In a sign of how much Internet-based media is revolutionizing the way consumers access video entertainment content, more than 1.7 billion devices capable of accessing over-the-top (OTT) broadband content like Netflix and Hulu are set to ship by the end of 2013.
Shipments of OTT-capable devices will rise 20 percent this year from 1.43 billion units in 2012, according to a new Consumer Electronics Topical Report from IHS. At 1.7 billion units, this will equate to enough OTT systems to accommodate almost one out of every four people on the planet.
The market will grow another 20 percent next year, on its way to some 2.67 billion units by 2017, as shown in the attached figure. By then, total shipments will have expanded by 86 percent from 2012 volumes—phenomenal growth by any measurement.
OTT-capable equipment includes set-top boxes, Blu-ray players, Internet-enabled TVs, game players, digital media adapters like Apple TV or Roku, media tablets, PCs and smartphones.
Promising a new paradigm on how to access broadband media, OTT devices allow consumers to watch or listen to content from a wide range of places and through an extensive array of playback systems.
“Content owners, operators and consumers all are driving the proliferation of the OTT model,” said Jordan Selburn, Senior principal analyst, consumer platforms. “Content owners want to expand the market for the films, music and videos they own. Meanwhile, operators wish to use OTT in order to add value to their services and keep subscribers from cancelling TV subscriptions in favor of purely broadband connections—preventing what the industry calls ‘cutting the cord.’ Consumers, for their part, desire access to a wide variety of media at the time and place of their own choosing.”
The majority of OTT devices now are either PCs or smartphones, which together accounted for 836 million of the 1.43 billion OTT-capable devices shipped last year. Even though the primary task of the two devices is voice and data, both are also increasingly being used as media portals.
But even discounting PCs and smartphones, the rest of the OTT device market is extremely large and growing at an accelerating rate. Approximately 480 million of such non-PC, non-smartphone devices will ship this year, up 30% from 2012.