April 24, 2009 - Key to understanding the pace at which Internet-enabled TVs will go mainstream is understanding the magnitude of consumer interest in the platform and the spend such a platform is likely to generate. In other words, how many are interested in this concept and how much would they spend to enjoy it?
New HDTVs may feature Internet access - thus enabling you to enjoy your favorite web video and other Internet applications on your home TV. Separate of whether you intend to buy a new HDTV or not, how much extra would you be willing to pay for this additional feature?
Yes, free would be great, but what do you think adding Internet capabilities to a TV would actually be worth? How much extra would you pay for this additional feature?
As illustrated, 39% of these consumers outright reject either (a) the idea of adding Internet capabilities to a new HDTV, or (b) the idea of paying an extra cost to have it - either way, they ain't buyin! Another 10% are uncertain about the value of this proposition, meaning about half of adult broadband users are not interested in paying any kind of additional charge to have Internet connectivity included in a new HDTV.
By implication, there remains the other half of adult broadband users who are willing to spend extra to buy a new HDTV with embedded Internet support. While this is not unimpressive given the market's nascent, one must note inconsistencies in likely additional spend. While 34% would spend between $25 and $50 extra to include Internet access, only 15% would spend between $75 and $100. In fact, only 3% of adult broadband users would spend in excess of $100 for embedded Internet connectivity.
Are we trying to "rain on the Web-enabled TV parade"? Not at all. Remember, this is indicative of adult broadband users in general, not necessarily those likely to purchase a new HDTV. In fact, TDG's research suggests that HDTV Intenders are more likely to be interested in and more likely to spend more money for TV-based web connectivity than Non-Intenders. However, the size of the HDTV Intender market was cut virtually in half between November 2008 and January 2009 (from 50% to 27% respectively) primarily due to pervasive negative economic indicators. Consumers became less likely to spend several thousand dollars on just about anything, much less a new TV. The audience for early web-enabled TVs, then, will likely be dampened by this more general trend.
More importantly, this serves to validate TDG's hypothesis that Internet connectivity by itself - when not described in terms of applications and benefits it uniquely enables - has little value to most consumers. We must remember to cast the benefits of web connectivity in terms of the applications and services that matter most to consumers. When conceived as such, consumer response (both in terms of interest and willingness to spend) is dramatically improved when compared with the data above.
Something to think about when positioning and messaging the benefits of web-enabled CE....
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