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Digital Video Playout, set-top boxes, Connected TVs & Devices, Gen Edge, Millennials, mobile tv
Connected TVs zoom, pay-TV set-tops swoon and Gen Edge looms
Friday, June 8, 2018

The number of connected Smart TVs in the United States has increased more than 300% since 2014, as consumers continue to choose watching streaming video from an SVOD service or from a virtual MVPD as an alternative to traditional pay-TV.

New research out this week reports 29% of all TVs in U.S. households are connected Smart TVs, up from just 7% in 2014. And, nearly three-quarters (74%) of U.S. households now have at least one connected TV or connected-TV device like an Apple TV, Roku, Amazon Fire devices, Chromecast or gaming system, up from 65% in 2016 and 44% in 2013.

The research, from Leichtman Research Group (LRG) also found about one-third of U.S. adults watch video on a connected device daily, an increase of more than 52% in the past two years. As you’d expect, younger consumers 18-34-years-old are the biggest users with 43% watching TV through a connected device compared to 33% of 35-54-year-olds and 12% of users over 55.

Increasingly, U.S. consumers are buying 4K televisions – despite a dearth of 4K content – with one-in-three new TVs sold in 2017 being UHD sets. Households with an annual income over $75,000 are more than 4X as likely to own a 4K TV than households with annual incomes below $30,000.

Other findings include:

  • 46% of TV households have at least one stand-alone streaming device – up from 17% in 2014
  • Among those with any connected TV device, 57% have three or more devices – with a mean of 3.8 devices per connected TV household, and
  • Across all TV households, the mean number of connected TV devices is 2.8 – compared to a mean of 1.7 pay-TV set-top boxes per U.S. TV household. 

The findings are based on a survey of 1,202 TV households throughout the U.S., Connected and 4K TVs XV, LRG’s 15th annual study on TVs in the U.S. 

What’s the bottom line?

There are a couple, really.

  1. The research lines up with the shift of consumers from traditional pay-TV bundles to self-aggregated bundles that include an SVOD service like Netflix and/or Amazon Prime, along with a virtual MVPD play from a traditional operator like SlingTV or DirecTVNow, or a service from an industry player like YouTube TV from Google, or any number of other virtual players looking to replace consumer unfriendly bundles that has driven the cord-cutting trend.
  2. Connected TVs and connected TV devices now outnumber traditional pay-TV boxes in TV households by a margin of 2.8 to 1.7. It’s a narrow edge, but one that will see increasing growth as cord-cutting numbers continue to swell along with the number of cord nevers, specifically the Gen Edge demographic (born between 1996 and 2010) that now is just beginning to move into the workforce and, and that has begun to establish its own households.

The kicker…

Gen Edge is going to be a tough nut for the traditional pay-TV industry to crack. It's a demographic that is very aware of finances – they are the children of Gen Xers who they watched go through the Great Recession and whose older siblings have faced mountains of college debt. They’re digital natives, even more comfortable on a mobile device than Millennials and even more comfortable exploring the Internet to find their own video entertainment. Reaching Gen Edge – which numbers some 61-million strong – will be even more difficult than it’s been with Millennials. Mobile delivery – casting to connected TVs and connected devices – is going to be crucial as next-gen wireless networks deploy just in time for Gen Edge to adopt it.

Stay tuned.

Jim O’Neill is Principal Analyst at Ooyala. You can follow him on Twitter @JimONeillMedia and on LinkedIn

Jim O'Neill

An award-winning industry expert and futurist who specializes in the convergence of traditional TV and the Internet. My focus includes pay TV, Cloud TV, OTT, multiplatform media delivery, the ecosystem that surrounds it and consumer trends. A frequent speaker at CES, NAB, Digital Hollywood, Park’s Associates Connections events, Streaming Media and Digital Entertainment World, among others. I'm the Editor of Videomind, which in the past year has won awards from Editor & Publisher and Digiday. I'm also the Principal Analyst at Ooyala. I'm based in Michigan. I formerly was an analyst at Parks Associates and editor of FierceOnlineVideo and FierceIPTV. 

You can follow on Twitter @JimONeillMedia and on Linkedin