Connected TV Device Market Set To Explode

If you don’t have a streaming media player (or two) by now, it’s likely you will in the next few years.

According to the NPD Group, the number of streaming media devices in the U.S. will reach 204 million by 2017 -- an increase of 100% and a total that will be more than double the number of projected households connected to the Internet.

The growth is being driven by two market forces: More devices in the marketplace and a higher likelihood of consumers to use them, says John Buffone, executive director of NPD Connected Intelligence.

“First and foremost, there’s more product in the market,” Buffone tells Marketing Daily. “Second, consumers have a higher propensity to connect these devices and they’re more likely to use the apps that come with them.”

The connection rate is also projected to increase. While 60% of Internet-capable devices are currently connected, NPD projects that 76% of installed units will be connected by 2017. The rate will increase thanks to upgrades that prompt consumers to connect to the Internet when initializing their device, increased app programming from TV networks and user interface improvements. Buffone says.

“The hardware is able to engage with consumers in ways that it hadn’t before,” he says. “Over the coming years, the consumer’s preferred device for apps on TV will be shaped by the next generation of video game consoles, Smart TVs, and a new wave of streaming media players.”

By 2018, however, the growth rate will slow dramatically. By then, the majority of homes that want apps on their TVs will have one on their primary and secondary displays (the average U.S. home has three TVs). By then, the market will move from being one for first-time users to one where consumers are entering an upgrade cycle.

“Now is the time to establish consumer loyalty,” Buffone says. “Millions of viewers are trying new devices and apps, deciding which, if any, will become an indispensable part of their TV time.”

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