Report: Here's Why Consumers Are Turning to Streaming Media Devices

The way consumers access media content is drastically evolving. Viewers once limited to watching programming by a cable or satellite provider at a specific time and via a certain channel package are increasingly moving to over-the-top content (OTT) — or content that's streamed over the internet — for its greater selection and convenience.

Since streaming media devices debuted in the mid-2000s riding in the wake of new OTT services like Netflix, they've grown in popularity. In fact, over half of homes in the US have at least one television set that's connected to the internet.

In a new report,  BI Intelligence sizes up the overall streaming media device market by device category and takes a more granular dive into each. The report includes new shipments forecasts, identifies major players, and assesses the advantages and weaknesses of each device category. They also examine how usage and ownership may vary among device categories and the implications of this upswing on various ancillary markets, like advertising and app development.

Here are some key takeaways from the report:

• Streaming media device adoption is rising fast as over-the-top (OTT) streaming video services — such as Netflix and HBO NOW — make it easier than ever to ditch traditional pay-TV. BI expects global shipments of streaming media devices to grow at a 10% compound annual growth rate (CAGR), from 240 million in 2016 to 382 million in 2021.
• Over the next few years, BI expects the market for streaming media devices to grow and consolidate. In the long term, newer technologies like virtual reality will become a leading connected device segment. However, in the next five years, smart TVs, gaming consoles, and media streamers will remain the top categories by a wide margin.
• Smart TVs currently dominate shipments, accounting for three-quarters of device shipments in 2015. As people upgrade their TVs, the global installed base of smart TVs will grow from 584 million in 2016 to 896 million in 2021.
• As streaming media device uptake rises, stakeholders throughout the larger media ecosystem will need to adapt to consumers' changing habits. Legacy TV providers will likely need to offer skinny bundles or their own OTT subscriptions to stay relevant, while advertisers will want to capitalize on the opportunities available in targeting streaming viewers using demographic and behavioral data. App developers, platform creators, and game makers will also have a stake in where and how streaming activity develops.