- The smart TV app revolution is inevitable: People spend four hours in front of their TVs in the U.S., and 63% of all global ad spending goes to TVs. The old guard, represented by cable and entertainment conglomerates, will not be able to fend off improvements like those that apps are bringing to mobile phones.
- The Smart TV revolution will not just be led by new TVs with built-in Internet connections, it will also result from consumer adoption of less expensive game consoles or set-top boxes like Roku and Apple TV, which transform traditional TVs into Smart TVs with access to app stores. At least 20% of U.S. consumers already have their TVs connected in one of these ways.
- But there are plenty of barriers to a successful TV-based app ecosystem: The existing smart TV app market is way too fragmented between a half-dozen or so immature platforms, and worse — most of these are very difficult to develop for.
- Apple and Google seem like logical smart-TV leaders — Apple through its skill of designing and marketing great platforms, and Google through its prowess in digital video and advertising. Also, pay attention to Samsung and Microsoft, among others. But consumers won't gravitate to smart TV apps until the app stores are stocked with well-curated collections of great software.
- There's a lot at stake here: TV represents the world's biggest advertising market, encompassing some $350 billion in global TV ad spending. TV is also the centerpiece of the world's most important entertainment markets, including TV, gaming, movies, and related services and infrastructure.
The app store phenomenon, centered on smartphones and tablets, has been the biggest story in software for the past five years.
Smart TV apps would represent yet another threat to the struggling pay TV industry. (See chart, right.)
The TV app market is nascent and messy, but promising, and significant growth seems inevitable. There are still some big problems [...]