nScreenMedia OTT multiscreen media analysis

Smart TV users watch 36% less than streaming stick/box users

enabled smart TV and streaming media player growth 2014 2017

Most TVs shipped in the US are smart and increasing numbers of consumers are connecting them and using them to stream video. However, will they catch up to, and overhaul, the market leading streaming media players?

Smart TVs the norm when purchasing a new set

Smart TVs are now the default choice for consumers when purchasing a new set. 70% of all televisions shipped in North America in 2016 were smart. A third of total smart TV sales have gone to Samsung, with Vizio close behind with 30%. The rest of the market is divvied up between multiple manufacturers. LG secures the third spot with 10%, Sony is next with 7%.

Smart TV and streaming media player benefiting from OTT growth

Streaming media player (SMP) and enabled smart TV penetration has grown strongly over the last four years. In Q1 2014 just 10% of TV homes had a smart TV and 15% had a streaming media player.  In Q1 2017, smart TVs have narrowed the gap on SMPs as penetration has grown to 29% and 31% respectively.

Both devices growth reflects how video streaming has moved into the mainstream. Between Q1 2014 and Q1 2017, Netflix U.S. streaming subscribers have grown from 36 million to 52 million. Moreover, services like Netflix put a strong emphasis on the television as the primary viewing platform. This trend seems likely to accelerate as consumers continue to move traditional television viewing to online platforms.

So, will smart TVs continue to catch up to, and overtake, SMPs as the preferred device for online streaming? Maybe not looking at usage data.

Smart TV usage is mixed

Smart TV and SMP usage frequencyWhen it comes to usage smart TVs come with a natural advantage. When the TV is turned on many smart TVs start from the devices web portal. Moreover, many smart TVs make content and app suggestions in the opening screen. These advantages impact how often an owner uses that functionality. According to Nielsen, enabled smart TVs were used on 20.8 days between December 26th, 2016 and January 29th, 2017. Game consoles were used 15.3 days and SMPs 14.9 days.

Smart TV and SMP usage timeWhen it comes to raw viewing hours the smart TV is well behind other devices. For example, game consoles are used for 4.4 hours per day, though that usage is likely dominated by gameplay rather than video viewing. On the other hand, SMPs are used for 3.6 hours per day with most of that usage dedicated to streaming. Enabled smart TVs are used for 2.3 hours, over an hour less than devices like Roku and Apple TV.

Streaming Media Players have advantages

One of the biggest advantages of SMPs over smart TVs is the price. With online video service interfaces and functionality evolving fast, newer apps can tax older hardware. A new SMP device can cost 10-20 times less than a new TV and, therefore, is better able to meet the consumer need to keep pace with the latest experiences.

The different upgrade cycles could also explain why viewing times are longer on SMPs than smart TVs. Even a smart TV that is just two years old may not run newer apps well, if at all. Add to that, online video service providers release new versions of their app first on streaming media players like Roku and Apple TV.

This rapid innovation cycle for online video apps and experiences seems like to continue for some while. While it does consumers will continue to favor streaming media players.

Why it matters

Streaming media players and smart TVs are seeing rapid growth.

This parallels the growth in the online video services.

However, streaming media players are likely to remain the dominant platform for TV streaming for some time.

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One Comment

  1. Something that this evaluation overlooks is the fact that the Streaming media players have more (ad supported) apps from the cable networks, and some of the broadcast networks than Smart TVs, which I believe drive usage via authenticated viewing from some form of subscription service. Another reason why Streaming media players have higher usage stats.

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