SMART TV : RISING PENETRATION GLOBALLY 9th April, 2019 Follow us

INCREASING SMART TV HOUSEHOLDS GLOBALLY Smart TV households increased from 258 millions in 2014, to 560 millions in 2018, with a CAGR of 17%. Smart TV HH penetration reached 37% in 2018, increasing from 19% in 2014. Smart TV has gained a lot of ground when it comes to big screen content consumption Smart TV HHs more than doubled within last 5 years worldwide Source : Dataxis

MORE SMART TVs CONNECTED TO THE INTERNET THAN IN THE PAST 51% of the Smart TVs are connected to the internet in 2018, in comparison to only 33% in 2014. Other connected devices such as SMD are most used followed by gaming consoles, DVR/STB and Blu-Ray players. (Comscore data) Due to the increase in internet penetration ww, more and more Smart TV sets are connected to the internet. Source : Dataxis

APAC LEADING BY SMART TV HHs WORLDWIDE APAC is leading in number of Smart TV households, accounting for 50% of the total Smart TV HHs globally. In terms of compound annual growth, Latin America tops all the regions, with 25% CAGR between 2014 -18. APAC leads the Smart TV HHs numbers mostly because of China and Japan The most significant annual growth in Smart TV HHs, is coming from LATAM at 25% followed by APAC at 18%, then Europe at 17% and lastly NA at 9% Source : Dataxis

SMART TV PENETRATION TREND REGIONALLY North America has the highest Smart TV penetration at 70% in 2018, followed by Europe at 42%. APAC and Latin America has the lowest Smart TV penetration. Source : Dataxis

71% CONNECTED SMART TVs IN 2023 Smart TV households will cross the 1 billion mark in 2022. Connected Smart TV penetration will reach 71% in 2023, out of the total Smart TV households. Source : Dataxis

GLOBAL SMART TV INSTALLED BASE REACHED 640 MILLION Connected Smart TV installed base reached 346 million, at a CAGR of 31% between 2014 -18. 54% of the Smart TV installed base are connected to the internet in 2018. Smart TV Installed base have more than doubled in last 5 years globally at a CAGR of 30% In spite of rise in internet penetration, the smart TVs actually connected to internet are still low. Source : Dataxis

73% CONNECTED SMART TVs PENETRATION IN 2023 Smart TV installed base will reach > 1 billion in next 5 years. Connected Smart TV penetration on total Smart TV installed base, will grow to 73%. Source : Dataxis

SMART TVs TYPICALLY USED FOR VOD, CATCH-UP Smart TV and SVoD goes hand-in-hand, usage of Smart TV to watch VOD content via online video services and catch-up from pay TV and FTA operators is very common, irrespective of region. Smart TV Usage in Germany (by age group) Source : GFU Insights and Trends, 2018

SMART TV OS MARKET IS MOVING TOWARDS CONSOLIDATION Others* - Firefox OS, Amazon Fire TV, Smartcast OS, Netcast OS, Viera Cast, Aquos Net+, Net TV and others Source : Dataxis

Android OS Roku OS Proprietary OS Other* OS ADOPTION OF ANDROID AND ROKU TV OS BY MAJOR OEMs Android OS Roku OS Proprietary OS Other* OS Others* - Firefox OS, Amazon Fire TV, Smartcast OS, Netcast OS and others

KEY TRENDS AND FUTURE OUTLOOK Consolidation in the Smart TV OS market. Couple of OS gaining traction e.g. Android Smart TV ecosystem expansion: streaming devices, linear TV, app developers etc. Intense competition not only among TV OEMs but also from Streaming Media Devices. Emergence of strong Chinese brands crossing borders example – TCL, Hisense etc. New innovations – voice recognition support like Google Assistant and Alexa. FUTURE OUTLOOK Smart TV strongly positioned to integrate with Smart Home devices and services. Co-branded Smart TVs example TCL-Roku and partnerships with other ecosystem players. More consolidation in terms of OEMs and OS, together with constant innovation. Use of advanced technologies like Artificial Intelligence (AI), IoT etc. New business models – subscription to digital services. Future TV/content consumption will be a close combination of linear and online content rather than relying mainly on online TV Xiaomi pursues a strategy to provide subsidized digital services to their device user base - cross/upselling products within the ecosystem. Targeted advertising is much more easier on connected smart TVs Alexa, Cortana, Siri, and the Google Assistant and DuerOS (Baidu) – voice assistant (AI based) New business models – Smart TV OEMs should think for end-to-end content ecosystem as a new expanded business model to compete with SMD and other connected devices

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