Name: Marcus
Bio: Marcus is a specialist in consumer electronics technology and trends. He has 12 years experience in research, as a supplier and buyer in Australia and the United States. He is also a regular speaker at conferences having presented papers at ESOMAR, MRSA (Australia) and CASRO (USA).
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Is 3DTV a case of science leading fiction?
August 6th, 2010
The 3DTV push continues to gain momentum, with manufacturers doing their best to whey our appetites for the technology. TVCs, networks flogging sport, retailers jockeying for position, and even free glasses with newspapers are just some of the tactics that are flooding the market. The investment into 3D is high; the big players see it as an innovation that could give them leadership status in their respective industries. It is being heralded as the future, but are we ready we for it? From where I’m sitting, there are a number of serious barriers still to overcome.
Barrier number one: content. The nine network is the only network with a major push behind the technology at the moment. Only a very small proportion of content is available in 3D, and it is darn expensive to produce.
Barrier number two: the glasses. In our recent (June) Consumer Electronics Study, 71% of Australians did not like the idea of having to wear glasses to watch 3D. It may seem superficial, but it represents a significant level of resistance to the idea – would we be better to wait til the technology evolves to the point where glasses are not necessary?
Barrier number three: the waiting list. If you want to purchase a 3D model, the current wait list is two to five months, depending on manufacturer. This thwarts consumer desire for instant gratification and stifles the word of mouth vital to generating excitement.
Barrier number four: flatscreen fatigue. The majority of us have been our recently and made significant investment in a flatscreen. They’ve become the feature wall in the modern home. Most will not be ready for the expense of replacing a perfectly good TV.
Whilst 3D may be the ‘dream’ experience, people will remain driven by the aesthetics (size + design), colour, picture quality and durability when purchasing TVs. Features such as internet connectivity, video on demand, and video calling are also competing against 3D but at a lower price point. I don’t mean to sound like a negative Nelly, but I think it will be a while before we see it take off. There are too many barriers to overcome. It’s a great idea, but at this stage it’s a case of science leading fiction.
Popularity: 1% [?]
Made in China – Ignorance is bliss for TV buyers
April 14th, 2010
Is anything made in a brand’s country of origin these days? On a recent trip to buy Australian paraphernalia for Australia day, I discovered that even our plastic flags are made in China. China’s high tech manufacturing capabilities and cheap labour costs are well documented – you can understand why brands choose to manufacture there.
But do consumers really know the extent to which their products are made in China? Do they know that their premium-priced ‘German’ car was actually made in a Chinese factory? And do they care?
We touched on this topic recently with a couple of simple questions on our consumer electronics study. We focused on the TV category, simply because it’s a category where we know the products are manufactured in China – just go and check out your local JB Hi-Fi and look on the back of the Sony, Panasonic, LG & Samsung TVs. These are all brands underpinned by their country of origin’s superior technological capabilities (Korea & Japan), but who assemble most of their products in China.
The first question addressed awareness of manufacturing country:
| Q: Are you aware that most brands, including leading brands such as Sony and Samsung, manufacture their TVs (LCD, LED and plasma) in China? | |
| Yes – know most brands including leading brands now manufacture TVs in China | 33% |
| Yes – know some TVs are manufactured in China but didn’t know leading brands are also | 19% |
| No – did not know that most TVs are manufactured in China | 48% |
So only a third of consumers are aware that major brands are manufacturing in China, and half had no idea. But do consumers care? We also asked their opinions of Chinese manufactured TVs.
| Q: Which of the following statements best applies to you when thinking about the quality of TVs manufactured in China? | |
| TVs manufactured in China are of poor quality | 20% |
| TVs manufactured in China are not as good as TVs made in Japan or Korea | 48% |
| TVs manufactured in China are better than TVs made in Japan or Korea | 5% |
| TVs manufactured in China are of high quality | 23% |
| TVs manufactured in China are of better quality than TVs made anywhere else | 4% |
Ultimately consumers perceive Chinese manufactured products to be of inferior quality, be it correct or not. But given almost all TVs are manufactured there, they have little choice.
Really the bigger question is ‘can the emerging flood of Chinese branded products (e.g. HiSense) win the heart of Australians, based on these preconceived notions of quality?’
Let’s rewind 15 years. LG was Lucky Goldstar and Samsung was launched in Target. Korean brands were perceived to be inferior and had low consideration amongst consumers. In 2010, LG is perceived to be one of the most innovative technology companies and Samsung is #1 in televisions in Australia.
How did they achieve this shift? LG did so through a sustained localised communications campaign that helped to build a strong emotional bond with consumers, coupled with innovative products. Samsung achieved their position through a consistently strong product line up and in-store recommendation. Both strategies took time and money to achieve.
But in today’s world there is of course a third option. The scale achievable through digital advertising and social media and the role reviews play in the path to purchase means brands no longer need big budgets to build their profile. It will be interesting to see if the next generation of Chinese brands to hit Australian shores can generate enough good word of mouth and ride the low price point wave to success.
Popularity: 4% [?]
iPad: The consumer’s take
March 31st, 2010
Apple’s iPad was unveiled to the world in the early stages of this year, attracting both criticism and acclaim. The buzz is nothing new for Apple, revered for its brand and consumer advocacy, but the tide of criticism was stronger than before. It can’t multitask, it’s not flash enabled, there’s no camera, no USB port, no HDMI…
We conducted research with a nationally representative sample of Australians to find out how consumers will embrace the device when it hits our shores in late April.
Of those who felt they knew enough about the device to comment (45% of the population), the top concern was the lack of hardware (36%), and 13% rated the lack of the Flash ability a deal breaker.
More felt it would be useful for consuming digital media while travelling (20%) than consuming digital media at home (11%).
