3D, Internet Connectivity Are Not Big Drivers of TV Sales - Broadcasting & Cable

3D, Internet Connectivity Are Not Big Drivers of TV Sales

Results could impact the popularity of TV programming services seeking to capitalize on those features
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Some of the new features for TV sets
that have been heavily hyped by consumer electronics manufacturers, such as 3D
and internet connectivity, are not proving to be major motivators of new TV set
sales, according to a new study from DisplaySearch of set purchasing decisions
in 14 markets around the world.

The conclusion that 3D features or
internet connectivity are not pushing consumers to speed up their purchases of
new TVs and have not become a major drive in the decision to purchase a new set
could have an important impact on how fast 3D sets and internet connected TVs
move into the home and the success of programmers and operators who plan to
market services and content that rely on 3D or online capabilities.

The results are also disappointing
news for set manufacturers, who had hoped that Internet connectivity, 3D and
LED backlights would drive higher sales and speed up the replacement cycle,
driving people back into the market for a new set faster than they traditional
had done.

While consumers liked these new
features, the DisplaySearch Global TV Replacement Study found that the
main reasons why people decide to buy a new TV are the same ones that have been
cited for years: namely that they wanted to "have a newer, bigger and better
performing TV," the study concluded.

"Some of the findings from this
study show that newer features are not yet strong drivers of new TV purchases
compared to fundamentals like trading up in size or getting a flat panel
TV," noted Paul Gagnon, director of North America TV research at DisplaySearch
in a statement, who also stressed that more work needs to be done to educate
and convince consumers on the merits of these new features.

In the majority of countries
studied, LED was a below average driver of new TV replacements, but ranked
stronger than internet connectivity and 3D in most cases.

The internet connectivity offered by
smart TV offers users access to wide array of new content and would seem to be
a strong draw for attracting new set buyers.

But the study found that a very
confusing marketplace and lack of embedded wireless connectivity mean that most
view Internet connectivity as a nice feature to have, but certainly not a
principle reason to upgrade a TV.

Many of the countries that showed a
higher level of interest were also emerging economies, so the lack of a strong
traditional broadcast infrastructure may actually increase the relative
importance of getting video content via the internet, and therefore make an
internet-connected TV more of a motivating factor to upgrading existing sets,
the study found.

Despite all the hype around 3D last
year, the report also found that 3D capability was one of the weakest drivers
of consumer's TV set purchases. Although 3D TV shipments showed strong growth
in 2010, the study results indicate that consumers aren't looking to make a new
TV upgrade just to get 3D. Even Japanese consumers, long considered to be early
adopters, cited 3D as a relatively unimportant factor when deciding to buy a
new TV.

The study results did indicate,
however, that 3D is a more important criterion for consumers who are already
looking to purchase a new set.

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