Consumer Electronics Show

TV manufacturers search for the next big thing

Show attendees check out the new Samsung 2016 SUHD TVs, which feature Quantum dot display and bezel-less curved design, at CES 2016 at the Las Vegas Convention Center on Jan. 6, 2016, in Las Vegas.
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CES has historically been the launching pad for notable advances in the television industry. The show, after all, wouldn't be the same without the 100+-inch demo units showing sizzle reels on a constant loop.

But several touted breakthroughs, which manufacturers expected would lure consumers in recent years (such as 3-D sets), haven't successfully done so. At CES 2016, 4K and UHD (ultra high definition — another way of saying 4K) sets are very much front and center, but there's also a lot of talk about HDR — high dynamic range — sets.

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The technology improves the contrast and colors of images, and Samsung, LG and other large TV companies are betting big on it. But is this just another false start for early adopters or could it potentially catch the interest of a broader audience?

Analysts say HDR could actually have an impact, for a number of reasons. Consumers traditionally buy new TVs with three factors in mind — size, price and picture quality. And HDR does, in fact, make pictures pop off the screen more.

"HDR … certainly [has] the potential to offer a real step change in the TV-viewing experience akin to going from black and white to color," says David Watkins of Strategy Analytics. "However, the technology is complex and the industry faces the challenge of promoting and explaining the benefits of the technology to consumers. If they can do this and retailers can offer compelling in-store demonstrations, then we see no reason why HDR cannot give a kick-start to the UHD TV market over the next couple of years."

Perhaps just as importantly, a large number of people now have HD set that are 6 to 7 years old, says Watkins, meaning we're entering an upgrade cycle for TVs.

That's working in 4K/UHD's favor right now, as adoption is on the rise, thanks in part to plummeting prices (a 4K set costs the same as a traditional HD one now). But it could make HDR more successful as well.

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And that, in turn, could work well for content producers — but only if the installed base grows at a decent pace.

"From the content side, it is far easier for content producers to create HDR-enabled content than to create 4K content," says Brett Sappington, director of research at Parks Associates. "HDR doesn't require special cameras and it can be added in post-processing. That said, content producers have little incentive to create HDR content since consumers don't yet have HDR sets. Once sets start selling, content production can begin much more quickly than for 3-D or 4K."

At the same time, adds Watkins, over-the-top services like Netflix and YouTube are helping drive people to 4K and HDR content, which networks will eventually have to emulate.

While they search for the next big thing, one argument television manufacturers must confront is whether there's a future for big-screen TVs, given the growing preference of millennials to watch programming on their PC or tablets.

While that's certainly happening now, analysts say it's likely not a permanent shift in the television landscape. As those people in their early 20s begin to age, their viewing habits are likely to change as well.

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"Younger consumers are more likely to watch shows on mobile devices but life milestones such as the purchase of a home or starting a family will increase adoption of TV sets for this age group," says Barbara Kraus, another director of research at Parks Associates. "Large TVs will still have a role in family entertainment or for video events that are best served by picture size and scale."

And, ultimately, what might be the biggest boost for TVs will have nothing to do with picture clarity, but overall usefulness in the house. With more and more televisions interacting with the smart home, the TV could become more than just the entertainment centerpiece of the home, transforming into the control hub as well.

"If the majority of consumers were to utilize TVs as a smart home hub, that would be a key breakthrough," says Kraus.