Purchase consideration in Australia appears to be lukewarm at best – 6% would consider purchasing it instead of a laptop and 5% would buy one to replace their current laptop, while only 6% would invest in the device due to the price point being below most laptops.
| Q: Thinking about the recently launched Apple iPad, if you were to consider purchasing one which of the following statements would apply? You may not have considered buying one but please indicate what you think of the device from what you know. [MULTIPLE RESPONSE] | |
| I would not buy one instead of a laptop as it lacks some of the hardware of a laptop (e.g. USB port, webcam) | 36% |
| I have a laptop and don't need another portable device for consuming digital media | 34% |
| It would be useful for consuming digital media while travelling | 20% |
| I would buy one and still keep my laptop - I see it could be used for other parts of my life | 20% |
| I have a laptop and a smart phone so would have no use for it | 15% |
| I would not buy one as it is not Flash enabled | 13% |
| It would be useful for consuming digital media at home | 11% |
| I will consider purchasing it instead of a laptop | 6% |
| I would buy one because it is priced lower than most laptops | 6% |
| I will consider purchasing it to replace my laptop | 5% |
| I have a smart phone and don't know how it is any different | 4% |
Sentiment towards the new tablet device at this early stage is mixed, indicating that consumers are uncertain. Like the iPhone did, the iPad has its weaknesses, but it also has the same mix of slick design, innovation, intuitive usability and Apple’s cult brand following. These factors consistently come through as the most important in the consideration set of consumers.
The challenge for the tablet device will be finding its place in the market. It is not unique in its functionality – it doesn’t do what another device can’t already do. In Australia, we’re seeing many of the smaller players push the notebook/ netbook, which have greater functionality than the iPad and are priced under $500 at the entry level. However, Apple is known for changing and creating spaces, and for the halo affect of its brand.
By pricing the device at a strategically low price point, Apple is allowing itself room to create a market for a new computing form. In doing so, it might change the way consumers interact with portable devices, again.
Popularity: 1% [?]
The future of TV – pirate or purchase, download or stream?
February 25th, 2010
Instant gratification…we all love it. And this love for getting what we want, when we want it, is moving into the way we watch TV. Recent research found that one in five Australians are now watching TV sourced from the internet, with the majority downloading the programming to watch at their leisure.
The findings confirm the trend networks have been scrambling to get on top of – there is a definite shift to the flexibility of access to a wider range of programming via the internet. The trend is still fairly new in Australia, but we’re starting to gain ground on international markets. In the U.S. in particular, online viewing is already widespread via sites such as Hulu.com, who are currently planning expansion into the Australian market.
The challenge for those looking to capitalise on the trend, is monetising the content via services such as Hulu and, for manufacturers, providing platforms optimised to view the content.
Pirate or purchase, download or stream?
Currently, the preference in Australia is for users to download content (17% of internet users do so) rather than stream content (6% watch live streaming). And of those who are downloading programs from the internet, 40% were recent (within the last six months) users of peer-to-peer downloading programs such as Limewire and BitTorrent, suggesting that a high proportion are pirating the content.
| Q: Which of the following ways do you watch television? | |
| Total TV sourced from the internet (downloaded + streaming) | 20% |
| Total download TV shows from the internet | 17% |
| Download TV shows from the internet and watch on PC/Laptop | 15% |
| Download TV shows from the internet and watch through a TV | 8% |
| Streamed TV shows through the internet (e.g. using ABC iView) | 6% |
But is this behaviour a result of preference for free content downloaded and stored or deficiencies in streamable content and broadband speeds in Australia? Our research indicates that most will continue to avoid paid content, regardless of how it is accessed. When we asked consumers if they would prefer a) free content with advertising, b) paid content, no advertising or c) free content, no advertising (accessed illegally), the overwhelming response is a). Consumers appear to understand that for free services to offer quality content, there must be an advertising-led model behind it. Hulu’s success in the US, supports the assertion that the advertising-led model works, and also suggests that streamed content is preferred over downloaded content. According to Hulu’s director of international business development, Simon Gallagher, programs available on Hulu to stream, experience significantly less piracy than those that aren’t. Current behaviour in Australia reflects the distinct lack of streamable content, more than a desire to download and store programming. Unless they are heavy downloaders, Australians generally have a low understanding of the technical requirements of data storage and download costs and will be welcoming of services such as Hulu. As we always say, content is king.
In terms of the type of TV content that is in demand, what is currently accessed/ downloaded is split between TV series from Australian TV (65%) and TV series not currently released in Australia (58%). The entry of Hulu, or similar service, into the Australian market will have significant ramifications for both free-to-air networks and Pay-TV networks who emphasise fast-tracked U.S. programming.
| Q: What type of TV shows do you watch/download from the internet? | |
| TV Series (eg comedy, dramas) on Australian Free to Air or PayTV networks | 65% |
| TV series currently not released in Australia | 58% |
| Live News from Australian Free to Air or PayTV networks | 23% |
| Documentaries/Current affairs on Australian Free to Air or PayTV networks | 23% |
| Telemovies/Mini-series not currently released in Australia | 17% |
| Telemovies/mini-series on Free to Air or PayTV networks | 15% |
| News that is based outside Australia | 15% |
| Other | 8% |
The disruption of the TV market in Australia has begun as. As challenges around the cost and speed of broadband access and deals between networks and IPTV providers are addressed, it will continue to gain speed. Networks and content providers need to ask themselves if their viewers will bother to wait around for broadcasted timeslots once reliable broadcasting of HD video is readily available over the internet. Or will they pick and choose what they watch, when they feel like watching it?
I will discuss the future of TV for manufacturers in my next post, by discussing the hardware best situated to capitalize on the evolution of TV.
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