Smart TV penetration into North American households will meet and surpass 90% by 2024, according to data just released by Strategy Analytics. 

The research company said that more than 665 million homes worldwide, around 34%, owned a smart TV at the end of 2020. This figure is set to increase to 1.1 billion homes globally, or 51%, by 2026. 

“Smart TV is a standard fit feature of most flat-panel TVs sold today and so smart TV household penetration will inevitably continue to grow as consumers replace old sets with new modern smart-enabled versions,” said Edouard Bouffenie, senior analyst, connected home devices, for Strategy Analytics. 

Notably, the research company said Korea's Samsung, which makes its own operating system, remains the top shipper of internet-connected televisions worldwide. However, China's TCL--which licenses Roku for many of the sets it ships--has usurped Korea's LG for the No. 2 position globally. 

“Smart TV usage is growing and is on a path towards becoming the preferred platform for accessing online video content,” added David Watkins, VP, media and intelligent home practice for Strategy Analytics. “However, the current connected TV landscape in the home is incredibly complex and consumers may have multiple devices in multiple configurations to choose from. Factor in different viewing habits amongst different members of the household and it’s clear that TV streaming platform providers face a significant challenge in driving engagement and ensuring that TV viewers remain on their platform and do not switch to another source. Smart TV OS providers must look to influence the TV viewer’s journey through improved content discovery capabilities, advanced analytics and advertising platforms and the development of an intuitive and user-friendly UI.”

Flying somewhat in the face of the popular notion that the Roku platform controls up to half video streaming in the U.S., UK research company Strategy Analytics published data this week suggesting Roku’s control of the installed base of connected TV devices in the U.S. was actually only 22% at the end of 2020.

Globally, Roku’s share of the smart TV, OTT player and game console platform market is even more diluted, with the firm pegging the Roku OS at only 6.4% market share, trailing leader Samsung’s smart TV OS Tizen, which controls 12.7%. 

With equity analysts and media pundits pondering a future in which Roku runs away with the game ball, controlling a critical mass of viewer data and advanced advertising levers, this kind of information matters. 

Other research companies peg Roku’s domestic installed base market share at around 40% or more. And Strategy Analytics itself concedes that the Roku OS currently powers a third of the smart TVs sold in the U.S. We reached out to London Tuesday to ask David Watkins, director of TV streaming platforms for Strategy Analytics, how could his report be right?

Without specifying any of his employer’s research competitors, Watkins said Strategy Analytics data isn’t survey-based—its information, rather, is culled directly from vendors and retailers. Fair enough.

And the metric in question is “installed base,” not current sales or shipments, and not active devices. 

“We’re not distinguishing usage here—usage could be very different,” Watkins said. “We’re simply reporting the platforms' installed in people’s homes, regardless of whether they’re used or not.”

So while sales of Roku smart TVs through OEM brands like TCL and Hisense have been hot of late, the built up “installed base” of Roku devices won’t immediately reflect a change in market dynamics. This is particularly true for smart TVs, which have a life cycle of around six years, Watkins said. OTT players, dongles and sticks are replaced more often, he added, anywhere from two and half to four years. 

Roku is still the installed base leader in the U.S. But globally, Tizen is the leader in 22 of the 25 countries surveyed in the Strategy Analytics report, while LG’s smart TV OS, webOS, ranks second in 13 markets.

“Samsung’s smart TV market leadership gives it a great foundation to sustain Tizen as the leading TV streaming platform for years to come,” Watkins said. 

Overall, Strategy Analytics said the number of connected TV devices in use worldwide increased by 21% year-on-year to 162.3 million. 

Google’s Android TV saw the biggest increase in installed base growth at 42%, the report said, followed by Roku (40%) and Amazon fire TV (35%). Game consoles Sony PlayStation and Microsoft Xbox saw installed base declines, as did Google’s recently supplanted Chromecast platform. 

Notably, while, Roku has seen brisk proliferation from smart TV OEM sales, Amazon Fire TV has actually surpassed Roku in U.S. player, dongle and stick sales, Watkins said, thanks in part to brisk movement of low-priced gadgets at Prime Day and other sales events. 

