US streaming media player penetration to see 27% CAGR through 2017

Which came first, the chicken or the egg? Or, in this case, was it the streaming device or streaming media?

In the case of streaming devices, it doesn’t matter anymore, as a new report says they’re on their way to being in 40% of U.S. homes and, as they continue to gain traction, will drive streaming media usage and, likely, content availability, as well.

In NPD Group’s latest Connected Intelligence Connected Home Forecast, the company says that just 16% of U.S. homes, fewer than 15 million, had connect devices for streaming media installed at the beginning of 2014, it expected that number to increase to 24% this year as purchases from the holidays were reported, to hit 33% in 2016, and to soar to 40%, just less than 40 million homes, by 2017.

The influx of new devices to the market, NPD said, had “a significant impact” on the development of the market. Amazon’s Fire TV and Google’s Chromecast, for example, have joined Apple TV and Roku’s devices as important delivery devices.

While those types of streaming media players are expected to drive market growth, NPD said it will be helped along by connected TVs, video game consoles, and Blu-ray Disc players.

The total number devices delivering apps to TVs up to 211 million by Q1 2017, NPD said.

Streaming video service Netflix, NPD said, is the most-used video app on streaming media players, outranking YouTube, Amazon Prime Instant Video, Hulu Plus and HBOGo.

Amazon’s Prime Instant Video, the researcher said, has shown the fastest growth among video apps accessed through streaming devices.

Meanwhile, it’s likely that ease of access to content has helped push the market for streaming devices ahead more rapidly.

When Apple and Roku first came on the scene, premium content options were limited to Netflix and Hulu, with a number of other, smaller players providing varied batches of content.

But in recent years, that number has grown and the market – and even the kind of content available – has evolved greatly.

Netflix and Amazon, for example, have accelerated their development of original content, while retailers like Target and now even etailer Overstock.com, have moved into the EST and VOD space. Overstock is even saying it will join the movement toward developing its own original content.

And, increasingly, traditional broadcast and cable networks are looking to deliver their content online. HBO, CBS, Showtime and others all have announced plans for – or launched – OTT offerings.

The biggest development, Dish Network’s Sling TV, which is scheduled to begin broad distribution tomorrow in the U.S., will make streaming media players even more crucial, and likely ubiquitous, in American homes.

As NPD Group Executive Director Joe Buffone posits:

“Over the coming years we will continue to see a growing audience of TV viewers for streaming video services, authenticated network apps, and offerings such as CBS All Access that no longer require a pay TV subscription from a cable or satellite provider.”

NPD surveyed more than 5,000 U.S. consumers aged 18 and older in Q4 for the report.

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn