The Current State of Television

 It’s no secret that consumers are taking back control of their viewing habits, watching only the content that interests them, whenever and wherever they want. Widespread adoption of connected devices and the emergence of platforms like Netflix, Hulu, Aereo and Apple TV have only amplified this, putting pressure on the television industry to innovate. 
It's increasingly clear that consumers aren't satisfied with the status quo. With more eyeballs migrating online, new programming and viewing platforms are emerging at a rapid pace, offering consumers the flexibility to customize their television experience. Companies who recognize the role technology plays in developing solutions that simplify and enrich the consumer experience are driving these innovations. This will examine the current state of the television ecosystem and uncover the innovative technologies that are acting as catalysts for change.

The first wave of connected TVs, called "Web TVs," failed because they assumed that people would use their televisions as a computer, by browsing the Internet and reading email. Now, a new generation of Internet-enabled TVs is succeeding. These connected televisions enhance the everyday experience of watching television by offering a better viewing experience for your favorite programs and movies, as well as an alternative way to interact with music and photos.

Streaming devices currently comprise the majority of connected TVs. But we believe distribution will shift to smart TVs, as prices decrease and the television upgrade cycle shortens. Apple TV and Roku hold the largest market share for streaming devices, but Chromecast, which Google released last summer, has also achieved stellar sales numbers. Market research data shows that 8 million Apple TVs and 4.5 million Rokus shipped in 2013 in the U.S. Smart TVs will account for the majority of television shipments by 2014. By 2015, more households will have smart TV than connected TVs. On both streaming devices and smart TVs there is a division between open and closed platforms. Chromecast, LG, and Roku have embraced open platforms that allow developers a great deal of freedom to develop apps for their devices. Samsung, Apple, and others are betting on closed ecosystems, which follow a more careful curatorial approach. Despite platform fragmentation, HTML5 offers at least a faint hope for increased unification between connected TVs, just as it does on mobile. LG and Chromecast have integrated it into their connected TV development environments. How will developers and operating system operators monetize smart TV apps? Media downloads, subscriptions and to a much lesser degree — advertisements will drive the dollars. Smart TV platform operators have begun experimenting with ads. Changes to the pay TV industry, namely cable and satellite providers, will also have a huge impact on the future of connected TV. It’s now an open question as to how and how effectively cable providers will use their power to shape the future of connected TV.