In today’s digital world, one product that most Americans truly enjoy, is their Television (TV). To be honest, as a society we watch it entirely too much and we have certainly come a long way from the days of analog knobs and rabbit ear antennas. These days our televisions do much more than broadcast live shows. They can access the internet, play music and videos through applications, and access a wide range of content from different networks throughout the globe. A smart TV is defined as “an internet-connected, storage-aware computer specialized for entertainment” (What is a Smart TV?). Before considering the product market and supply and demand, one must know the evolution of television to understand its rise.
The first Television (TV) was produced by Philo Taylor Farnsworth in 1927. Twelve years later Radio Corporation of America (RCA) started producing 5 inch x 12 inch black and white tube televisions. Americans were not introduced to color TVs until the 1950s. According to Mitchell Stephens, who authored the article “The History of Television”, before 1947, only a few thousand American households had a TV and by the late 1990s, 98% of all homes in the United States (U.S.) had at least one television. Furthermore, according to “Nielsen’s National Television Household Universe Estimates, there are 119.6 million TV homes in the U.S. for the 2017-18 TV season, or 96.5 percent of American households” (Nielson Estimates, 2017).
Tube TVs began phasing out in the late 1990s with the upgrade to flat screen televisions through the introduction and rise of Liquid Crystal Display (LCD), Plasma TV, and High Definition Television (HDTV). By the turn of the 21st century, families around the country were spending their hard earned wages on new technology that offered much larger screen sizes and a superior viewing experience. By 2009, LCD TVs were being sold at sizes as large as 42 inches and they were dominating the market, their closest competitor the Plasma TV, was sold in sizes up to 103 inches, yet only accounted for just 12 percent of all sales due to their hefty price tags (Beach). One year later, Light Emitting Diode (LED) TVs were gaining steam, but at a higher cost to consumers. They did offer superior picture quality to their counterparts and they were thin unlike LCD and Plasma TVs, ranging from $950-$1400 in price (Carnoy & Katzmaier, 2010). Also, hitting the market in 2010 were three-dimensional TVs (3DTV). Panasonic and other manufacturers produced and sold 3D entertainment systems, featuring a 3DTV, Blu-ray player, and 3D glasses (Quick, 2010). The prices were in the thousands and while the market never really panned out for 3D technology, they are still sold today.
Over the next few years, manufacturers invested money into research and development of new technology that was showcased at the 2013 consumer electronics show in Las Vegas, Nevada. This new tech included: Organic LED (OLED), 4K TV, and Smart TVs with screens as large as 100 inches (Katz Maier, 2013). Prices began to drop around this time, making LCD and Plasmas much cheaper to buy, while LEDs were just scratching the market. The advancements in technology helped lower production costs, thus increasing consumer demand.
Smart TVs support Ethernet, WIFI, USB, Bluetooth technology, and different types of digital media connections to send and receive signal (What is a Smart TV?). They have increasing digital capabilities, continually update via the internet, while also allowing users to connect too many different entertainment platforms. Heading into 2014, television manufactures were predicting that Smart TVs would account for 73 percent of all TV shipments worldwide. Business Insider’s premium research service, projected that 25 million smart televisions will reside in U.S. homes, while an accelerated sales boom due to cheaper TV prices and quicker replacement costs for consumers (Hoelzel, 2014). Smart TVs are allowing consumers to lessen their cable television and satellite costs and dependence by streaming content through add-on devices that directly connect to the consumers TV. These streaming devices include: Amazon Fire stick and Fire TV, Google Chromecast, Netflix, HULU, Apple TV, television network applications, ROKU, and many more.
This is a huge sales point to consumers. “We are evolving into a culture where people watch the Internet (not just Internet-circulating videos), play sophisticated video games, transact and interact with content, services and applications – all through the TV set” (Applebaum, 2015). Gone are the days of paying for channels that you no longer require, you can now pay and download content that you choose to watch. ROKU offers more than 2,000 channels, games, and services, while Netflix is striving to become the lead in original scripted content (Applebaum, 2015). This gives consumers many options, while allowing them to add keyboard and mouse functionality to access the internet, YouTube, and many more services at their fingertips.
Smart TVs have slowly increased their market share every year since 2015. That year, they made up 55 percent of all TV shipments, in 2016, shipments increased to 57 percent, in 2017, 64 percent and as of July, 2018, smart TVs stood at 70% of all TV shipments (Kinsella, 2018). Best Buy currently sells smart TVs in sizes ranging from 24 to 100 inches, they come in many different types to include: (4K Ultra High Definition (UHD), HDTV, Full HD TV, 8K TV, LED, OLED) and can be purchased from $124.99 to $59,999.99. With such a vast selection of operating system capabilities and add-on options there is no question as to why customers are buying smart TVs. Every day there is new technology coming out that can link a smart TV with smart devices in an effort to create a digital smart home. Customers can start their cars, open garage doors, turn lights on and off, turn on appliances, check to see who is ringing their doorbell all from the comfort of their couch, through devices such as Amazon Alexa and Google Home Assistant.
Households without televisions are a thing of the past and as our society has evolved, Americans have become more digitally connected and dependent than ever before. The ever changing smart TV and home markets, high speed internet, updated technology, entertainment possibilities, and lower prices are driving customers to stores across the country in an effort to get a part of the smart pie. Smart TV technology is here to stay and it is going to consume the market for years to come.