The premium TV market has reached a turning point, with consumers no longer content to simply buy a bigger screen than the one they had before – and that big TV is looking like it’ll cost more in the future, not less.

Speaking at the IFS Global press Conference 2017, Paul Gray, principal analyst for consumer devices at the IHS Technology research group, said a number of factors were changing the TV retail landscape, from consumer consumption habits to manufacturing.

“The industry has an incredible shortage of LCD panels at the moment and that’s profoundly affecting the business,” he said. The reason is screen size. “TVs are growing by more than an inch a year on average. This is affecting production capacity and the economics of the business.”

TVs are getting bigger and brighter, but retail prices have been falling. Yet panel prices to the industry have been increasing. “These price rises are going to come through to consumers – and that’s going to be an incredible challenge for retail.”

Manufacturing, logistics and engineering also require a rethink as screen sizes grow. “When you get to 65-inches, you have to do something about the rigidity of the screen – you need extra metalwork which makes it heavier, which means you need to put it into a bigger box with more polystyrene packing. There is an exponential change in the business when you get above 65 inches.”

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But buying habits seem to be changing. “In the premium part of the TV market OLED TV prices are about the same as an LCD TV that is about ten inches bigger,” said Gray. “But 65 inch OLEDs are out-shipping 75-inch LCD, even when prices are the same. Something interesting is happening. Consumers will go for an OLED rather than a bigger LCD TV. Up until now, ever bigger TV screen sizes have been driving the market.”

Content consumption patterns are also changing the way the business looks, noted Gray. “Pay TV providers are marketing UHD as a top tier service, but Netflix and Amazon are using UHD to reinforce a message of quality for marketing services; they are not selling it as a specific product. It’s just part of the quality/value proposition. UHD consumption is being driven by episodic drama, rather than film. ”

Could personal viewing time be about to shift away from big screen TV viewing to mobile? Gray cites Dolby Vision on LG’s new G6 phone. “It’s a really impressive viewing experience,” he says.

The arrival of 5G services look likely to accelerate mobile TV usage. “The most interesting things about 5G are latency and low power, rather than speed,” said Gray. “Both of these are very important for the streaming TV market.”


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