Smart televisions (TVs), also known as connected TVs, are televisions integrated with internet connectivity that comes with a variety of features, including on-demand content from different applications, access to streaming services, and the ability to connect to other wireless devices.
Smart TVs can also receive cable, satellite, or over-the-air (OTA) transmission. In addition, smart TVs are integrated with extra hardware and connections, along with an operating system and a graphical user interface (GUI). These systems and functions enable viewers to access and control features of the connected devices and streaming content from internet video services. As a result of rapid urbanization, rising income levels, and the widespread availability of high-speed internet, consumer spending on online video streaming channels, such as YouTube Premium, Netflix, Hulu, Vimeo, and Amazon Prime Video has increased over the years.
The global smart TV market reached a value of USD$202.1 billion in 2020. Expert Market Research projected smart TV market growth at a CAGR of 10.2% between 2021 and 2026, estimating it to reach approximately USD$319 billion by 2026.
Significant drivers of the smart TV industry include:
- Rising disposable incomes
- Increasing population
- Growing penetration of high-speed internet
- Decreasing prices of smart TVs
- General technological development
- Increasing popularity of 4K resolution televisions
The smart TV market can be broadly categorized based on resolution type, screen size, screen type, technology, platform, distributional channel, application, and region. The distributional channels of the smart TV market can be grouped into offline and online, and the screen types can either be flat or curved. The smart TV market finds application mainly in the residential and commercial sectors. The resolution type in the market can be divided into:
- HD TV
- Full HD TV
- 4K UHD TV
- 8K TV
The screen size in the industry can be segmented into:
- Less than 32 Inches
- 32 to 45 Inches
- 46 to 55 Inches
- 56 to 65 Inches
- More than 65 Inches
The smart TV market can be divided based on screen technology into:
- LCD (Liquid Crystal Display)
- LED (Light Emitting Diode)
- OLED (Organic Light Emitting Diode)
- QLED (Quantum Dot Light Emitting Diode)
The smart TV market can also be segmented based on the platform into:
- Tizen OS
According to research firm Research And Markets, the taxation of smart TVs is a key inhibitor of the market's growth. Television is the only group in which two Goods and Services Tax (GST) levels apply. Television sales of up to 32 inches are falling, accounting for 55% of overall sales in 2019 compared to 75% in 2017. In India, smart TVs are classified under the highest tax category of the Goods and Services Tax, with customers paying 28% over retail price.
Television services involve the provision of entertainment and informational materials, including films, music, videos, newscasts, and more, which are broadcasted by TV services providers. The television industry is expected to transition from traditional broadcasting to broadband broadcasting.
An increase in internet users and acceptance of IoT are significant factors influencing the growth of the global television services market. In addition, new products enabled by technological advancements in TVs, such as 4K TV, HDTV, and IPTV, further reinforce the demand for television services.
According to Grand View Research, the global broadcasting and cable TV market size was valued at USD$305.30 billion in 2019 and is expected to grow at a CAGR of 3.4% from 2020 to 2027. Another research firm, Research and Markets, arrived at a valuation of $332.60 billion in 2019 and estimated the television services market to reach $499.80 billion by 2027, following growth at a CAGR of 5.4% from 2021 to 2027. Service providers aim to capture greater market share by integrating Over-The-Top (OTT) media services to offer bundled packages with diverse products to customers.
The TV services market may be divided into the following categories: digital terrestrial broadcast, satellite broadcast, cable television broadcasting, internet protocol television (IPTV), and over-the-top television (OTT). By revenue model, it can be segregated into subscription and advertisement; according to the broadcaster type, it can be segmented into public and commercial types.
Research And Markets stipulates that the rising popularity of VOD is a key factor driving the growth of the smart TV market. Video on Demand (VOD) is one of the features enabled by Internet Protocol TV (IPTV), where the video is transmitted via the Real-Time Streaming Protocol. The increasing popularity of VOD has led to an increase in the adoption of smart TVs. In 2019, 53% of users spent more than $11 a month on streaming services, compared to 43% in 2018.
The segment growth is partly attributed to the high functionality provided by IPTV over traditional cable TV, which enables, for instance, the distribution of live or prerecorded shows over pre-established networks. The feature of screen sharing TV content with portable devices, such as tablets and mobile phones, is another factor significantly contributing to the revenue streams.
Strict government regulations and laws against piracy facilitate the distribution of authentic content, contributing to market growth. Government initiatives in developing and developed countries regarding the digitization of internet services and broadcasting technology are expected to increase the demand for such services.
Grand View Research claims that the advertising segment dominated the market in 2019, with a share of 76.39%, which can be attributed to high penetration of cable TV and satellite TV networks in rural households and growing need among marketers to expand their customer base. The availability of network inventory and flexible purchase options have further enabled advertisers and agencies to effectively allocate budgets and gain screen time, resulting in significant market growth.
Digital illiteracy and lack of digital infrastructures such as digital communication, computing or data storage, Wi-Fi network, applications, and software may limit the growth of the television services market.
Designated Market Areas (DMAs), are geographical areas where Nielsen measures media consumption, ranked by local television homes. DMAs include urban centers, suburbs, and nearby counties (also known as trade areas) where small towns and rural homes receive the same television signals. There are 210 DMAs in the United States. New York City is the largest DMA, and Glendive, MT is the smallest DMA.
Nielsen uses proprietary electronic measuring devices to measure what programs, networks, and stations are being watched on all TVs and digital devices in homes. Radio listening is also measured via similar devices as well as diary entries. The company gathers data by selecting people and families and inviting them to participate in the research. The Nielsen panel members and “families” signify a cross-section of each market’s demographics, including ages, races, ethnicities, and behaviors. Nielsen’s selection process includes:
- A county within the DMA
- A group of block areas within that county
- Homes within the block/geographical area
Nielsen’s equipment detects audio codes to record the content that reaches each TV and device in the home. Depending on the market, Nielsen measures live content and on-demand, DVR, and streaming services. The company's customized, proprietary software uses statistics and science to generate ratings. In turn, these market-level viewing preferences allow PR firms and advertising agencies to make informed marketing decisions.
Nielsen DMA rankings
According to the Nielsen DMA Ranks 2021, the top five markets in the United States were:
- New York, with 7,452,620 TV homes, representing 6.162% of the US.
- Los Angeles, with 5,735,230 TV homes, representing 4.742% of the US.
- Chicago, with 3,471,560 TV homes, representing 2.870% of the US.
- Philadelphia, with 2,997,360 TV homes, representing 2.478% of the US.
- Dallas-Ft. Worth, with 2,962,520 TV homes, representing 2.444% of the US.