TV market back in growth for the first time since 2009 and more than half of TVs sold are now smart

After five years of continuous decline, new research from Mintel reveals that the TV market has recorded growth in value for the first time since 2009. Boosted by the impact of the FIFA World Cup, Mintel expects that the UK televisions market will return to growth by the end of 2014, with sales of televisions forecast to increase by 1% in volume and 3% in value, up from £2.8 billion in 2013 to an estimated £2.9 billion in 2014. Although the market performed well during 2014, sales are forecast to decline again in 2015.

Paul Davies, Senior Leisure and Technology Analyst at Mintel, said:

“While anticipation and excitement surrounding the tournament prompted a frenzy of upgrades, particularly from men aged between 16 and 34, many of these purchases were brought forward by just a few months. Although sales of TVs are rising, 2014 is only likely to represent a temporary spurt of growth, as demand for new televisions is expected to drop further over the next five years, the continuation of a longstanding decline.”

Furthermore, 2014 is expected to be the first full year in which smart TVs will account for more than half of televisions sold in the UK market (57%, up from 39% in 2013), equating to nearly 5 million sets – up from 3.4 million the year before. Today, as many as a quarter (24%) of all UK homes have a smart TV.

2014 is expected to be the first full year in which smart TVs will account for more than half of televisions sold in the UK market

“Televisions with access to smart apps such as BBC iPlayer and Netflix are no longer commanding a premium price, as the technology has filtered down the range and is now present on the majority of sets in the market. Whilst until the start of 2013 it was a differentiator between entry-priced and mid-market televisions, this is hardly the case anymore, with 32” smart TVs available for as little as £200.” Paul comments.

While smart TVs are now commonplace, when it comes to the very latest in technology, just 4% of consumers say they already own a 4K TV. Although interest in Ultra HD TVs is fairly promising for brands, only 15% of those interested in 4K TVs say the introduction of this technology alone will make them more likely to upgrade their television in the next year.

The lack of compatible TV channels is likely to be a major stumbling block, just as it has been within the 3DTV market. Some 29% of people who are interested in 4K TVs say they will wait for a number of 4K channels to launch before buying – something that appears to be a few years away. Meanwhile 16% of this group agree that having the ability to access 4K streams through video streaming services, for example Netflix, would encourage them to upgrade to an Ultra HD 4K TV.

However there are also challenges when it comes to the delivery of 4K streams, which may restrict the reach of Ultra HD programmes for the time being.

“The challenges involving broadcast and broadband infrastructure threaten to dampen the opportunity for brands and limit the value of 4K TVs. Whilst Netflix has launched its first 4K content, the download speed required means that it is not feasible for consumers without superfast broadband to stream this reliably. What is more, 4K TV channels are not on the short-term horizon. Brands must hold their nerve and resist the urge to discount heavily in 2015, following the commoditisation of smart and 3DTVs – technologies that no longer command a significant premium. If manufacturers and retailers remain patient, it could be worth them putting up with tough market conditions for another 12-18 months, by which time 4K content is expected to become more readily available.” Paul continues.

When it comes to set ownership, more than a third (35%) of television owners have three or more TVs in their home, however, this is down from 39% in 2013. While the vast majority (98%) of TV owners have a set in their living room; some 58% have a set in the bedroom, 13% have a TV in their kitchen and 15% have at least one in a different room, for example a study or dining area. However, almost one in twenty (4%) consumers are considering reducing the number of TVs in my home and as many as 14% say they could happily live without a television in their home.

“The small TV market has undergone rapid decline in recent years and there is no doubt that the rise of online viewing has seen some consumers ditch, or at least decide against replacing, smaller secondary sets. The popularity of online streaming has seen younger consumers become detached from the television, but not necessarily out of their own choice. Many admit that watching programmes or films on secondary devices such as laptops and tablets is a compromise, and therefore their viewing is likely to return to the larger screen as more consumers acquire smart TVs, which are now becoming a commodity product in this market. Whilst the future of the main television, which is typically situated in consumers’ living rooms, faces little threat from secondary devices, the rise of tablets in particular will continue to limit demand for smaller TVs in bedrooms and kitchens.” Paul concludes.

Press review copies of the Television UK 2014  report and interviews with Senior Leisure and Technology Analyst, Paul Davies, are available on request from the press office.