According to technology research company, Technavio, the global home theater market is expected to grow steadily, exceeding USD 28 billion by 2020. The top four emerging trends influencing the global home theater market, according to Technavio’s media and entertainment research analysts are the growing number of smart homes, vendors collaborating on product bundling, the growing adoption of cloud services and expansion to emerging markets.
Technavio’s latest report on the global home theater market, provides an analysis of the key trends expected to impact the global home theater market through 2015-2019. The technology research company defines the growing number of smart homes as a key emerging trend with the potential to significantly impact the global market and contribute to its growth.
The global home theater market is expected to exceed USD 28 billion by 2020, growing at a CAGR of over 8%. The global home theater market is growing steadily, owing to the increasing number of smart homes worldwide.
According to Soumya Mutsuddi, a lead research analyst for media and entertainment services at Technavio, “The global home theater market is expected to grow at a moderate pace. A major reason for its growth is that other large displays such as LED and UHD TVs lack good in-built audio systems as manufacturers compromise on the audio unit to keep the form factor small. Home theater systems provide better sound quality compared to other audio units.”
The top four emerging trends influencing the global home theater market according to Technavio’s media and entertainment research analysts are:
Growing number of smart homes
Many homes in developed nations like the US and the UK are being revamped into smart homes. In a smart home, consumer electronic devices, media and entertainment gadgets, and other smart electronics are connected to the home network and can interact with each other.
Home theaters play a major role in the functioning of smart homes, as they replace audio systems in smart TVs and gaming consoles. For example, they can connect with a projector and offer a theater-like experience. In addition, improved spending capacity of consumers in developing countries has increased the market for smart homes, propelling the growth of the global home audio equipment market.
Product bundling is a marketing strategy where vendors collaborate with smart TV manufacturers to bundle home theaters with their products, especially smart TVs. As flat-screen and slim TVs usually do not have high-quality built-in speakers, TV manufacturers bundle audio devices with TV units and sell them as a single product.
Growing adoption of cloud services
Cloud technology allows users to access a diverse range of pay-per-use computing resources operated by a third-party provider at minimal cost. The growing awareness among customers about the advantages of cloud technology has encouraged service providers to develop their capabilities in this domain.
“Cloud technology is paving the way for customers to access videos and music online legally. Initially, watching a video was a device-based approach, where devices like iPods were used. However, consumers are switching to an access-based approach, which enables them to subscribe to video libraries stored in the cloud. Therefore, vendors in the home audio market are manufacturing advanced home theater systems that can connect to the Internet and access online streaming content,” says Soumya.
Transition from developed to emerging markets
Major home theatre brands are shifting their focus from the developed to the emerging market, because the developed market is reaching saturation. The penetration rate of home theater systems in the US is above 85%, whereas in the UK, France, Spain, and Italy, it is above 70%, resulting in a decline in demand in these markets.
In contrast to the developed economies, developing countries such as India, China, and South Korea, have a relatively lower penetration rate of 45%. Hence, these markets offer an enormous growth opportunity as compared to developed countries.
Some of the top vendors in the global home theater market, as researched by Technavio analysts, include Bose, LG, Panasonic, Samsung Electronics, and Sony.
Technavio recently published three market reports relevant to this market segment.
Global Networked Audio Products Market 2015-2019
Home Entertainment Market in the US 2015-2019
Global Home Audio Equipment Market 2015-2019
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Technavio is a global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.