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Premium Content Helps Grow US Connected TV Audience

The trend is led primarily by the popularity of smart TVs and streaming devices from Amazon, Google and Roku

November 17, 2016 | Video | Media & Entertainment

US connected TV users will grow by 20.6% in 2016 to reach 181.8 million. Starting next year, growth will level off to single digits but continue in positive territory through at least 2020, when the number of users will reach 202.1 million, as explored in a new eMarketer report, “Connected TV and Over-the-Top Video: The Living Room’s Place in the US Digital Video Ecosystem” (eMarketer PRO customers only).

US Connected TV Users and Penetration, 2015-2020 (millions, % of population and % of internet users)

By 2020, connected TV users will represent 71.2% of internet users and 60.4% of the US population, up from 68.0% and 56.1%, respectively, in 2016.

Smart TV viewers will make up an increasing number of the connected TV user base during eMarketer’s forecast period. By 2020, 34.4% of connected TV users in the US will watch on smart TVs, up from 26.9% in 2016.

Smart TVs won’t be the only growth category within the group of devices that make up the connected TV universe. Amazon’s and Google’s streaming devices will enjoy the most growth from 2016 through 2020, followed by Roku players and smart TVs. Apple TV and game consoles will grow more moderately, while Blu-ray players will remain essentially flat.

Connected TV users as a whole will increase by a compound annual growth rate (CAGR) of 2.68% from 2016–2020—a lower growth rate than that of every device listed separately except Blu-ray players. This suggests people will increasingly use multiple devices, driving up the growth rates of individual devices more than the category as a whole.

US Connected TV Users, by Segment, 2015-2020 (% of total and millions)

As is typical with connected TV data, the number of households closely follows the number of users, with an average of 2.06 users per US household during the forecast period. By 2020, there will be 97.7 million US connected TV households, up from 88.7 million in 2016. Much like the user figures, growth will top 20% this year and recede into the single digits next year and for the rest of the forecast.

A GfK study titled “Over-the-Top TV 2016: A Complete Video Landscape” found that 36% of US internet users owned connected TV devices in 2016, nearly double the 19% who did in 2014. This particular stat was limited to set-top boxes and streaming sticks, and did not include smart TVs, game consoles, or Blu-ray and DVD players, though the full study looked at all of the above.

Connected TV accounted for 20% of US weekly time spent viewing digital video in August 2016, according to a Frank N. Magid Associates study. Mobile devices made up a combined 33%, while the largest share, 46%, went to computers. Even though connected TV had the smallest share of the three major device platforms, it grew by a factor of 2.5 in the two years leading up to the study, according to Magid.

US Internet Users Who Own a Connected TV Device, 2014, 2015 & 2016 (% of respondents)

Devices that power home-based video viewing showed high US penetration rates in separate studies published in September 2016. Nielsen noted that 24% of US households had smart TVs in Q2 2016, while 76% had DVD or Blu-ray players, 53% subscribed to a subscription video-on-demand (SVOD) service and 44% had game consoles. The study also noted that 94% of households had HDTVs.

A study by Verto Analytics found that in addition to the 90% of US internet users who had desktops or laptops, 31% had smart TVs, 29% had game consoles and 21% had streaming media devices. Since consumers need only one such device to enable connected TV viewing, the combined penetration rates—coupled with the likelihood that other household members might be using the same devices—amount to mainstream adoption of home-based video streaming technologies.

Get more on this topic with the full eMarketer report, “Connected TV and Over-the-Top Video: The Living Room’s Place in the US Digital Video Ecosystem.”

eMarketer releases over 200 analyst reports per year, which are only available to eMarketer PRO customers.

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