How could an OTT platform with 51.2 million users worldwide rank sixth in global market share for fourth-quarter connected device sales? 

We scratched our heads for a moment as we studied the latest Strategy Analytics report. According to the research company, Roku only had a 5.8% market share for connected smart TVs, smart speakers, players, sticks, dongles and other OTT gadgets. It trailed not only Amazon and Samsung in Q4 tech sales, but Sony, Nintendo and LG, too. 

Strategy Analytics said that in a record fourth quarter, in which connected TV device sales increased 7.6% to 305.3, Amazon sold more than twice as many gadgets--13.2 million vs. just 6.3 million for Roku. 

Really?

The devil is in those smart TVs. Even though the Roku OS powers the majority of sets sold by TCL (ranked No. 7 with 5.7% of the market) and Hisense (No. 8 at 4.7%), Strategy Analytics credits those sales to the OEM partner, not Roku. 

Accounting for proliferation of the Roku platform through these smart sets, it’s a safe assumption that Roku gathered more connected device users worldwide in the fourth quarter than any other platform. (Whether the computer hardware in those sets delivers a satisfying connected TV experience to those consumers is another story--but Roku still leads in growth.)

Just the same, here’s Strategy Analytics’ skewed way of looking at the connected TV device world:

Samsung, a global leader in smart TV manufacturing, controls 14% of TV devices that connect to the internet around the world, besting everyone, including Amazon (5%) and Roku (3%), according to new research published Friday by Strategy Analytics. 

The global perspective throws cold water on the U.S. OTT device business, which is controlled by Roku, whose sales are being fueled by its partnership with Chinese smart TV marker TCL, now the top U.S. smart TV seller.

The fragmented global OTT device market, which is showcased in the Strategy Analytics graphic to the left below, includes 22 device manufacturers, the research company said, with the leading companies being smart TV makers—Sony (12%), LG (8%), Hisense (5%) and TCL (5%) are also among the market leaders. 

The figures were based on where the market stood in Q1 2020. 

The global market becomes even more fragmented when looking at connected TV platforms vs. devices (that’s the chart to the right). For example, Samsung’s Tizen operating system, which the Korean company began integrating into its smart TVs back in 2014, leads the global market, controlling 11% of the 1.14 billion OTT devices deployed across the world. 

But the “platform” ranking also includes the proprietary OS Samsung used before it started marketing Tizen, explains David Watkins, director at Strategy Analytics. 

“Over-the-top TV and video streaming to the TV is a complex and evolving landscape compared to mobile devices, where only two platforms dominate,” Watkins said. “Content owners and developers need to consider carefully how to target their resources and strategy towards specific brands and platforms, since geographical deployment patterns vary enormously. Frequently updated, tactical tracking of platform deployments is a valuable tool in ensuring that services are reaching their highest potential audience.”

BritBox, the SVOD service backed by BBC, ITV and AMC Networks, said it has generated about 250,000 subscribers about a year after its U.S. debut, and soon after its expansion into Canada.

RELATED: BritBox Arrives on U.S. Shores

Among other updates, BritBox said it has doubled the number of available hours of content since launch, now exceeding 4,600 hours of British TV programing. BritBox said it has also committed to a 50% increase in original and acquired programming investment for the upcoming year.

BritBox goes for $6.99 per month in the U.S., and is supported on several platforms, including Roku, Apple TV, iOS and Android mobile devices, the Chromecast streaming adapter and web browsers. It is also offered through Amazon Channels, Amazon’s SVOD aggregation service for Prime members.

BritBox has reached its subscriber milestone amid an explosion of SVOD services and a market that now appears ripe for a correction or a shake out. For more on that trend, and what SVOD services, including BritBox, are doing to differentiate in a fragmented market, see this week’s cover story in Broadcasting & Cable.

