As app infrastructures move into more and more products, consumers are beginning to expect apps such as Netflix and Amazon streaming on all of their devices. As these services improve U.S. consumers are also relying on them for more of their daily entertainment needs, cutting out traditional broadcasters in the process.
Market research firm IHS this week released a report showing that more than 1.7 billion “over-the-top” (OTT) devices will have sold by the end of 2013. These OTT devices are defined as being able to access streaming content such as Netflix, including set-top boxes, DVD/Blu-ray players, smart TVs, video game consoles, and streaming boxes such as Apple TV and Roku.
These sales represent a 20% increase over the estimated 1.43 billion OTT devices that were shipped in 2012. IHS estimates that there is now one OTT device for every four people on Earth.
“Content owners, operators and consumers all are driving the proliferation of the OTT model,” said Jordan Selburn, senior principal analyst for consumer platforms at IHS. “Content owners want to expand the market for the films, music and videos they own. Meanwhile, operators wish to use OTT in order to add value to their services and keep subscribers from canceling TV subscriptions in favor of purely broadband connections – preventing what the industry calls ‘cutting the cord.’ Consumers, for their part, desire access to a wide variety of media at the time and place of their own choosing.”
Though more consumers are accessing OTT content from their living room TVs, the IHS report shows that most consumers are still accessing streaming services through PCs or smartphones. However, the tablet market and other devices are quickly becoming a greater portion of the streaming media industry. IHS predicts that 480 million of the OTT devices shipped this year were not smartphones or PCs, marking a huge 30% increase over shipments of such devices in 2012.