Connected TV to Saturate Western Europe by 2015

There will be 21 million connected TV displays shipped in Western Europe next year, with over 80% of TVs sold in the territory capable of supporting internet connectivity within three years, according to the latest research from analysts Futuresource. Ninety-five per cent of TV sales will be connected by 2015 when the installed base of connected TVs will reach 174 million, representing 99% of Western European households.

These figures will be encouraging to web TV platforms such as those from Samsung and Sony which have already launched in Europe and those such as Google TV and Apple TV which have yet to do so.

Nonetheless, the market for connected TV-defined by Futuresource as a TV that is capable of connecting directly to the internet and able to handle video streaming/download services-is likely to remain fragmented with many competing players over the next few years.

In the UK, 5.6 million connected TVs are likely to be installed during 2011, rising 65% to 11.6m in 2012 and to 26.7m by 2014 representing a household penetration of 103%.

Futuresource calculates the installed base (the number of connected TV displays in use) based on assumed average life of five years.

Household penetration is calculated by dividing the number of sets in use by the number of households.

Approximately 15% of the total flat panel displays in use will have IP connectivity capability, with estimates that 55% of the installed base will have this feature by 2014.

The forecasts are based on feedback provided by manufacturers indicating that more than 60% of the major brands' models range are likely to have IP connectivity next year, as vendors strive to maintain market value and create replacement demand by adding new functionalities.

While the actual consumer adoption of the technology is still relatively limited, Futuresource expect that access to free broadcast content, particularly catch-up TV in the UK, will drive consumer adoption.

YouView, the Connected TV platform expected to launch next spring says it predicts figures of 3-4m installs of its devices by 2014.

"From that perspective developers have to question how much time and money they want to invest in a platform that doesn't yet have wide penetration," says Paul Bennum, director at production company Somethin' Else. "Until a platform gains traction it's tricky for a content owner or brand to justify major spend on it."

Somethin' Else, Endemol UK, Maverick, and Mint Digital are among TV producers allocated initial development funds by YouView to brainstorm projects.

"It's playtime for ideas but it is also worth asking ‘why not just do that on the internet?'," says Bennum. "If an idea doesn't work on the internet then why would it work on a TV? Users don't care about apps; they care about compelling content."

YouView shareholder Channel 4 has set aside £2 million to finance Connected TV (not just YouView) content and assigned a new commissioner of convergent formats to manage it.

Samsung meanwhile has a £100,000 pot to attract developers to its platform.

"We want people to think beyond VOD to offering differing levels of activity around a particular show," says Russell Owens, general manager of AV Marketing at Samsung.

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