Two-thirds of U.S. broadband households own Internet-connected video devices, according to a new report from Parks Associates.

The firm says that the devices, which include smart TVs, streaming media players, Internet-connected gaming consoles and connected PVR/DVRs, are serving for longer periods of time.

These lengthening replacement cycles are a challenge to manufacturers, who are responding with tactics including software and service offerings, exclusive hardware-content bundles and open ecosystems. This challenge and thin margins are reducing the field of competitors, the firm says.

“The connected entertainment space is moving towards a smartphone model, in which a handful of platform players control the operating system, UX, and consumer access to services and features,” Parks Associates’ Senior Analyst Kristen Hanich said in a blog post about the internet-connected video devices report. “These platform players stand to win big as consumers increasingly choose to sign up for their OTT service subscriptions through storefronts like Amazon Prime Video Channels, Apple TV Channels, or Roku Channel Premium Subscriptions.”

Hanich said that the rise of OTT services and fading of pay TV subscriptions results in fragmentation in the content services market as multiple paths to consumers are created. This, coupled with the fact that consumers now want to be able to access content when and where they are, is pushing toward open ecosystems that enable customers to get “most if not all” of what they want on any device regardless of the platform they are using.

Internet-Connected Video Devices Report
Other recent Parks research complements Hanich’s conclusions. In January, Parks found that 77% of smart TVs are connected to the Internet. This is a 62% increase since 2014. The firm also found that half of the 10,000 US households surveyed own a smart TV.

In October 2019, Parks found that homes with more than one OTT video subscription had increased 130% since 2014. In August, the firm said that monthly consumer spending on traditional pay TV had declined from $84 to $76 between 2016 and 2018.

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