TV shipments hit a 10-year low, with the power-on rate falling to 30%. How can manufacturers break through?

Recently, Luotu Technology released the 2023 Global TV Research Report. Data showed that the global TV market brand shipments in 2023 reached 201 million units, a year-on-year decrease of 1.6%, setting a new low in the past decade.

In terms of market segments, the shipment volume of OLED TVs in 2023 will be only 5.48 million units, a year-on-year decrease of 20.6%; as the main force in the market, the shipment volume of LCD TVs will be 196 million units, a year-on-year decrease of 0.9%; in terms of TV size, the average size of global TV shipments in 2023 will reach 49.3 inches, an increase of 1.6 inches from the previous year, and the trend towards larger screens remains significant.

The TV market faces huge challenges

Undoubtedly, the current TV market is facing considerable challenges. In particular, the downward trend in the Asia-Pacific, China, Western Europe and the Middle East and Africa markets is particularly obvious, and the Chinese market is "leading" with a year-on-year decline of up to 8.4%. Behind the decline in product shipments is the decline in people's demand for TV. According to the "2024 China Smart TV Interaction New Trend Report" released by the Forward-looking Industry Research Institute, since 2016, the TV power-on rate in my country has dropped sharply from 70% to less than 30% in 2022.

In a survey of 78,000 people, nearly 50% said they had not turned on the TV for a long time, and about 20% said they did not have a TV at home. As one of the three major wedding items, a good show could attract thousands of people to watch. It is somewhat sad that TV is now so coldly received.

There are four main reasons for the decline in the TV market. One is that the TV itself lacks innovation, resulting in a decline in attractiveness. The complexity of smart TV operation is a long-standing slot. The design concept of smart TV may focus more on the richness and diversity of functions rather than the simplicity and ease of user experience, which makes it difficult for the elderly who have certain needs for TV to adapt to smart TV. In another questionnaire on the evaluation of smart TV by the elderly, more than 90% of the elderly believe that smart TV makes them feel that there is a digital divide. At the same time, the long-standing advertising and random charging problems of smart TVs have also kept many consumers away. In response to this situation, the China Internet Audiovisual Program Service Association once proposed in the "Proposal on Standardizing Smart TV Charging Behavior" to eliminate "Making Doll Charges" and "Routine Charges" and to open up channels for complaints, consultations and dispute resolution. However, except for a few brands that have launched free areas, there are still many routines for content charging.

Secondly, there are many alternative products to smart TVs, such as projectors, mobile phones, computers, and pads. According to the 2024 China Smart TV Interaction New Trend Report, as many as 86.07% of users believe that they do not need to buy a TV if they have the above-mentioned alternative devices.

The third is the mobility led by smartphones, which has led to a lot of content shifting to mobile devices. Taking the most typical Spring Festival Gala as an example, the data of the 2024 CCTV Spring Festival Gala showed that as of 24:00 on February 9, the scale of Spring Festival Gala live broadcast users was 679 million, of which the live broadcast of "Watching the Spring Festival Gala in Vertical Screen" was 420 million times, an increase of 57.58% over the same period last year. The number of live broadcast users reached 250 million, an increase of 37.97% over the same period last year. This is still the Spring Festival Gala. For other interactive content, most people experience it on smartphone devices, and smart TVs are completely incomparable.

The fourth reason is the sluggish real estate market. As a post-cycle product of real estate, smart TVs will naturally be affected.

How to break through the smart TV

When market growth hits a ceiling, manufacturers can only find their own way out, and internal competition and going overseas are the choices of most manufacturers. At present, the internal competition of domestic TVs is very serious. For example, Hisense 75E3H smart TV, with a 75-inch large screen, is equipped with 2GB of running memory and 32GB of storage space, equipped with a 4-core processor, dual 120Hz refresh rate, MEMC motion compensation, support for ultra-4K HDR picture quality, and equipped with DTS-V sound effects. Such a TV costs less than 3,000 yuan. There are many such cases in brands such as TCL and Xiaomi, among which Xiaomi is called the "internal competition king" of domestic TV prices by many consumers.

The second way is to go overseas. According to the data of the General Administration of Customs, China exported 311.33 million household appliances in October 2023, a year-on-year increase of 21.8%. Among them, 8.06 million LCD TVs were exported in October 2023, a year-on-year increase of 6.4%; the cumulative exports from January to October were 83.25 million units, a year-on-year increase of 8.3%.

So, in addition to changes in operating strategies, are there any areas for innovation in smart TVs themselves? First of all, although OTT advertising seems to be a tens-billion-dollar market, it is actually the "poison" of smart TVs. The "2023 China Household Smart Large Screen Consumption White Paper (OTT)" released by Interactive Entertainment Digital shows that on the revenue side, in 2022, the OTT advertising market size will exceed 20 billion yuan, a year-on-year increase of more than 30%. In the first half of 2023, although the growth rate slowed to 13%, the overall market size has reached 23.6 billion yuan. However, OTT advertising is the most resistant to consumers and has aroused public anger. If it continues to be promoted, it will be a waste of resources.

Second, smart TVs must be designed to be suitable for the elderly, which means that they should be more convenient to operate. Previously, the Telecommunications Terminal Industry Association and other organizations jointly issued the "Technical Requirements for Smart TV Design Suitable for the Elderly", and many color TV companies such as Skyworth, Hisense, and Xiaomi responded positively and made adjustments to related products. However, from the perspective of results, manufacturers still have not handled the problem of good coexistence between intelligence and simplicity well.

The third is the transformation of product form, such as accelerating the popularization of advanced display technologies such as OLED or Mini LED; further improving the screen size and contrast, color reproduction and viewing angle of TV; adding interactive functions such as smart control center, music center, fitness center, etc. to enhance the appeal of TV to young people; creating a vertical and customized content ecosystem to increase the stickiness between TV and consumers. In addition to these, transparent TV is also an important innovation direction, which is expected to change the form of smart TV that has been used for a long time and better integrate into the home scene.

Conclusion

The shipment volume has dropped, the power-on rate has declined, and the smart TV market has gradually reached a freezing point. If some brands still push OTT advertising for short-term benefits, the future prospects of smart TVs will be very worrying.