I’ve often wondered this, but my math skills suck. How big of an impact is Internet-delivered video really making in the consumer living room?
“While it is good to see more content options coming to consumers, adding up all of the install numbers for these devices gives a stark picture of just how small the install base really is,” Rayburn wrote. “The market is still too fragmented, with too many different devices, all limited by a lack of premium content.”
Rayburn bases his analysis on market penetration rates. His point is that the best technologies don’t always win — it’s what consumers adopt. The numbers for TV-connected devices are interesting.
- Xbox 360: 10.5 million units sold in the U.S.
- Netflix: 8.2 million subscribers
- Netflix Player by Roku: 10,000 units sold (estimate)
- TiVo Series 3: 250,000 units sold (estimate); 750,000 Series 2 and Series 3 units are connected to the Internet via broadband (two-thirds are estimated to be Series 2 devices).
- PlayStation 3: 4.9 million units sold in the U.S.
- AppleTV: 350,000-400,000 units sold in the U.S. (estimate)
- Vudu: 15,000 units sold in the U.S. (estimate)
Adding up the numbers, Rayburn estimates that 19.3 million Internet-to-TV content delivery devices have been sold. Rayburn breaks down the numbers further and concludes: “The real number of consumers capable of getting these content offerings is much smaller — so small, in fact, that they barely register.”
What Rayburn failed to supply is perspective. These numbers are rolled up since when? The Netflix Player by Roku is new. The TiVo Series 3 is relatively new. AppleTV and Vudu are about a year old. PlayStation 3 and Xbox are in the process of rolling out Internet video-to-TV services.
How long did it take other technology advances like the color TV, the fax, the telephone, cell phones, or cable TV — to name just a few — to reach critical mass? Their market penetrations and adoption rates were probably not that much better in their first years.
The fact that Microsoft, Netflix, TiVo, YouTube, Roku, Sony, Apple, and others are rushing to market all sorts of Internet-to-TV products is a sign that they believe Internet-delivered video will be making a big impact in the consumer living room — maybe not now, but soon enough.