RELATED: SVOD Shakeout: The Survival of the Fittest (subscription required)

Strategy Analytics estimates that more than 250 million homes currently subscribe to a streaming video service, and is poised to grow to 300 million by the end of 2018, and 450 million by 2020. Those numbers are focused on SVOD, and do not include virtual MVPD services such as DirecTV Now.

The research firm also found that the average monthly household spend on streaming video services rose 5% in 2017, to $9.46, and that the average household is paying for 1.39 streaming services.

Netflix may have a sizable subscriber lead on other SVOD services, but HBO Now beats them all when measured against more than a dozen categories linked to customer satisfaction, Strategy Analytics found in a study that also included Hulu and Amazon Video in its analysis.

RELATED: Netflix Ended 2016 With 93.8M Subs Worldwide

Per the report,  HBO Now, the direct-to-consumer OTT service that debuted in April 2015, ranked highest in 11 of 14 categories, including availability of past season TV shows, overall number of shows and original programs, hit movies, quality of original programming and movies.

Netflix was ranked tops in three categories – recommendations, cost of the service, and, most notably, overall satisfaction.

Hulu held the edge in children’s programming, and outscored Netflix in six of the 14 categories. Amazon Video did not score highest in any of the report’s 14 categories of measurement.

“HBO Now has successfully positioned itself as a go-to-service for quality programs, especially movies,” Zhaowen Wu, digital media strategies analyst at Strategy Analytics, said in a statement. “Though HBO Now has a much smaller library than other SVOD services, it has more blockbuster movie and hit series such as Game of Thrones and Westworld.”

“When considering the bigger picture, Netflix clearly benefits from its brand ‘halo’ whilst HBO Now suffers from a negative association with cable’s legacy issues, however, once one gets into the weeds, the reality is that HBO subscribers are the most satisfied with nearly all elements that make up a strong SVOD service,” added Michael Goodman, the research firm’s director, digital media strategies.

Goodman stressed that the difference in scores across most categories was relatively small, and that Amazon’s scores could be impacted because video is just one benefit included in a Prime subscription.

“People have been talking about it being a Netflix vs. Amazon battle in terms of which service viewers choose, with the others left to pick up the scraps. However, if HBO continues on this vein, we’re more likely to see a situation where people will have one ‘blockbuster’ service like HBO or HBO Now and either a Netflix or Amazon in support,” Goodman said. 

More than 11 million homes in North America will own an 4K/Ultra HD TV by the end of 2016 amid falling prices and as 1080p sets continue to fade from the marketplace, Strategy Analytics said in a forecast released this week.

Under the current rate of growth, one in eight homes in the region will have a UHD TV, the research firm said.

Looking further ahead, Strategy Analytics expects all 40-inch or larger TVs sold in North America to be of the UHD variety, setting the stage for nearly one in every two homes in the region to have one.

"2160p resolution has almost become a given in the large screen TV market and attention is now turning to other attributes that fall under the Ultra HD umbrella such as high dynamic range, wide color gamut and high frame rates,” David Watkins, director of Strategy Analytics’ Connected Home Devices unit, said in a statement. “A high proportion of mid to high-end Ultra HD TVs sold this year will support HDR which in combination with higher resolution and enhanced color representation will deliver a significant step change improvement to the TV viewing experience beyond resolution alone."

"The uptake of Ultra HD bears many of the same hallmarks as the early days of ‘basic’ HD in that TV manufacturers have been very quick to seed the market with the necessary displays but there is very little in the way of content in order to take advantage of the full potential of the technology,” added Chirag Upadhyay, an analyst with the firm’s Connected Home Devices division.

While OTT services like Amazon and Netflix are early to the game with 4K content, MVPDs such as AT&T/DirecTV, Rogers Communications and Videotron have been getting into the act.

Comcast offers a small selection of 4K content through an app for Samsung smart TVs. While 4K will be part of Comcast’s mix going forward, the operator is placing more emphasis on HDR content that can be supported on both 4K and HD TVs. The Xi5, Comcast’s first box with HDR capabilities, is slated to start shipping on July 4. The Xi6, a device that supports both HDR and 4K, is also in development.

