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Connected TV Takes Off

August 27, 2014 | Comments

The Internet has had a profound impact on just about every imaginable aspect of life since it "went public" two decades ago, even transforming politics (who can forget the pivotal role social media played in the 2008 Presidential election).

But there is one area that has operated largely outside of the World Wide Web until fairly recently: television. Most of us receive TV through cable and satellite subscriptions, but things are changing quickly as Internet penetration reaches all-time highs (87 percent in the U.S.) and connection speeds increase, paving the way for buffer-free video streaming from services such as Netflix and Hulu.

As of early 2014, the number of U.S. households with an Internet-connected television hit 42 million - 6 million more than a year earlier, according to a report from market research firm NPD. It turns out that people are connecting to the Internet in a variety of ways. The report lists the top four connected devices in terms of ownership as videogame consoles, streaming media players - Apple TV, Roku, Chromecast, etc. - Blu-ray players, and, finally, "smart TVs" that have built-in connectivity.

Even though TVs are ranked fourth, most of the year-to-year increase was driven by growth in the number of homes with streaming media players and connected TVs.

"Over the past 12 to 18 months we've seen the TV become a much more prominent device in delivering the Internet to the screen," explains John Buffone, executive director of NPD's Connected Intelligence unit. "And as consumers begin to replace their TV sets and more manufacturers offer sets with apps, we'll continue to see [the connected] TV rise in prominence."

The ability to connect wirelessly and the convenience of onscreen apps are key factors in determining which connected devices consumers prefer, according to NPD. Ease-of-use features ranked high in importance, led by an easy-to-use remote, an easy-to-navigate home screen, and the ability to easily find a desired app or channel.

"As consumers connect TVs to the Internet, they are not only using streaming services such as Netflix, they also switch from linear and on-demand TV programming to TV network apps such as HBOGO or WatchESPN," Buffone said, noting that apps have become indispensable for three-quarters of connected TV users who rank them as "extremely important" or "very important."

Which apps are most popular? NPD compiled this Top 10 list based on a national survey in which 3,800 consumers were asked about their interest in connected-TV apps:

  • Netflix
  • YouTube
  • The Weather Channel
  • HuluPlus
  • History
  • Amazon Instant/Prime Video
  • HBO Go
  • Fox News
  • PBS
  • WatchESPN

The shift from cable and satellite TV delivery being the only game in town has positive implications for TV viewers. Streaming services and TV networks make a wealth of content available for free or at prices that have compelled many younger viewers to cut the cord on cable TV and create a personalized mix of programming.

Of course, the onslaught of streaming apps and options also expands TV viewing opportunities far beyond the living room since we can enjoy whatever we want to watch on laptops, tablets and smartphones wherever we go.

To learn more about Internet-based home entertainment options, consult a CEDIA professional. Click here for a list of CEDIA-member home technology professionals in your area.