Report: TV Apps and Services Market to Reach $14 billion by 2017

written by: Richard Kastelein

Share this Article

shutterstock 82867972NextMarket Insights, founded by Michael Wolf, who served as the founding Vice President of Research for GigaOM's research service, GigaOM Pro,  has recently released a $3500 dollar report that forecasts the US TV app economy to reach $14 billion by 2017, up from under $4.5 billion in 2012. 

The connected TV apps and services market is expected to explode in the next five years as new app frameworks in smart TVs, net-tops (i.e. Apple TV, Roku), Blu-ray devices and game consoles serve as the foundation for a new TV app economy.

“Market growth will be driven by a number of monetization models,” says Michael Wolf, Chief Analyst for NextMarket Insights. “The growth of app-delivered subscriptions, virtual pay-TV bundles, advertising, premium apps, in-app purchases, transactional content and digital to physical commerce will result in a substantial new market opportunity for both new entrants and nimble incumbents.

While the rise of powerful software platforms on connected devices and maturing monetization models will result in significant growth, challenges lie ahead for the TV app economy.  Platform fragmentation, an immature advertising ecosystem and resistance by incumbents could all hinder growth in coming years.

 “The biggest hurdle going forward for the TV app economy is the number of connected TV software frameworks,” says Wolf. “There are no less than ten connected TV software platforms in use by major OEMS today, with no clear winner in sight.”

With such a fragmented market, the potential for disruption is significant according to NextMarket Insights. One potential catalyst would be significant investment in a connected TV apps and services platform by either Apple or Amazon. 

“Both companies bring substantial strengths in digital distribution, content packaging and commerce that could alter the landscape,” says Wolf. “We think one or both of these players will make a push into this market in the coming 12-18 months.”

Editors note: Seriously. They are betting on Amazon and Apple to consolidate this arena? Netflix and Intel is where I would put my money. And Samsung and Microsoft. Actually it's probably Opera and HTML5 that will do that job from a technology point of view. They will sell TV licenses this year in the tens of millions. 

And there seems to be no focus in this report on the 2nd Screen which, if anything, will take a serious bite out of that projected 14 billion. To think that the Connected TV market will be 1/3 the size of the entire projected American gaming market by 2017 is pretty ambitious.  

Wolf is a hugely experienced researcher and analyst. He served as the founding Vice President of Research for GigaOM Research and has held management and principal analyst positions at In-Stat and ABI Research. And the market intelligence for this report was gathered from talking to over 25 companies in this space, including smart TV OEMs, connected TV and TV app software platform providers, connected TV advertising network platform providers, set top/net-top OEMs, online and TV commerce companies and more. While the survey data in this report is from an online survey conducted in April 2013 of over 1800 connected TV-using consumers.

But still... 

The problem is most industry pundits and consultants will tell you that it's highly unlikely that the big screen TV apps store is going to be a destination, and most of that acts of discovery, dissemination, and discussion are going to move to tablet and smartphones. Unless the TV and Connected device manufacturers get more aggressive and force the TV App store as a splash page every time you turn on your TV - which Samsung is doing in some markets now by shrinking down the linear broadcast on fire up and, ahem', borrowing some of the landscape for themselves. The apps stores are getting traction on the games consoles but uptake and usages on Connected TVs is still languishing mainly due to UX and UI issues. Which the tablet or second screen experience completely obliterates particularly with DLNA ... and will even more with new initiatives such as DIAL which has some interesting bedfellows including Sony, Samsung, BBC, Netflix, Hulu, Google and others. 

About the Author

Richard Kastelein
Founder of The Hackfest, publisher of TV App Market and global expert on Media & TV innovation, Kastelein is an award winning publisher and futurist. He has guest lectured at MIT Media Lab, University of Cologne, sat on media convergence panel at 2nd EU Digital Assembly in Brussels, and worked with broadcasters such as the BBC, NPO, RTL (DE and NL), Eurosport, NBCU, C4, ITV, Seven Network and others on media convergence strategy - Social TV, OTT, DLNA and 2nd Screen etc.

He is a Fellow of the UK Royal Society of Arts (RSA) and UK Royal Television Society (RTS) member.

Kastelein has spoken (& speaking) on the future of media & TV in Amsterdam, Belfast, Berlin, Brussels, Brighton, Copenhagen, Cannes, Cologne, Curacao, Frankfurt, Hollywood, Hilversum, Geneva, Groningen (TEDx), Kuala Lumpur, London, Las Vegas, Leipzig, Madrid, Melbourne, NYC, Rio, Sheffield, San Francisco, San Jose, Sydney, Tallinn, Vienna, Zurich...

He's been on advisory boards of TEDx Istanbul, SMWF UK, Apps World, and judged & AIB awards, Social TV Awards Hollywood, TV Connect & IPTV Awards.

A versatilist & autodidact, his leadership ability, divergent and synthetic thinking skills evolved from sailing the world 24000 miles+ offshore in his 20′s on sailboats under 12m.

He spent 10 years in the Caribbean media & boating industry as a professional sailor before returning to Europe, to Holland.

A Creative Technologist and Canadian (Dutch/Irish/English/Metis) his career began in the Canadian Native Press and is now a columnist for The Association for International Broadcasting and writes for Wired, The Guardian & Virgin. His writings have been translated into Polish, German and French. 

One of Kastelein's TV formats was optioned by Sony Pictures Television in 2012. 

Currently involved in a number of startups including publishing TV App Market online, The Hackfest and Tripsearch TV. As CSO for Worldticketshop he helped build a $100m company.

Other Sites

Social Media


About Us

TV Hackfest London 2013
TV Hackfest San Francisco 2014
M2M Hackfest 2013

Hackfest Twitter
TV App Market Facebook
TV App Market Linkedin
TV App Market Google+

Developer News
Enterprise Apps News

Digital Marketing News
Telecoms News
Cloud Computing News

This email address is being protected from spambots. You need JavaScript enabled to view it.
About us
Write for TV App Market