Most Americans watch traditional TV, but connected TV purchases are rising. This could increase content consumption but will influence the industry with its increased bandwidth demands.
Despite its veteran status, television still is the main platform for watching content. Americans watch one screen or another for 35 hours each week, 94 percent of which is on a traditional TV. Though much of TV distribution is broadcast or cable, Internet Protocol television - IPTV - is influencing growth in viewing options while still reinforcing the TV’s position as main video device. These devices play regular programming and also connect to home broadband to stream video services from Netflix, Amazon, etc. The spread of IPTV is unique compared to other devices, since its expanded features are built into devices that people have and continued to purchase. As of February of this year, 10.4 percent of homes had an IPTV, up from 4.7 percent at the same time in 2011.
Connected TVs reinforce the television screen…
Instead of cannibalizing another device’s market share, IPTV increases the feature set of traditional TV sets, driving purchases within the category, as Nielsen’s reports. So while television usage remains strong, connected TVs support usage and increase the adoption of streaming features. This directly opposes the trends seen in once essential stand-alone devices; VCR and DVD player sales decreased over the same period. DVRs, however, are now found in 44 percent of homes, so the category of set-top boxes may not yet be a maximized category.
… And make bandwidth a priority for the media industry
Trend confirmation can already be seen from industry support - IP-based devices for watching video are currently being prioritized by media companies. Time Warner Cable is deploying new gateway DVR devices, and increase support to more connected devices, such as IPTVs and video game consoles. This initial move may indicate the next struggle in TV broadcast - the demand for bandwidth will increase dramatically with higher penetration of connected TVs. ValueMarkconsiders the possibility of Google’s ISP offering, which will surpass speeds of 1GBPS. This and other future entries into the industry could finally offer consumers a viable media offering that competes with traditional telecoms.