John Buffone, Director of Devices at the NPD Connected Intelligence group, said that consumers who purchase Smart TVs typically only use them to watch TV instead of connecting with friends on Facebook, tweeting the latest gossip on Twitter, surfing the internet and more.
According to Buffone, the Internet-connected TV has failed to break beyond "the bounds of its TV-centric heritage". Yet the connected TV has opened to doors to alternative sources of video content like Netflix, Hulu Plus and more premium services. In fact, six out of ten consumers who own an Internet-connected TV uses these Over-the-Top (OTT) video services directly on the device.
"The decision is not for want of application choice, but rather seems to be focused on how consumers are used to interacting with their TV," he said. "The one saving grace to-date has been music services, where the location of the TV and the availability of key music streaming apps such as Pandora has driven reasonable consumer uptake (roughly 15-percent)."
Even gaming consoles, Blu-ray Disc players, and other connected devices that offer an "array" of applications are failing to resonate with the Twitter and Facebook audience. That's because there are better platforms for socializing and web browsing including tablets, smartphones and laptops, he said.
Buffone pointed out that TV manufacturers are failing to bring the platform into the next stage of its evolution despite the Internet connectivity and apps. To make things worse, connected devices like the Xbox 360 are focusing on TV and video-centric apps – Microsoft's own console will receive more than 40 additional television apps in the near future – making it difficult for Smart TV OEMS to provide a unique product.
"The challenge may be that too much choice is creating a complex user experience," he said. "There are six or more types of devices bringing the Internet to HDTVs: the TV itself, video game consoles, Blu-ray Disc players, streaming media set top boxes, TiVo, and a few audio/video receivers. While 15-percent of HDTV displays are connected directly to the Internet, that number increases to 29-percent of HDTVs screens due to these other devices."
He points out that this multi-device setup is creating an average of two connected eco-systems on the same TV screen. This is leading to a "confused user-experience" because consumers have more than one way to access their favorite TV apps. As an example, a console gamer may have both the Xbox 360 and PlayStation 3, yet may rely on the PS3 to watch Netflix because the consumer doesn't want to pay an additional monthly fee to watch the same Netflix content on the Xbox 360 (aka Netflix + Xbox Live).
"An added wrinkle comes from the nascent trend towards 'content throwing,' allowing programming to be transferred from the smartphone or tablet to the big screen," he said. "This is yet another challenge to the uniqueness of any one TV OEM’s device offering, especially as the throwing technology may also be driven by peripheral devices such as the Xbox."
To read the full report, head here.