The tablet just ate my TV!

Today’s New York Times story points out how television set manufacturers hope to ignite lackluster sales by building improved “smart TV” functionality into their mainstay products. Among initiatives is a move by Roku, the nimble provider of Internet video electronics, to embed its platform into a new line of TV sets. Samsung and others also are said to be “bullish” about the budding prospects for smart TVs, which plant Internet connections, processing capability and operating systems into TV sets.

This notion of improving the big-screen TV experience by adding Internet connectivity and easy access to streaming applications is attractive if you’re a TV set maker looking for a growth story between now and sometime when Ultra HD really happens – if it ever does. Video streaming, as everyone knows, is the rising star of television, and the fact that millions of people have rigged up external devices to connect TVs to the Internet – video game systems and boxes like Apple TV and Roku among the notables – is proof positive of

But just as TV set makers get wise to the possibilities of built-in Internet connectivity, a more meaningful revolution is brewing that threatens to undercut the strategy: The TV set is being displaced.

By a little tablet computer.

Evidence is mounting that tablets – much more so than smartphones, which are commonly and mistakenly lumped into a catch-all category of “multiscreen video” – are gaining favor as go-to television viewing systems, particularly among younger people. And most importantly – get this – they’re gaining favor as devices for viewing television in the home. ESPN is among the content companies that have discovered the large majority of tablet views for its streaming content are homebound – a finding confirmed by this Rovi Corp. 2013 survey, which found 80% of tablet views happen at home.

We’re not just talking short YouTube clips and family videos. More people are watching full-length TV series episodes and movies on tablets. Research published recently by Magid, Ooyala and Accenture has found tablet owners routinely watch long-form, “real” television on iPads, Samsung Galaxy tablets, Nooks and other hand-held devices. (This is almost certainly not news if you happen to own a young person, such as a tween or teen.) Magid’s August 2013 survey of 2,500 adults found 61% of tablet users regularly watch video on tablets, and 71% of those viewers watch long-form content on them. With about one-third of U.S. adults now owning tablets (Pew Research), this is an emerging market to be reckoned with.

What’s interesting is how this trend defies one of the great axioms of the recent television past, one I’ve heard repeated over and over by smart people in the cable and satellite television industries for years. It’s the idea that the large-screen, high-resolution, living-room television experience would be the ultimate protector of market presence, the unimpeachable blockade to intrusion from agitators like Netflix, Hulu, Google Play and others that cannot produce over the public Internet the same sort of high-def quality experience cable and satellite incumbents can provide through their closed digital delivery networks on the most important “glass” in the home.

The reality is it may not really matter that much. Or more precisely, the value ascribed to immersive, high-quality large screen television viewing experiences may not be compelling enough to overcome the appeal of personalization and convenience the tablet conveys.

Storytelling trumps size
Even more interesting, I think, is the revelation that watching television on a small screen doesn’t necessarily reduce the level of captivation a viewer experiences. Great television tends to be captivating not because it lords over the living room on a big screen, but because it involves great storytelling or moments of high drama on the playing field. Two minutes into a killer opening of a movie or TV show and it’s surprisingly easy to forget you’re watching on a miniature television screen. There is also a significant difference between watching video on a tablet – hand held, agile, easy to control – and a desktop PC or even a laptop computer. The tablet’s easy portability is liberating in a way that computers are not, and this plays very much into the rising popularity of tablets for full-length program viewing.

If all this is true – if tablets are encroaching meaningfully on television viewing time and attention – then pay TV providers should be wary of losing the early race to non-aligned Internet video providers that have an unmistakable lead in delivering content to tablets right now. One of the neatest bits of consumer research on the subject comes from the content-navigation software company Digitalsmiths, whose quarterly Video Discovery Trends Report surveys show tablet video applications from cable providers are not exactly burning it up in terms of usage and awareness. As the Digitalsmiths Q3 2013 research shows, a minority of cable customers (23%) have downloaded their provider’s tablet video app, and fewer still use it regularly. Even among those who have downloaded apps, a majority (57%) report they don’t use them at all during a typical week. More popular are apps associated with national TV networks and non-aligned streaming video services like Hulu.

For this to change, cable/satellite companies need to start treating tablet apps not as adjuncts to their legacy, television-centric business models, but essential parts of a product offering. Tablet apps should not be bit players in marketing and advertising creative – getting a brief screen appearance or a mention here and there – but stars of the stage. And it would be fascinating to see a specific video bundle and price point organized specifically for tablet viewers someday. (Here again, it’s important to make the distinction about tablets versus smartphones: Tablets are a new kind of television set used in the home. Smartphones are machines for showing video clips while waiting in line at the DMV.)

The bottom line: Tablets may not be the only reason TV set sales in the U.S. were down 4% last year. But pretending they’re not part of television’s new equation might be the riskiest strategy of all.

UPDATED JAN. 9: Apparently I’m not the only one who thinks tablets are emerging as a real alternative to traditional TV sets. Irdeto this week released results of a survey (1,000 U.S. adults) showing 53% believe mobile devices will replace TV sets as the most common way to get entertainment content. Here’s the press release.