Benefits of connected TVs 'undersold': report

Sales of connected TVs are on the rise but most consumers don't even use their TV's internet capabilities.

Only around 45 percent of consumers with an internet-connected TV access its internet features says market researcher NPD Group in its Connected TV Owner Study released on December 29.

"Manufacturers are underselling the Internet features of connected TVs," said Ross Rubin, executive director of industry analysis at The NPD Group. "Broadband features unlock worlds of on-demand content; manufacturers should provide the key by integrating Wi-Fi."

The majority of people using their TV to connect to the internet use it to access online video content. 57 percent of consumers surveyed by the NPD Group said they watched content from movie and TV streaming company Netflix while 47 percent said they viewed content on video sharing website YouTube.

Viewers that do use their TVs' features to watch online content are generally pleased with the result; 57 percent of consumers who have connected their TV to the web say they are "very satisfied" with the features.

Currently, the biggest hurdle for internet TV manufacturers is designing and developing easy-to-use interfaces that allow for seamless browsing.

Google attempted to surmount this barrier when it teamed up with consumer electronics manufacturer Sony to release the Google TV in the second half of 2010. The device was met with mixed reviews.

"Current shipment levels combined with consumer feedback suggests that Google TV is not yet the Smart TV of people's dreams," said Paul Gray, Director of European TV Research at DisplaySearch, in a report released on December 30.

"While adding internet capabilities into the TV is powerful, it needs to be as effortless as channel surfing. However, Google TV has given a good lead into what works."

Slow adoption may be a blessing in disguise, especially for the already congested broadband networks (and for consumers who get hit with a big bill when they exceed their internet download limit).

"With Netflix accounting for 20% of peak internet traffic in the US, it's reasonable to ask if the infrastructure can cope. Set makers need to understand that broadband access does not scale endlessly like broadcast reception."

According to the Q4'10 Quarterly TV Design and Features Report released by market research group DisplaySearch, connected TV shipments will grow to more than 122 million units in 2014.