“When we evaluated this -- while there's hyper-attention on 4K, when we look at the total video experience, we think 4K is part of the offering. But HDR, which is not necessarily getting the same amount of attention, is in many ways more immersive and, we think, impactful. Matt Strauss, Comcast Cable’s executive vice president and general manager, video services, said in a recent interview.

After riding a solid wave of growth, the U.S. video streaming market is for the first time showing signs of saturation, according to a new study and forecast from Strategy Analytics.

Per the study, U.S. consumers will spend $6.62 billion on video streaming services such as Netflix, Amazon Prime and Hulu this year. While that represents a $1.19 billion (22%) increase compared to 2015, it also marks the first time that the amount spent on those services will be lower than the previous year’s increase of $1.21 billion.

Though that change is relatively small, “its direction is extremely significant,” Michael Goodman, digital media director at Strategy Analytics, said. “It shows that, whilst actual market saturation is a few years off yet, the domestic U.S. streaming subscription market is now on the backside of the adoption curve.”

He expects the incremental increase in annual spending on streaming services will decline from this point on.

Goodman notes that nearly 60% of U.S. broadband homes subscribe to a video streaming service. “We put market saturation at 85% of broadband households – similar to saturation levels for pay TV. Within five years, annual growth will fall below 8%,” he said.

According to Strategy Analytics, Netflix has a commanding 53% of the market, ahead of Amazon Prime Video (25%) and Hulu (13%), and estimates that nearly 40% of U.S. homes subscribing to a video streaming service take at least two.

These signs of saturation in the U.S. market will cause the major OTT SVOD players – Netflix, Amazon, and Hulu – to pursue new growth strategies. Netflix, which already leads the U.S. market, is already pushing ahead with an aggressive global expansion. Amazon has been less aggressive outside the U.S. with its Prime service, but its recent decision to offer a standalone OTT service could pave the way for a broader international move. Hulu sold its Japan business in 2014, but is preparing to launch a multichannel TV service with a slimmed-down lineup aimed at consumers who are not interested in traditional pay TV services.

While Hulu's plans for a virtual MVPD service will open up a new line of business, Goodman also believes that Hulu will also have to look beyond the U.S. for growth opportunities.

While trends indicate that the larger SVOD players will find growth harder to achieve in the coming years, Goodman believes there’s ample opportunity for complementary, more niche-oriented SVOD services that cost $2 to $5 per month to gain ground in the market.

A prime example, Goodman said, is Seeso, the new comedy service from NBCUniversal Digital Enterprises that costs $3.99 per month.

Since not all streaming service report revenues and subscriber information, Strategy Analytics’  model is based on a mix of public data and survey data. In all, more than 100 lines of code are fed into the model, according to Goodman.

More detail on the study will be featured in the Next TV section of the May 30 edition of Multichannel News. 

Global revenues for virtual reality headset products are poised to reach $895 million this year, according to a fresh forecast from Strategy Analytics.

New, premium products from Oculus (Rift), HTC (Vive) and Sony (PlayStation VR) will drive 77% of the value, despite accounting for just 13% of the volume, while lower priced smartphone based devices, such as the Oculus-powered Samsung Gear VR, will dominate the 12.8 million VR units shipped during the year, the firm said, calling 2016 a “pivotal” year for the emerging platform.  

Strategy Analytics believes that high-end VR headsets that must be tethered to PCs and came consoles (the Oculus Rift, HTC Vive and coming PlayStation VR), will be lucky to exceed 1.7 million devices shipped globally this year because of “prohibitively high pricing.”

“At the same time, smartphone toting consumers are being bombarded by low cost and often bundled-in VR viewers like never before,” Strategy Analytics said, adding that they effectively are a “gateway drug” to upsell consumers on higher-end platforms. Of that group, Samsung has been bundling the Gear VR (regularly $99) with its new S7 smartphones.

As volumes go, smartphone-based VR headsets will represent 87% of the category volume in 2016, versus game console-based systems (9%), and PC-based products (4%). Game console-based VR platforms will represent 46% of the revenue share in 2016, versus 31% for PC-based VR, and 23% for smartphone-based systems, the research firm said.

