Worldwide unit shipments of streaming media players increased by just over 50% year over year, to hit nearly 15 million units in 2013, according to research by SNL Kagan MRG.
While demand and consumption for OTT video content is certainly growing, this continued demand for streaming media players has been surprising to senior analyst Michael Paxton (pictured) in light of the increasing competition from other streaming devices.
“This is a market I’ve been tracking for nearly five years and as an analyst, I’ve constantly underestimated the staying power of these products in light of the existence of many other consumer goods that provide the same service,” said Paxton.
The reasons for this are threefold. The explosion of Netflix and other internet-based streaming media services is the first major factor, followed by the ease with which a consumer can set-up and use a streaming media player. “By contrast if you’ve ever tried to use a smart TV set or an internet-connected Blu-ray player, those can be pretty daunting. Products like an Apple TV or a Roku are plug-and-play and the user interface is very intuitive, for even non-techy people.”
The third element is price, which Paxton has watched drop significantly over the past few years. “When the players first came out around seven years ago, the average price was about $150. Now, you’re seeing $49 or $59 dollar players. Over $100 dollars in this market is too expensive.”
While Apple TV remains the leading streaming media player product on the market, approximately 40 different vendors are currently shipping streaming media player products. These vendors range from consumer electronics giants such as Samsung, Sony and Hisense, to start-up companies like Nano Tech and QPlay.
Approximately 90% of all streaming media player unit shipments occur in North America. In order for the market segment to continue to grow, Paxton feels vendors will need to push their products into new markets such as Western Europe and select countries in Asia.
The market for streaming media players will continue to grow but will flatten out over the next five years, as other consumer devices cannibalise this sector. Paxton also warns that a number of wildcards could change the market, such as the improbable advent of the “mythical” Apple TV or product and service development by pay-TV providers.
“Will streaming media devices still exist in 10 years? I think they will and I think we’ll see even more differentiation between the different types of player products and what they support, whether it’s what types of content or apps they have built into it or capabilities they offer: maybe a wireless connection to a tablet or a type of mobile device. This may increase the price point but would increase the usability for some specific households.”