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Parks: It's a Roku World, in the U.S. Anyway

9 Jul, 2014 By: Erik Gruenwedel

U.S. household penetration for streaming media players — spearheaded by Roku — is projected to reach 25% by 2015, according to new research by Parks Associates. Global sales for streaming media players will reach nearly 50 million by 2017 while broadband household penetration in the U.S. will exceed 38%.

While Amazon Fire TV became the latest consumer electronics entrant into the streaming media device market, almost half (46%) of all players purchased in 2013 were Roku, followed by Apple TV at 26%.

Among U.S. broadband households with a streaming media player, 44% use a Roku player the most versus 26% who use Apple TV the most. The gap has widened since 2013, when 37% of streaming media player owners used Roku most and 24% used Apple TV most.

Multiple factors have allowed Roku to outpace Apple in U.S. sales and usage, according to Barbara Kraus, director of research at Parks.

Specifically, Saratoga, Calif.-based Roku has always had a close association with Netflix — founder Anthony Wood once worked there. Roku continues to offer the largest source of video downloads with more than 1,700 channel apps, as well as a choice of models with different features and price points, all of which appeal to consumers’ purchasing instincts.

“With Amazon entering this CE category, there will be renewed pressure on all players to develop the best combination of 'can’t miss' content with a simple and intuitive interface,” Kraus said.

Notably, Parks said Google’s Chromecast streaming stick sold as many units in six months as Roku did in 12 months last year. Yet, interest and usage in the dongle device has waned this year.

Parks said streaming media device manufacturers, to drive usage, will increase efforts to secure high-quality content, through deals such as the HBO and Amazon agreement, which brings HBO shows to Amazon Prime's streaming video service. In addition, should Apple release a new version of Apple TV with more functionality this year, it will create a more competitive market in the U.S.

“While approximately 50% of U.S. households have at least one Apple product, such as an iPhone or iPad, the company has not yet been able to leverage this success for its Apple TV offering,” Kraus said.

She said Apple’s heretofore tepid support for Apple TV (the late Steve Jobs once referred to it as a hobby) has undermined domestic sales — but not foreign. In fact, Apple TV is the global sales leader in the category, having sold approximately 20 million units worldwide as of April, compared with an estimated 8 million for Roku at the end of 2013.

"As Amazon, the world's largest online retailer, emerges as a new competitor in this space, it could awaken the sleeping giant that is Apple,” Kraus said.

About the Author: Erik Gruenwedel

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