Technology | Media | Telecommunications

Wednesday, January 28, 2015

How Streaming Video Services Gain Market Share

As more over-the-top (OTT) video is consumed by Americans in their homes, this trend has created a positive upside for certain types of consumer electronics -- in particular, streaming media players. Moreover, low-cost on-demand access to video entertainment has disrupted the legacy pay-TV industry.

By the first quarter of 2017, 40 percent of U.S. Internet homes will have a streaming media player, bringing the total number of homes with these devices to 39 million, according to the latest market study by NPD Group.

At the beginning of 2014 (Q1) only 16 percent of U.S. Internet homes had a streaming media player. Ownership is on track to climb to nearly one-quarter of homes, 24 percent, by Q1 2015 when consumers report device ownership that takes into account their holiday purchases.

In its infancy, the streaming media player market was driven by growth from Apple and Roku, but over the past year and a half Amazon and Google have made a significant impact.

In addition to streaming media players, smart TVs, game consoles, and Blu-ray Disc players also deliver apps and new video entertainment content sources to viewer.


Among these four device platforms, streaming media players are forecast to contribute the most growth, and TVs the second most growth, in installed and Internet connected smart TV devices over the next two years.

This ongoing growth will drive the total number of devices delivering software apps for TVs up to 211 million by Q1 2017. Not surprisingly, the increase in streaming media players helped boost the use of streaming video services.

There's a symbiotic relationship between consumer electronics devices and content consumption. Those savvy companies that truly understand how to capitalize on this phenomenon have gained significant market share.

According to the NPD assessment, usage of Amazon Prime Instant Video service saw the greatest percentage point increase, and all of the top five video services benefited from the growing streaming media device market.

"The rapidly growing streaming media player market, coupled with rising ownership of smart TVs and the new generation of game consoles is resulting in significantly more homes getting access to apps such as Amazon Prime Instant Video and HBO GO," said John Buffone, executive director at NPD Group.

Over the coming years we will continue to see a growing audience of TV viewers for streaming video services, authenticated network software apps, and offerings such as CBS All Access that no longer require a pay-TV subscription from a cable, telco or satellite service provider.