Why you’ll buy a new TV in the next 5 years

tv trash

A few weeks ago, I wrote a post entitled “The incredible shrinking TV replacement cycle,” which used some data to illustrate how TV buyers have started bucking the longtime trend of upgrading their TV screens every seven to eight years, and theorized that TV purchasing will continue to accelerate over time. After seeing the best that CE manufacturers had in store at CES, I’m even more convinced. But not for the reasons you might think.

Where we are now

The combination of low price, increased functionality and the HD upgrade cycle have spurred consumers to adopt HDTVs en masse. According to recent research from Leichtman Research Group, about 70 percent of Americans now have at least one HDTV — up from 17 percent five years ago. Moreover, a number of those consumers already have multiple HDTVs, with about half of all HDTV households owning two or more.

I personally think that’s a trend set to continue, but not everyone agreed. In fact, I received a fair amount of criticism in the comments on the original post, as well as on Twitter and on other sites. (Check out Alexis Madrigal’s “The New Laws of TV Upgrading” for a pretty complete counter to that original post.)

The key argument against seems to go like this: Consumers bought a bunch of HDTVs over the past five years to take advantage of a noticeable difference between SD and HD feeds of their favorite content. But now that they’ve got the right-sized pane of glass for their living rooms capable of displaying HD video, there’s little reason for them to go out and buy a new TV. In other words, the HD revolution is nearly over.

The dumb smart TVs of CES

The counter-argument is that there will soon be a new revolution of smart TVs to pick up after the HDTV craze has worn off. And after attending the Consumer Electronics Show last week and seeing all the hot new HDTVs, 3-D TVs and Smart TVs available, I’m even more convinced consumers will soon be buying new TVs in increasingly shorter periods of time. But it’s not because I believe this year’s TVs are such a huge step above last year’s TVs that consumers will want to run out and get them.

In fact, just the opposite is true. This was illustrated in a dinner I was having with a few other journalists and executives Wednesday night when one of them asked what TV I would buy, of everything I saw on the show floor and in demos. The answer was easy. “None of them,” I said.

The reason is this: there are better things to come. There’s a huge opportunity for real innovation on the TV that’s gone completely untapped. But I have a feeling that’s going to change, and that change is going to come sooner than most think. Until it does, I’m sitting on the sidelines.

Where are the killer apps?

The killer app for most smart TVs today is Netflix. Pretty soon, pay TV operators like Comcast and Time Warner Cable and Verizon will make their services available as well. And HBO has some pretty ambitious plans to bring its authenticated on-demand service to connected devices.

But in each case, what we’re really talking about is making more TV available on your smart TV, but delivering it over the Internet. Think about that for a second: The main reason for most consumers to buy a smart TV today is to gain access to more of the same stuff that they already watch through cable.

And that gets to the heart of why I believe we’re on the cusp of another huge upgrade cycle. Today’s TVs are not much smarter than they were a year ago, or even two or three years ago. And that’s why everyone who already bought a shiny new HDTV set or even a first-generation “smart” TV will soon be in the market for a TV with some actual smarts built-in.

Real innovation is yet to come

Think about all the things that you could do with a truly smart TV that haven’t been enabled yet:

  • HDTVs with cameras built-in could enable viewers to video chat with friends while watching a TV show together on the big screen. You know, real social viewing.
  • Smart TVs could provide personalization of content and easier discovery of your favorite shows. As creepy as it may seem, facial recognition — like that enabled by Microsoft Kinect and shown off by Samsung at CES — could finally break down household usage and target TV programming based on who’s watching the box at any given time.
  • Sports broadcasters could overlay real-time stats on a sidebar that runs alongside a football matchup, or provide a synchronized experience with a second-screen tablet or mobile app. Viewers could get fantasy updates or manage their teams in real-time from those apps.
  • Networks could provide additional features — director commentary, behind-the-scenes footage, additional information about actors and scenes, etc. — into apps and make them available on TVs and other screens. (I’m thinking of extending HBO Go’s Game of Thrones interactive features, which had only been available when streaming in the web browser, and bringing them directly to the TV.)
  • TV apps could provide real-time polling for competitive reality shows, replacing text messaging and Twitter counts. How many Google TVs do you think would sell if you could vote for your favorite American Idol directly from an app while watching the show live?
  • For the enterprise, connected TV apps could provide new levels of collaboration and video conferencing tools, without the need to hook into expensive proprietary systems.

Of course, there are a number of technology companies looking to enable these types of features, but very few implementations have actually come to market, and none of them are mainstream. The important thing here is that the software is becoming more capable and powerful much more quickly than the hardware is changing. That means that the next wave of TV buying won’t be driven by screen resolution, refresh rate, screen size or the like, but by the power of the apps available on the TV platform.

Looking to mobile for clues

It wasn’t too long ago that the killer app on mobile handsets was email. A user might have upgraded when his two-year contract was up to get a phone with a camera, or maybe not. Mobile web was a joke.

And then the iPhone came along and people realized the opportunity that was available through an open apps ecosystem that allowed developers to create new experiences that were previously unheard of on the TV.

Anyone who’s looked at connected TVs today and decided that there’ll be no reason to upgrade in three years hasn’t considered the possibility of future apps or what sort of change is in store. The next generation of connected TVs won’t just be panes of glass that you watch Netflix on. They’ll be smart devices will full-on interactive components that will fundamentally change the way we engage with TV programming and with each other. And when that happens over the next few years, CE makers will be giving consumers a real reason to buy another new TV.

Photo courtesy of Flickr user Sugar Pond.

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