nScreenMedia OTT multiscreen media analysis

The battle for the TV home page

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There are a lot of companies that want to own the consumer’s connected TV home page. Who’s winning the battle, and is an outright winner possible?

The connected TV is mainstream

Over half of the U.S. population, or 168 million of 326 million, will use a connected television in 2017. They will use a variety of devices to watch online video on the big screen including smart TVs, pay TV set-top boxes, streaming media players, and game consoles. Each of these devices has their own TV home page which the manufacturer hopes will be the go-to place for viewing for customers. They will also use a smorgasbord of applications, some which also want to be the TV home page for their users.

Which devices are winning in the battle to establish themselves as the TV home page? What are their chief advantages and disadvantages in the race to win and keep user attention? Could any of them emerge as the outright winner?

The smart television

Penetration: 28 million US Homes Internet usage rate: 63%

The main advantage smart TVs have in the race to establish their TV home page as default for device owners is the simplest. When an owner turns the TV on the home page can be the first thing the consumers see. An increasing number of televisions, when turned on, go directly to this home screen, not to the last TV channel the owner was watching.

There are two big disadvantages CE manufacturers face in establishing their TV home page as the default for customers. They are not good at forging and maintaining all the relationships with content providers they need to make sure all the apps consumers might want are available. Some realize this and are outsourcing the portal to platforms like Roku and Android TV.

The second problem is smart TVs can’t keep up with the ever-increasing demands of the apps that run on them. Consumers are just not willing to upgrade their TV to get the latest apps and features.

The pay TV set-top box

Penetration: 97.5 million US Homes Internet usage rate: 5%^

In most US homes, the pay TV set-top box is the first-place viewers turn to when they want to watch television. This gives operators a huge advantage since they jointly own the TV experience in 82% of US homes.

However, most operators are not leveraging such a huge advantage. The TV home page is just a traditional guide and it integrates few if any online video services. Though many operator set-top boxes are connected, they are not connected to the Internet. The operator typically must integrate an online service on the set-top box. Comcast, for example, has integrated Netflix on the X1 set-top box and is adding YouTube, but progress is pitifully slow. For most operators, the pay TV guide isn’t really a TV home page at all. It is just a guide to the operator’s pay TV service.

The streaming media player

Penetration: 38 million US Homes Internet usage rate: 73%

The streaming media player (SMP) is the cheapest way to watch Internet video on a television. Amazon, Roku, and Google all have devices that cost less than $40 and each has a huge array of content available through them.  This is by far their biggest advantage. Consumers are comfortable spending $40 every year or so to keep pace with the newest apps.

The need to change television input is a big disadvantage if the SMP is not the primary TV device. This is true in many pay TV households. As well, Apple, Google, and Amazon SMPs are not perceived as neutral. In other words, the SMPs favor the device maker’s services. This could be why Roku has the most number of apps (channels) available. It does not have any video services that are competitive with content providers delivering on the box.

Game consoles

Penetration: 42% US Homes Video usage rate: 50% of game console owners

The biggest advantage game consoles have when it comes to establishing their TV home page is incumbency. The devices have been in 40% or more of US homes for a decade and are used frequently by their owners. However, only 50% of console users watch movies on the devices.

Between 2006 and 2010, Sony and Microsoft were in a pitch battle to establish their consoles as general entertainment devices. However, neither company was successful in getting non-gamers to embrace the platforms and the ecosystems. This has remained the Achilles heel of the devices when it comes to establishing their TV home portal outside of the gamer community.

Can there be an outright winner for the TV home page?

If any device can become universally used as the TV home page it is the streaming media player. In the short-term, its cheapness and the depth of content catalog make it the easy choice for consumers. That said, it’s unclear if one of Roku, Fire TV, Chromecast, or Apple TV will eventually emerge as the overall category winner.

In the long run, smart TVs should prevail. However, before that can happen the technical and user experience requirements for putting Internet video on television need to be standardized. And standardization could take a very long time.

About the data

Data for this piece was drawn from several sources, and multiple reports and forecasts. Unless otherwise noted, the data came from Nielsen, comScore, eMarketer, and TiVo data sources.

^ A few US operators have deployed open, or partly open, set-top boxes. Most boxes can deliver IP video, but access is controlled by the pay TV operator.


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