How to sell a TV in 2016: Hint—Play to cord-cutters

Samsung's SUHD TV Quantum dot display.
Source: Samsung
Samsung's SUHD TV Quantum dot display.

While size and other physical aspects used to be the main criteria for buying a TV, manufacturers are now emphasizing streaming content capabilities that don't always rely on cable services as a selling point.

At the presentation for Samsung's 2016 SUHD TV lineup in New York in April, the technology company focused first on over-the-top streaming video options, including Hulu, Netflix and Amazon. On Friday, it announced that all 2016 Samsung smart TV consumers can get the stand-alone HBO Now service directly through its TVs.

"It's really all about seamless integration," said Samsung director of home entertainment marketing Brandt Varner. "OTT and streaming services is really about giving consumers what they are looking for."


According to a December report from the Pew Research Center, 76 percent of Americans still have cable TV services in their homes. While the majority may be subscribing to cable for now, young Americans' behavior differs greatly. Nineteen percent of millennials said they have "cut the cord," while 16 percent said they've never paid for the services.

"Cord cutting is really a fringe activity, but this is about the 'cord nevers' — the millennials who left college and never had a cable subscription," said Forrester principal analyst Jim Nail.

Nail said most people have switched from cathrode ray TV sets to flat screens, and other shiny technology developments like 3-D haven't caught on with the public. 4K is still an experiment, he pointed out. However, one thing that consumers are starting to demand is that they can access OTT services, whether they have cable or not.

"(Manufacturers) are really casting the net for something that will drive value," Nail said.

The one stalwart that has prevented many Americans from canceling cable subscriptions has traditionally been sports content. But Sony has been dipping into live sports 4K streaming, including a trial with Univision Deportes, Samsung added 4K MLB content for DirecTV customers through AT&T, and the NFL has expanded its streaming services. It seems that in the future, consumers who crave sports content won't need cable.


Sony's new line of 4K HDR Ultra HD TVs support Google's Android TV operating system, meaning those who develop apps for Android can also create streaming video apps for its TVs. It's also bolstered its 4K movie streaming service ULTRA as well as its Internet TV service Playstation Vue.

"Our goal with our TVs is to give the best experience to the consumer, whether they are looking for cord-cutting or looking for that set-top box," said Philip Jones, product information manager at Sony Electronics.

Jones said while cable is still a more stable format and isn't reliant on broadcast speeds, young adults and kids value other aspects. His kids, for example, aren't used to adhering to cable TV's scheduled programming. They prefer on-demand content more suitable to streaming services.

"They don't look at TV the way we do," Jones said. "They want the information now, and want to arrange to watch it when they want to watch it."

Samsung's Varner said its new TVs are for both kinds of people as well. He explained Samsung's focus on internet-enabled TVs is more to streamline consumers home and entertainment experiences. The new line can also be transformed into an internet of things hub for connected devices in the home. It also allows for Comcast's Xfinity services to be streamed into its TVs, without the bulky set-top box.

But while the main motivation toward focusing on streaming services isn't a pre-emptive move to protect Samsung TVs against the death of cable, Varner acknowledged that younger generations like his brother, who is six years younger than he, prefer cutting the cord.

"There's a lot of web-enabled activity (on the TVs) that allows him to make it easier to access all kinds of apps that he wants so he can get his content," Varner said. "At the same time, we're partnering with all other partners out there to get content. He doesn't need a set-top box anymore to access content through a cable provider."

Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.

Correction: This story was revised to correct when the Pew Research Center report was issued: It was last December. It also corrected the spelling of Philip Jones' first name.