"Consumers will soon be exposed to an incredible diversity of virtual reality options ranging from ultra-low cost to super premium,”  Cliff Raskind, director of Strategy Analytics' Wearable Device Ecosystems service, said in a statement. “While we expect smartphone-based viewers to take the lion's share of VR headset volumes in 2016 at 87% of shipments, PC and Game Console powered headsets will absolutely dominate value share commanding 77% of revenues." 

Led by the Chromecast, products from Google, Amazon, Apple and Roku accounted for more than 8 of every 10 digital media streamer shipped globally last year, according to a new report from Strategy Analytics.

Per the study – Global Connected TV Device Vendor Market Share: Q4 2015 -- the $35 Google Chromecast took down 35% of the 42 million digital media streamers shipped last year, followed by Apple TV, Roku and Amazon Fire TV products.

The Chromecast’s $35 price and portability has made it an impulse purchase for many and household ownership of multiple Chromecasts is not uncommon,” the firm said. “However, the mobile device is not necessarily the center of the universe for everyone and devices such as Apple TV, Roku and the Amazon Fire TV continue to prove popular with those looking for a more traditional remote-based and UI driven TV experience." 

Based on cumulative shipments, the Apple TV, with 37 million units shipped since 2007, still leads the pack, though the Chromecast, at 27 million units shipped and coming off the introduction of a new model, is making up ground, followed by Roku players and the Roku Streaming Stick (20 million), and the Amazon Fire TV (less than 10 million).

When factoring in other types of connected TV devices, such as smart TVs, Blu-ray players and gaming consoles, global shipments in the category totaled 220  million units in 2015, thanks to record shipments of 84 million in Q4, Strategy Analytics said.

Smart TVs accounted for 54% of all connected TV devices shipped in 2015, hitting 120 million units. Samsung, LG and Sony enjoyed a combined 50% share in that segment, despite strength from TCL and Hisense, makers of a new line of  integrated Roku TV products.

"Ownership of connected TV devices is not restricted to one device over another,”  Chirag Upadhyay, senior research analyst, Connected Home Devices service, at Strategy  Analytics, said in a statement.  “Our research shows that US broadband homes own an average of 2.3 such devices giving them multiple means by which to stream video and audio content to the TV. While some consumers will have a favoured method, we find that most households are switching between different devices depending on the user and type of content being consumed."

Google’s Chromecast streaming adapter topped the media streamer market in the third quarter of 2015 on a global basis, Strategy Analytics found in a new study.

About 9.2 million devices were shipped in Q3 in the category. As the chart shows, Google Chromecast  was tops, with a 35% share of the market, followed by the Apple TV, Amazon Fire TV, and Roku.

The latest numbers come in amid the launch of new products from each compan heading into the holiday buying season. 

Strategy Analytics noted that global shipments of all connected TV devices, including smart TV, Blu-ray players, game consoles and streaming players, reached 53 million units in Q3, and are on target to reach 221 million units for all of 2015. That’s a growth rate of 17%, the firm said.

On the smart TV front, Samsung is outpacing LG and Sony, and now accounts for about 25% of all smart TVs in use worldwide.  However, Philips, Sony and Sharp have recently jumped in with TVs powered by the new Android TV platform, which captured between 8% to 10% of the market in Q3 2015, Strategy Analytics found.

Sony, meanwhile, shipped more than double the number of gaming consoles as Microsoft in the period, though the Xbox One “is expected to close the gap on the PS4 during the final quarter thanks to its appealing 1st and 3rd party bundles.”

“Despite the growing penetration of integrated Smart TVs, Digital Media Streamers such as Chromecast and Fire TV continue to prove popular with consumers thanks to their low cost and effectiveness at bridging the gap between the Internet and the TV screen,” David Watkins, services director at Strategy Analytics’s Connected Home Devices service unit said, in a statement. “While the long term viability of such devices will be threatened by advancements in Smart TV technology, they are currently acting as significant components in Apple, Google and Amazon’s fast evolving TV and video ecosystems.”

