Report: Strong U.S. Consumer Appetite for OTT Video

DALLAS: Nearly one-third of U.S. broadband households use the Internet to watch shows and movies on their television set, according to new research for Parks Associates.

The survey, Value of Video: Shifting Consumer Dollars, finds that 31 percent of U.S. broadband households regularly watch TV programs or movies accessed from the Internet on their TVs. Sales of digital video media receivers, such as the Apple TV and Roku boxes, were strong this holiday season, with penetration approaching 13 percent of U.S. broadband households. The research firm forecasts that more than 14 million unites will sell in 2012. Apple reported 2.8 million unit sales of Apple TV in its fiscal 2011 and another 1.4 million coming in the holiday quarter. Roku also had a solid 2011, with 1.5 million sales.

“In the 2011 holiday season, 4 percent of households bought one of these inexpensive, single-function devices, which enable households to view over-the-top (OTT) video from Internet-based services such as Amazon Prime Instant Video and Netflix," said Kurt Scherf, the VP of principal analyst at Parks Associates. “Nearly 20 percent of these holiday-season buyers are over 45 years of age, so these devices have achieved relatively broad appeal among multiple consumer segments."

“While this trend does not yet frequently equate to canceling pay-TV services, it can mean shaving some premium channels for a set of households,” Scherf added. “That is a risk that pay-TV providers must address and a trend that both manufacturers and content providers are following with eagle eyes and plans for defensive actions.”