A forecast on the development of the 3D TV market in the US: Will 3D TVs become the next big thing in our living rooms? - Will 3D TVs become the next big thing in our living rooms?

Text Sample: What is the market Position of 3D TV in the US? In early 2010 the world's biggest TV manufacturers such as Samsung, Sony, Toshiba and Panasonic launched the first 3D home TVs in the new market. A market research conducted by Renub Research called '3D TV Market and Future Forecast Worldwide (2010 - 2014)', published on January 19, 2011 at www.marketresearch.com expected a total of 3.2 million 3D TV sets to be sold globally in 2010, a number that makes out 4% of all TV sets sold in the same year. Additionally, their forecast for the 3D TV market expects the unit sales to grow with a compound annual growth rate of 79.12%, passing the landmark figure of $100billion worldwide by 2014 (Market Research, 2011). A report published by Display Search called 'Quarterly TV Design and Features Report, Q4 2010' expects 18million 3D TV sets to be sold in 2011 and 90 million by 2014. With a combined market share of 66.17%, the USA and South Korea are the main protagonists on the 3D TV market (Display Search, 2011; Gagnon, 2009; Tribbey, 2009). The United States are a potentially big market for 3D TV: 115 million homes out of a total of 130million (U.S. Census Bureau, 2010) have at least one TV - a total of almost 88.5% of the households. The average US household is equipped with 2.5 TV sets while almost a third of them (31%) have 4 TVs or even more. According to the Nielsen's National People Meter (NPM) from September 2010, the 'average American' spends 25.6 hours per week watching TV (The Nielsen Company, 2011 - see also graphic 6). These numbers show clearly that the USA has a great potential and a wide and diverse target group to introduce 3D TVs to. Nielsen's NPM and Nielsen's Global Survey from September 2010 also indicate a percentage of 46% of all Americans who own an HDTV of which 14% are connectable to the Internet. Their data also show that 2% of the Americans have already purchased a 3D TV with a total of 2 million 3D ready HDTVs being sold in North America in 2010 (The Nielsen Company, 2011) . Those percentages indicate that there is not only a broad target group for new technologies, and that the group of innovators within the States already adapted to this new technology. Consumers' attitude towards 3D: According to a large scale quantitative research with consumers, conducted by CBS Vision together with Nielsen and CTAM, consumers are generally positive towards 3D TV: 76% of the surveyed people state that they are at least likely to buy a 3D TV, 17% of which are even 'definitely' likely. However only 14% intend to buy a 3D TV within the next 12 months, another 42% want to wait at least 2 years and 34% want to wait three to four years. So even though the consumers are generally positive towards the new technology they are not yet ready to adapt to it. 48% find watching 3D content more engaging than 2D and 57% say that it made them feel like being part of the action and another 48% state it makes them feel closer to the characters (The Nielsen Company, 2010). The challenges of 3D TV: 3D TV as a new product in the market faces a diversity of challenges. According to the PESTEL model, challenges can be divided into political, economic, social, technical, environmental and legal challenges (Johnson, et al., 2008). When analyzing the 3D TV technology, the most important challenges can be grouped into sociological, technological and economic factors. The sociological challenges probably have the greatest influence on the adoption of 3D TV as those deal with the potential consumers' perceptions and concerns and the marketing strategies of the 3D industry. On the other hand, technological problems and challenges need to be faced in order to make 3D TV more successful. The following paragraph analyzes those challenges in detail in order to come to a conclusion in how far which aspect needs to be improved in order to increase the adoption of 3D TV. The major challenges on the 3D market that will be discussed are: - Economic Challenges - Costs - Launch-Date - Technological Challenges - Standardization of technology - 3D glasses - Lack of content - Sociological Challenges - Consumer's wait-and-see approach - Education of consumers - Mistaking the 3D effect by 3D producers Economic Challenges: Costs: Both the production of 3D content as well as the manufacturing of 3D displays is more expensive compared to their 2D counterparts. The costs of 3D movie productions are up to four times the costs of the same movie produced in 2D (Mendiburu, 2008). And at the end the consumers have to pay for these extra costs. Even though the prices dropped drastically since the introduction of 3D TVs in 2010, 3D sets are still more expensive than 2D sets. Also, in order to watch 3D at home - to buy just the 3D TV is not enough. The consumer needs to buy a whole set, consisting of the 3D display, a 3D BluRay Player, a transmitter and 3D glasses. All of that added together makes the 3D experience at home a rather expensive one. Especially for large households the 3D experience can get really expensive because they need to purchase multiple pairs of 3D glasses. And as long as the active shutter glasses (around $120 per pair) are the most widely used- this can sum up to become a huge investment just in order to watch 3D at home. Unfavorable Launch-Date: The introduction of 3D TVs to the North American market occurred after the majority of the household adapted to HDTV. Apparently some 21% of all US households bought a new TV within the last 12 months and consider themselves set with their TVs. Only 18% of the households plan to purchase a new TV within the next 12 months (Entertainment Marketing Letter, 2011). This unfavorable launch date of 3D TV might explain a low adoption of the technology. Technological Challenges: Standardization of Technology: There is neither a defined standard for 3D TV production right now but there are also a lot of different technologies on the market. The consumer has the choice between active or passive 3D TVs, maybe at some point even auto-stereoscopic 3D TVs; he has the choice between LCD or Plasma displays and much more different options. Even though it seems that there should be technology to fit all the different types of consumers, this huge choice actually creates an information jungle, confusing the consumer. The usual consumer is hardly able to keep up with all the latest developments and changes of the technology and therefore becomes confused. This confusion can lead to some sort of frustration that leads to the fact that the consumer develops a wait-and-see-approach (see sociological challenges - consumer's wait-and-see-approach) and hesitates to adapt to the 3D TV technology. 3D Glasses: 3D glasses are a challenge for the 3D TV technology in different ways. According to studies conducted by the Nielsen Company together with CTAM, the main reasons the target group named about why they do not buy a 3D TV are: costs (68%), and the need to wear 3D glasses (57%) (Nova Gazette, 2010). The most widely used 3D TV technology is active 3D that requires so-called active shutter glasses in order to see the 3d effects. Those glasses cost - depending on the manufacturer - between $100 and $150 per pair. But those glasses only work with a 3D display from the same manufacturer and are not compatible with a 3D TV from another brand. That means that a consumer who decides to purchase a 3D TV from one brand and at some point might want to buy a new one from another brand, the glasses become useless. It also makes it impossible to 'just bring your own pair of 3D glasses' to someone else's place and watch 3D TV there together if this person does not have a 3D TV from the same brand. According to the Nielsen&CTAM research, it is not only about the price of those glasses but the consumer also considers them to be very uncomfortable. Lack of 3D Content: Even though the different manufacturers develop more and more 3D TVs of all sizes, the 3D content still pretty much limited to 3D movies that are available on DVD. For the consumer this obviously is a major issue that makes them hesitate to buy a 3D TV (Shein, 2010). According to The Nielsen report about the consumer's perception towards 3D TV the Top 3 of content they want to watch in 3D are Sports, Nature/Animal and Action/Adventure shows (The Nielsen Company, 2010, see graphic 11).