“The growing adoption of Connected TV Devices in the home proves that the living room TV screen is still the dominant medium for consuming TV and video content,” added Chirag Upadhyay, the division’s senior research analyst. “The collective viewing experience cannot be replicated on a smartphone or tablet and so we expect the ‘connected TV screen’ to remain a focal point of homes in the future”.

The benefit of two-day free shipping on Amazon is apparently a bigger driver of Amazon Prime subscriptions in the U.S. than the unlimited streaming of TV shows and movies that comes along with the subscription.

That's according to a just-release study from Strategy Analytics, which found that 55% of U.S. respondents who had Amazon Prime said free shipping was "very important" to why they subscribed, while 46% said Instant Video was very important.

The study -- conducted online among users ages 18-74 in the U.S., the U.K., Germany and France in November and December 2014 -- also found that of those who have subscribed to Amazon Prime, more said they used Netflix (63%) in the previous month than said they used Prime Instant Video (59%), though that difference is within the margin of error.

"“In contrast to countries such as the U.K. and Germany, Americans are more likely to subscribe to Amazon Prime for free two-day shipping than for Prime Instant Video,” Leika Kawasaki, Strategy Analytics’ digital media analyst, said in describing the findings. “Americans are twice as likely as Britons to cite free two-day shipping as ‘very important’ in deciding to subscribe, and they’re less likely to use the video service regularly.”

Kawasaki said Amazon might be able to boost its video audience by driving more adoption of its Kindle and Fire TV devices, since owners of those are 10% more likely to use Prime Instant Video "regularly."

Strategy Analytics clients include Sony, Samsung, Microsoft (Xbox), Viacom (MTV), Verizon, Comcast, Facebook, Intel and Adobe.

The study was conducted by Consumer Metrix and was funded internally rather than sponsored by any of those clients, according to Michael Goodman, Strategy Analytics's director of digital media strategies, who also provided the client list.

Almost 5,000 responses were received, with a study margin of error at plus-or-minus five percentage points.

Digital advertising in the U.S. will grow 13% this year, driving an overall 3.2% increase in total ad spend to $186.6 billion, according to a new forecast from Boston-based consultancy Strategy Analytics. 

By comparison, the TV ad spend is expected to grow only 1.7% while print advertising will decline 7.9% year-over-year, the company said.

The year’s digital ad increases will be fueled by search (up 45%), social media (31%), video (29%) and mobile (20%). The digital growth alone, however, is not enough to bolster traditional media revenue, which Strategy Analytics expects to be 0.2% lower in 2015 than in 2014.

“Despite digital’s best efforts, the drop in traditional ad revenues means we’ll see fairly modest growth in overall U.S. ad revenues in 2015,” Michael Goodman, co-author of the report, said. “[We] will have to wait for more significant growth in 2016, courtesy of the U.S. presidential elections and summer Olympics.”

Other ad categories that Strategy Analytics predicts will grow in 2015: outdoor (up 4.8%), cinema advertising (3.4%) and radio (1.8%).

At $78.8 billion total, U.S. TV ad revenue would comprise a 42.2% share of the overall U.S. ad spend, down 0.6% from its haul in 2014. Next is digital with 28.3% ($52.8 billion), up 2.5% from 2014, and print with 14.9% ($27.9 billion), down 1.8%. The remaining 14.6% will come from radio ($17.6 billion), outdoor ($8.7billion) and cinema ($0.8billion), each relatively unchanged from last year.

Looking ahead to 2018, report co-author Leika Kawasaki said TV’s share of the ad spend will drop to 40% while digital will grow to 35% share, but TV networks are unlikely to feel any major pain from the change. “TV’s declining share is less about ad dollars flowing out of TV and more about dollars flowing into digital from print and radio,” Kawaski said. “TV networks … will see little, if any, real decline in revenue, just a shift in the source from linear TV ads to online video.”

Print advertising, on the other hand, is expected to fall to $20.3 billion by 2018, or less than a third of its 2007 level, accounting for only 10% market share.