nScreenMedia OTT multiscreen media analysis

TV devices – what’s up, down, and headed out!

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The living room continues to shift toward streaming devices. The disc player is in full decline, and the DVR is poised to join it while the game console treads water. Meanwhile, smart TVs and connected TV devices are moving in and handling an ever-increasing amount of our TV viewing.

DVD/Blu-ray Player outlook: accelerating decline

penetration of US TV homes - disc playerThe long-term decline in ownership of disc players accelerated between 2017 and 2018. Nielsen says that the penetration of TV homes fell 6%, to 66%, and has fallen 13% since 2015. The trend will continue into 2019 and beyond.

No other device has suffered as much as the disc player at the hands of SVOD services. Disc sales in the U.S. fell 25% between Q2 2015 and Q2 2018, and disc rentals are down a third over the same period. Nielsen says the average adult spends just 36 minutes a week watching video on the device. In 2015, the average adult spent an hour per week.

DVR outlook: decline

penetration of US TV homes - dvrThe DVR’s penetration of U.S. TV homes continues to inch higher. Between Q2 2017 and 2018, penetration increased a scant 1%. Since Q2 2015, penetration has increased from 50% to 54%. The slowing growth in penetration and other trends suggest the DVR may have reached its peak uptake and is headed for a decline in 2019.

The average adult spent 3 hours and 41 minutes per week watching time-shifted television in Q 2018, according to Nielsen.[1] In 2017, viewers used the device about the same, and usage has only increased 15 minutes per week since 2015.

However, SVOD services are beginning to erode the value of the DVR. According to Hub Research, when consumers are asked to name the source of a recently discovered favorite show, 32% say Netflix and 26% say linear TV networks. As appointment TV declines at the hands of anytime SVOD viewing, so too will the use of the DVR.

Enabled smart TV outlook: very strong growth

penetration of US TV homes - enabled smart tvThe penetration of enabled smart TVs in TV homes in the U.S. continues to grow strongly. It increased 9% between Q2 2017 and 2018, to reach 40%. In Q2 2015, just 18% of TV homes had a connected smart TV.

According to comScore, usage of smart TV is well behind other connected TV devices. That said, smart TV users are still streaming for an hour a day through the device. Watch for this trend to continue in 2019, as penetration approaches 50% of homes and time spent streaming continues to increase.

Game Console outlook: flat to slight decline

The primary reason to own a game console continues to be playing games. For a while, Sony and Microsoft were working to establish the console as the hub of TV entertainment for everyone in the home. Those days are over. Over the last four years, penetration of the game console has fallen steadily, from 46% to 42%.

Usage over the last four years has mostly remained flat, at about an hour and a half per week. Since SVOD usage has increased greatly over that period, it looks like even gamers are using a simpler platform to stream from their favorite online video services.

With no new console likely to arrive until late 2019 at the earliest, penetration is likely to continue to decline slowly and usage to remain flat.

Connected TV devices outlook: very strong growth

penetration of US TV homes - TV connected devicesDevices such as Roku, Apple TV, and Amazon Fire TV continue to find favor with consumers. Nielsen says penetration rose 4% between Q2 2017 and 2018, to reach 38%. Penetration is up from 22% in Q2 2015.

Usage is also growing strongly. Since Q3 2016, Roku says the average active account has increased the time spent streaming through their device 23%, to 2 hours and 50 minutes per day.

Expected connected TV penetration and usage to continue to grow strongly over the next year.

[1] Time-shifted viewing includes DVR, video on demand, DVD recorders, and service-based DVR functionality. However, most usage takes place through the home-installed DVR.

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