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Smart TVs Industry

The future of the television industry lies in re-invention, quick adaptation and always learning from those around you

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The television industry is poised for a change, but are the players ready to accept them?
The consumer electronics industry is categorized by a multitude of choices. Every day, the average consumer is surrounded by products catering to the widest audience possible or the most niche of preferences. In a market where brands are jostling for space, the television industry must constantly re-invent itself to stay relevant to the consumer. In India, the current market size for televisions is approximately 50 million households and around 40% of the total market share can be attributed to the penetration of Smart TVs.

Three years ago the total market share of Smart TVs was below 8%. The current growth for Smart TVs has reached 40%. This jump is indicative of the changing consumer preferences, marking a stark contrast between the Indian consumer three years ago and the digitally savvy Indian consumer today. A shift will be seen across India, where one will also see a rapid growth in the rural sector consumption of Smart TVs. Cities today have access to high-speed internet and it is in these areas where we see a growth of about 27% on a quarterly basis and will gradually give way to rapid growth in the 4K TVs sector.

Rapidly changing, 4K is coming
By 2024, 60% of televisions will be replaced by 4K in the US and this will be followed by India embracing a similar pattern. Picture this scenario, and you can see that the more 4K technology matures in India, the more we will see a change to 4k TV as well.  In the past two years, we have talked about smart TVs and basic smart TVs, but in the future, most brands will focus majorly on smart TV and on the content, they can provide- something that happened in smartphone sector as well.

Soon, this technology will transfer to the smart TV segment and every smart TV brand out there will focus on providing the best content to influence and gain a wider consumer base. "Content is king" will ring true, because the visual experience improves for a customer if there is more pre-loaded content available on the smart TVs, than what is being offered currently. There are maybe 5-7 applications for Smart TVs which the consumers take advantage of. 2018-2019 will be the year where technological advancement will lead to greater compatibility between the phone and your television set. Apps will be made compatible, which will naturally result in an increase in demand for smart TVs' in India.

Popular viewing channels like Netflix and Amazon Prime play a vital role as far as content for Smart TVs is concerned because some of the content is available in full HD and 4K currently is not available in DTH.

Growth in the rural sector will also impact TV viewing culture
In terms of the rural sector, there will be 46 million households who use free TV by 2020. As per a Government report, Free Dish TV can facilitate the growth in this sector to as many as 46 million households compared to the 36 million right now.

Today, the rural TV viewership contribution to the pool is about 52% and a total number of households which have television is about 183 million- expected to touch 200 million by 2020. Apart from that, look at the sales in TVs, there is a lot of improvement needed in the content based in India. As technology is growing and rapidly expanding, we need to improve our bandwidth. With increasing digitalization, the number of DTH users in India is also expected to increase to 62 million by 2021. During the last 15 years, about 19 million people have shifted from rural areas to urban areas in India which have resulted in an increase in the number of cities with over a million people, in the country. To put things in perspective, in the year 2001, there were only 25 cities which could claim they had a steady population of 1 million. Today as we stand in the year 2018, there are more than 60 cities which have a population of over 1 million. As you witness these cities teeming with people, you will see a substantial growth in smart TVs and 4K due to better connectivity and access to high-speed internet in the urban areas as compared to the rural parts of the country.

The affordable category is set to see a rise
Today, the top 4 television companies have a delta of 30-45% in price with any premium affordable brand. These affordable brands that are emerging in the market today, are providing you with the same technology at a better price. So, in future television market share of any affordable category brand will increase.

One will witness affordable brands taking over the top 5 spots in the country in the coming years. Credit due to e-commerce websites as they are largely responsible for the growth and development of the affordable, quality product line in the online retail space.

VOD (Video on demand) will play a very critical role in the coming years
 Television is still a widely used and important source of news and will remain so for many people for years to come, but if television news providers do not react to the decline in traditional television viewing and the rise of online video - in particular, on-demand, distributed, and mobile viewing - they risk irrelevance. Players must recognize the shift in the modes and content of viewing, thereby constantly re-inventing themselves as other consumer electronics have done.

VOD may become a huge threat to regular DTH. Therefore; you will see that many DTH companies have also come up with VOD subscriptions to re-capture the market share. Customers, nowadays, are highly educated and aware, with decision-making capabilities based on fact rather than hearsay. The research that goes into buying a product is reflected in them comparing SKU rather than comparing the brands.

Make in India- Know your audience
If a television of any brand wants to succeed and sustain themselves in India, then the brand should endorse and welcome with open arms, the 'Make in India' initiative.

One needs to be able to understand the Indian consumer behaviour, their preferences, their likes and dislikes. We have seen in past that many International brands have launched and imported some wonderful televisions, but the TVs and their specifications are general and do not target the Indian customers, nor keep their tastes at the top of their mind.

The strategy here is to play with the price to increase the market share captured by the brand. Post a surge in short-term sales, Indian customers start to reject the brand, because India is a diversified country and it is necessary to have local content in local languages on your TV. Many companies are still struggling because they believe that good global content is enough for India, without looking at the big picture.
The future of the television industry lies in re-invention, quick adaptation and always learning from those around you. Unless a manufacturer imbibes it all, the industry will never grow to reach the kind of connectivity and community we know it can achieve.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Avneet Singh Marwah

The author is Director and CEO of Super Plastronics - a Kodak brand licensee

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