The evolution of the modern Smart TV has begun to turn the television industry on its head, as manufacturers are beginning to sell TVs at below cost with the intention of making up the lost revenue by selling ad space and data.
BroadbandTVNews has reported on the HbbTV Symposium, which took place last week in London. At the Symposium, Paul Gray, Omdia’s Research Director, Consumer Electronics and Devices, revealed some fascinating information: TV manufacturers are no longer trying to make the most money by selling the actual TV set, as in-TV targeted advertising has become more lucrative.
“The business model is shifting away from making money on TV sets and instead to making money on ads and data that is delivered by those TV sets,” said Gray. “People are happy to sell TVs below cost, you just have to look at the finances of Vizio or Roku to see they’re selling TVs at somewhere between -3 and -7% margin, just in that scramble for users.”
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Gray offered additional insights into the current TV market, pointing out that sales data shows that consumer purchases are trending towards large TVs–up to 100 inches. Secondly, Chinese manufacturers are beginning to make significant progress challenging Korean brands, echoing the similar shakeup of 20 years ago when Korean manufacturers disrupted the market, then dominated by Japanese brands.
