In the past decade, we’ve seen consumers buying new TVs in record numbers. The introduction of digital broadcasts and the advent of affordable, high definition flat panel TVs gave viewers ample motivation to upgrade from CRTs. The big question was: how long will it take for consumers to replace their first generation of flat panel TVs? We finally have some answers, and they are surprising.
According to our recent Global TV Replacement Study, consumers are replacing their flat panel and CRT TVs quite a bit faster than the 10-15 year average for CRT to CRT replacement in the past. And while numbers vary quite a bit across the globe, it’s entirely plausible that affordable flat panel TVs could cause TV replacement cycles to resemble those of PCs.
In more mature flat panel TV markets, like Japan or the United States, you might expect relatively higher household discretionary spending to lead to quicker replacement of TVs, but that is not the case. Some of the younger TVs being replaced are found in emerging markets, like India, Indonesia, and China. Certainly, the CRT TV business is less mature in those markets, since they generally adopted TVs at a later stage than advanced regions. But even though they have a relatively young base of installed TVs to replace, the differences are pretty big. For example, Indonesian consumers are replacing TVs that are nearly half the average age of TVs being replaced in Japan. This also is happening during a time when significant incentives are being offered to entice Japanese consumers to upgrade. (These incentives are in the form of the Eco-Points program, which is now coming to an end.)
Studying TV replacement rates, and the drivers of replacement or additional TV purchases, is important in understanding the potential for future consumption. If a market has a large penetration of fairly young TVs, but the replacement cycle isn’t shortening fast enough, there could be a lull in demand. This is particularly true if TV makers are counting on new features (like 3D) to drive shorter cycles, but consumers aren’t interested in trading a young TV just to get a new feature. These are the types of factors that we examine in the Global TV Replacement Study.
As I go through more of the data, which includes over 14,000 completed surveys from TV owners, I’ll continue to post updates on my findings.