How TV OEMs Got Smart by Watching the Mobile Industry

tv
At CES 2010, the entire TV industry seemed to think 3-D’s time had come. After all, Avatar‘s record-breaking run was still unfolding and theatergoers were donning 3-D glasses in droves, and to the industry, there seemed no better time to push the technology into the home.

Too bad consumers didn’t see it this way. Shipments disappointed, and many consumers became convinced  they’d never want to watch 3-D in their homes.

The biggest blame is with the CE industry, which did a lousy job of educating consumers about the simple fact that 3-D-capable doesn’t mean always-on 3-D, and that’s an important distinction lost on most consumers, since no one — well almost no one — wants to watch 3-D all the time.

The industry knew it had to look elsewhere as the clock ticked on rising HD market saturation. Fortunately, the groundwork for a new model for hardware had been laid by the mobile handset brethren, and now many in the TV industry have seen the light.

If you have any doubt that big-time TV OEMs are taking cues from the smartphone market, see these words from BK Yoon, President of Samsung Displays, in this article from Silicon Republic:

“If you think about the traditional telephone and the smartphones we all have today, I believe that TV will see as dramatic a reinvention as the telephone. In 2011, we just watch TV that was prescribed, but TV is changing fast and people will choose to watch what’s relevant to them. TV’s reinvention has already begun.”

So what did Yoon and others learn from the handset market? It’s simple: By adding additional processing, connectivity and software platforms for development of applications, you can fundamentally shift a market’s entire business model. Previous to what Apple did with the iPhone, the carriers largely called all the shots in the mobile market. Today, I’d say Google and Apple are almost on equal footing.

Looking at the TV market, Samsung gets this and is already negotiating direct deals with content providers to put paid content on their smart TVs. And there are others are asking for application and content service revenue splits, and are no doubt also looking at advertising revenues.

Being a smart TV OEM is a long way from just shipping boxes, whether they’re 3-D or not.

If you’d like more analysis on how smart TV’s fundamentally shift the business model in the TV market, see my weekly update at GigaOM Pro (subscription required).

Image source: flickr user ETC@USC

Related Content From GigaOM Pro

 

loading

Comments have been disabled for this post