If it was not evident before, the news that electronics manufacturer Philips was selling off its home entertainment division gave a clear signal that a large part of that sector has moved from the big screen to smaller, more portable devices (smartphones, laptops, tablets and phablets).
The number of TV sets sold declined in 2012, despite the wide availability of ever-cheaper, bigger and higher-definition screens. A Nielsen report released on May 3 shows (perhaps unsurprisingly) that traditional television viewing declined for the second consecutive year in 2012. Consumer behavior is in the midst of a big shift — and there’s no excuse for hardware makers failing to keep up.
Consumers are chasing portability and connectivity instead of image quality and larger screens. A report by Google using self-reported results shows that 16 out of 33 participants used a tablet to watch television while 17 out of 33 (48% and 52% respectively) used the device to play games. Another interesting statistic from Nielsen shows that even when viewers are in front of the television, they are not giving it their full attention. Nielsen research shows that 80% of tablet owners browse their tablet while watching television, and 78% of them browse their phone. So it’s clear there’s a disconnect: big manufacturers like Samsung and LG bet on several innovative TV screens each year while consumers have literally almost stopped paying undivided attention to those screens.
There is, mirroring that disconnect, an opportunity for device connectivity that television manufacturers are missing, in part due to innate difficulty and in part due to subpar execution. Sony has been working to produce content specifically for mobile phones and tablets. (An example is Crackle, which has movies and television shows that can play on mobile screens and online.) The results to date are so-so, meaning the content available is limited. It is not yet scalable yet either, according to Sony‘s EVP of Digital Networks Eric Berger. Apple has also attempted a breakthrough in connected TV. Since 2007, it released two versions of the Apple TV, a box that wirelessly connects Apple devices to the television. Both got lackluster reviews. But while networked TVs, phones and tablets might not happen immediately, it is important that technology companies (or at least those that don’t want to fold) to take note of the change and adapt their strategy. They could take a cue from the camera industry, which is recognizing consumer eagerness for immediate sharing and creating devices to fulfill that. Those that don’t might end up in like Philips, cashing out of the sector wholesale.