How will the Smart TV experience evolve in 2013?

Smart TV devices can be connected to the Internet, and, via an integrated app platform, it is possible to use TV-centric applications like Netflix, Hulu and BBC iPlayer. New apps are launched regularly to the extent that a Smart TV is almost the equivalent to a set-top box, with a focus on the on-demand functionality.

By the end of 2012, there will be more than 100 million consumers in the world who regularly use Smart TV applications, and leading TV companies like Samsung, LG, Sony, and Panasonic are rapidly adjusting their model range to include new functionalities and applications to make the experience more attractive for consumers.

The first generations of Smart TV show all the typical signs of an emerging technology, with fragmented technology, limitations in user experience but rapid innovation from all players in the market. New opportunities arise with each generation of Smart TV, and it is clear that 2013 will bring a number of new exciting features to the market.

Five trends stand out from Accedo’s point of view as the leading provider of apps.

1. Smart TV companion applications

Over the past 12 months, we’ve seen a rapid growth of Smart TV devices. The usage of tablets and mobile phones as a “second screen”, whilst watching TV has been even more amazing. Up to 70% of tablet usage is in the home, with the bulk of this usage in the living room.

Parallel usage of a second screen device, while watching TV, has exploded. This will continue, but the main change we will see in 2013 will be the connection between the mobile device and the TV. We believe that most major video services will offer the possibility of pairing your Smart TV with your mobile device to navigate and control your TV experience.

2. Full Pay TV experience on Smart TV

The technology is already there to be able to create a pay TV application on a Smart TV. When started, you will effectively turn your TV into a distribution device for pay TV, including programmes, linear channels and on-demand offerings. Internationally, pay TV companies like Viasat, Foxtel and Sky are providing Smart TV services, which can be accessed without being a normal pay TV subscriber.

From a rights perspective, it is not always possible for cable companies to offer their channels outside of their integrated set-top boxes, but we believe that we will see a number of partnerships between TV manufacturers and pay TV companies to deliver an attractive full experience to selected consumers.

3. Integrated Social TV

Most TV manufactures offer connections to major social media services like Facebook and Twitter directly from the TV. The first generat6ions of these services provide the basic functionality and allow consumers to access their favorite social network from their Smart TVs.

In 2013, we believe that Social TV will be integrated into the content experience rather than stand-alone applications. This deeper integration will allow the consumer to interact either passively or actively, either with friends or the programme format itself. It’s possible to create a fully integrated social experience both for live content like sports and talent shows and with scripted TV.

4. Niche content

In normal TV, consumers are stuck with the TV channels offered via the cable or satellite company. They offer hundreds of TV channels, packed into subscription bundles, and displayed in channel lists. Niche channels often struggle to find an audience, which is critical to their attraction to cable companies and their revenues. Via Smart TV apps, niche content providers can reach the right customers directly in an experience they fully control.

In addition, since Smart TV platforms offer global distribution opportunities, content providers can choose to distribute the content internationally to be able to reach new customers. Two examples of this from Accedo’s customers are EpicTV, a leading pan-European extreme sports channel and Neon Alley, a provider of Japanese Anime videos.

This is high-end, attractive niche content, which cannot easily find distribution via traditional broadcasting. In 2013, we will se a range of niche content providers reach new consumer groups via Smart TV.

5. Cutthroat competition in movie services

If we were to choose one winner of the Smart TV trend, it would be the movie fan. It’s difficult to imagine that only five years ago consumers were stuck with DVD rentals or what was shown on the normal TV channels, whereas we now have a plethora of attractive movie services already available on Smart TV, with more expected to launch in the next 12 months.

Of course, companies will have to compete with price and the best selection, which will ultimately benefit the consumers. Growth, which is already high, will continue to ramp up in 2013, and we will see aggressive marketing campaigns and investments in the user experience and content portfolio to capture the mass market before any competitors do the same.

The first mass market Smart TVs were introduced already in 2010, but it’s not until now that the technology has reached the maturity to provide a truly attractive consumer experience and the security and streaming quality for a full pay TV experience with interactive features both on the TV and the second screen.

Compared to mobile, we’re still in the early stages of the market development and 2013 is expected to be the first year with more than 15% penetration of active users in most markets and a move into the mass market.

Find out the future of TV apps, SDKs and APIs with the TV Hackfest, at the Moscone Center West in San Francisco on February 7-8.

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