David Farnor | On 10, Jun 2015

Amazon is leading the streaming media device race.

The retailer only launched its Fire TV set top box last year – followed by its stick this year – but the retailer has already accelerated ahead of its rivals. In the first nine months of 2014, a study by Parks Associates found that of the 10 per cent of US broadband households that purchased a streaming device, Roku was the most popular, with a 29 per cent share of the market, followed by Chromecast (20 per cent) and Apple TV (17 per cent).

Now, figures from Strategy Analytics show that in the first quarter of 2015, Amazon has seized a 30 per cent market share of shipments. Since its launch in 2007, Apple has shipped in excess of 15 million Apple TV units followed by Roku at nearly 13.5 million. Over 8.5 million Chromecast streaming dongles have shipped. In a far shorter timeframe, Amazon has already shipped close to 4.5 million Amazon Fire TVs.

The race continues to see new entrants – such as Google’s Nexus Player – but it’s hard to imagine another catching up with the pack: the top four brands now account for over 90 per cent of the standalone digital media streamer market. The contest, though, is far from over, as streaming devices’ affordability, compared to the price of a new smart TV, which may not be compatible with all VOD services anyway, make them an attractive addition to a digital living room.

At 3.5 million units, more devices were shipped in the USA in Q1 2015 than Smart TVs, IP connectable Games Consoles or Smart Blu-ray Players. A total of 35.7 million are now installed in US homes, while approximately 32 per cent of US broadband homes own at least one such device.

“Low-cost standalone digital media streamers are proving hugely popular with consumers who want a quick and easy way of accessing their favourite online streaming services on the living room TV and the entry of instantly recognisable brands such as Google and Amazon is helping maintain growth in the sector,” says David Watkins, Service Director, Connected Home Devices.

Crucially, people who buy them are actually using them: 90 per cent of households with these devices have them connected to the Internet, according to Parks Associates, while research from Gfk at the end of last year found that 43 per cent to 50 per cent (levels vary by device brand) of digital media player owners say that they use the devices in addition to their regular TV viewing. Roughly one third (38 per cent to 29 per cent), meanwhile, say they have reduced or eliminated their Pay TV service due to their usage of the devices. (Chromecast owners are most likely to report that their digital player supplements, rather than replaces, broadcast TV.)

“Digital media players take a primary role in users’ viewing behavior, ranking as the first or second destination – ahead of live TV or DVRs – when deciding what to watch in primetime,” commented David Tice, Senior Vice President at GfK. “However, a positive note for linear networks is that digital media player users don’t perceive their use as cannibalizing their regular TV viewing.”

As the take-up and usage of streaming media devices continues, Amazon will be confident in its position in the market, thanks to both its brand awareness and the fact that it has withheld Amazon Prime apps from its competitors, making Fire TV the only device with both Netflix and Amazon Prime. Will it introduce apps onto other devices to boost its subscription and pay-per-view rental income? Or will its growing share of the hardware market – its Fire TV boxes are certainly more successful than its Fire TV phones and tablets – make up for any losses elsewhere?

Either way, Watkins highlights the advantage Amazon has over Apple, whose Apple TV has begun to fall behind.

“Amazon has rapidly established itself as a force to be reckoned with in the living room as it embarks on its mission of bringing its content and retail services to all screens including mobile, PC and TV,” comments Watkins.

“Meanwhile, Apple has slipped behind its rivals having not made a substantial update to its Apple TV hardware for the best part of 3 years and we suspect that the short-term exclusive deal to include HBO Now and reduced price of the box will not be enough to pull it back up the rankings in the immediate future.”

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