The TV App Opportunity

28 May 2015

The mobile app market is exploding. Downloads are at an all-time high. Gartner estimates app TV Appsdownloads to rise from 150 billion today to 300 billion by 2017 (doubling in 2 years, and rising five fold in five years) But while their general popularity would seemingly justify most forays from content developers and service providers, our latest research shows that there’s a very specific appeal and challenge to TV-related apps. Investment in developing and delivering these apps— like a second-screen guide experience or multiscreen viewing application—deserves a closer look.

Today, the cost of acquiring and maintaining a mobile app user is $1.34. Which when applied over an existing customer base, could run well into the millions of dollars. Apply that on top of operating and development costs. However, the potential for monetization—through either value-added second-screen and multiscreen services or the merchandising of paid content—makes mobile apps an important roadmap decision for many providers looking to stay ahead of the curve.

New data from a recent ARRIS survey panel revealed that TV apps represent a significant opportunity to tap into consumers’ appetite in mobile applications. But more importantly, we found that the current marketing and discovery model for apps will have to change significantly in order for that to happen.

We saw that the TV app penetration is still very low: nearly two-thirds of respondents had one or no TV-related apps. And engagement was similarly thin—with nearly the same percentage using them once or fewer per week.

At the same time, the data revealed an opportunity that could drive up the return on investment in TV-related apps if properly positioned. We found that TV guide usage was relatively low across the board: 40% don’t use the guide, and fewer than 25% use it on their mobile phone. However, user familiarity with TV guides is high, making them a suitable launch point for App engagement.

The concurrent paucity in TV app and TV guide engagement opens the door for a solution that can address both. The opportunity for providers is seamlessly extending the TV experience to the mobile device—adding more richness to the entertainment experience while building a foundation for monetizing these experiences.

Beyond simply developing the apps themselves, the next step for many providers is providing a pathway for consumers to engage with them. ARRIS’s Whole Home Solution is one way providers can integrate the home entertainment environment with the mobile app environment, allowing consumers to move seamlessly between these complementary experiences.

Find out more about ARRIS Whole Home Solution here and check out the results of our survey here.