Two enthusiastic NPD Group studies published Wednesday offer upbeat – but somewhat contradictory – outlooks about what and how audiences want to watch home television. The diverse scenarios raise significant questions about bandwidth availability and over-the-top competition, both issues confronting cable operators in the diversifying digital ecosystem.
NPD DisplaySearch exudes a bullish outlook for 3D TV set sales, emphasizing that TV will “drive global demand for 3D-ready devices.” The study foresees a leap in worldwide sales of 3D display screens from 50.8 million units last year to 226 million units in 2019.
“3D TVs contribute heavily to this projection and create the largest revenue stream,” the study concludes. “Despite some industry sentiment that the 3D bubble has burst, we expect 3D to continue to grow across several categories including TVs, portable devices, and public displays,” says Jennifer Colegrove, vice president of emerging display technologies at NPD DisplaySearch. The company forecasts 3D-ready TV penetration to increase from 10% to more than 50% by 2019 worldwide, but it acknowledges that actual usage of 3D may not grow as quickly.
“Even though consumers own these 3D-ready TV devices, they haven’t viewed a significant amount of content on them,” Colegrove admits. “There is still a need for more 3D content and a smoother set-up process for 3D TV.” She points to the possibilities for “auto-stereoscopic” (no-glasses) technologies as a trigger for faster growth, but notes that, “Glasses will be necessary for many 3D applications such as TVs and monitors for many years to come due to the limitations and high price of auto-stereoscopic technologies for large displays.”
While such optimism (however muted) warms the hearts of TV set makers, NPD’s other study this week offers a more immediate challenge to viewing as we know it – with a greater impact on operators and programmers.
Another NPD division reports this week that TV monitors have suddenly become the “primary screen for home viewing of online video,” eclipsing the computer as the screen of preference for watching paid or free stream video from the Web. Today, 45% of viewers watch such videos on a TV screen, compared to 33% a year ago. In the 2011 study, 48% of viewers watched such over-the-top videos on a laptop or desktop, but now only 31% do so.
“This shift not only reflects a strong consumer preference for watching TV and movies on big screen TVs, but also coincides with the rapid adoption of Internet-connectible TVs,” says NPD. Its study found that the boom in ‘’net-connected TV sets means that “consumers no longer [use] peripheral devices, such as streaming media players, video game consoles, and Blu-ray Disc players, to access streaming video on the TV. This decline in usage could impact the usage models and utility of peripheral devices.” That’s not such great news for electronics makers.
It also means that viewers are spending their valuable viewing time watching content that is not necessarily revenue-producing for cable subscription services.
"The growth in connected TVs is another sign that online video is maturing,” explains Russ Crupnick, senior vice president of industry analysis for The NPD Group. “Streaming video has moved from the dorm room to the living room; and, as more households obtain and connect TVs to the Web, we predict increased trial and engagement for video distribution services.”
On one level the two NPD studies may seem to support each other – since almost all new 3D TV sets/monitors also include an Internet access port. Hence, there will be widespread enablement and access.
But the unanswered question remains: will viewers – providers – opt for the 3D content if and when it becomes widely available? Of course, there’s the option that bandwidth-thirsty 3D content will flow through the broadband pipelines.
More significant, though, is the rapid current growth of online video viewing via the TV set. While such viewing may include TV Everywhere or other cable-controlled content, the growing likelihood is that audiences are keeping their cords to watch content that is not necessarily generating revenue for network providers. Perhaps the most hopeful element of the NPD online viewing study is that 22% of viewers say they do not view online video via any device – neither TV set, laptop/desktop computer, tablet nor netbook.
Let’s see how long that figure stays small in the big-screen era.