This limits the operator to only installing a separate application along with the other installed TV apps.
On the other hand, when there is a Smart STB involved, the TV can be fully customized by the operator. Being able to customize your pay-TV offering is obviously a great asset, because today’s consumers want personalized content! A recent survey by Ericsson revealed that 30 percent of consumers would like to receive tailored TV and video service offerings, as well as receive personalized content recommendations based on personal information.
Hardware Can’t Keep Up With Technology Advancements
Smart TV hardware needs to be relevant for many years after it’s been purchased, but the digital world is advancing at a much faster pace than the rate that consumers replace their TVs. According to NPD DisplaySearch, consumers only replace their TVs about every seven years.
What does this mean? The Smart TV a consumer purchases today won’t be powerful enough to support tomorrow’s requirements. Let’s say, for example that the pay-TV operator wants to use a new compression technology such as HEVC. It would have to rely on the TV hardware support. With Smart STBs, if the hardware is not sufficient, the operator can upgrade it. They do not have to wait for consumers to upgrade their hardware in order to deliver an enhanced TV experience.
Fragmentation of Smart TV Operating Systems
Finding where to buy your smart TV is definitely not an issue. There are plenty of Smart TV vendors; however, each with its own operating system (OS). Sometimes there are even different OS for Smart TV models from the same company, which makes it very challenging for pay-TV operators, as they need to adapt their apps to the requirements of each OS separately and this in turn stifles app development.
With Smart STBs, there is no fragmentation issue since there are limited STB models that the pay-TV operator needs to support. Furthermore, because many versions of Smart TV are released each year, pay-TV operators will need to continuously verify that their app is working on all these models. This can be a rather expensive and time-consuming task. With a Smart STB, on the other hand, there is no such problem because there are far fewer number of models available.
The Big Picture
On the flip side, there are still advantages for smart TVs that cannot be ignored.
Smart TVs offer a faster deployment time for new customers, and there is no need for a technician to come to the house when a customer buys a Smart TV, compared with when a new Smart STB is installed.
However, overall, when looking at the big picture, it is clear that Smart STBs are more beneficial for pay-TV operators than Smart TVs. Today’s operators can easily increase customer satisfaction and lower operating costs by deploying Smart STBs that open up new levels of personalization, interactivity, and social capabilities across all screens.