Here’s a headache for both the hardware industry and Hollywood: Only 47% of home entertainment devices — smart TVs, Blu-ray players, video game consoles and streaming media devices — are connected to the Internet, according to a new study by NPD Group.
That’s a problem for electronics device manufacturers and content owners who are hoping that hardware in homes will become the next big platform for generating revenue for their movies, TV shows, music and games. While the digital dollars have been adding up over the last several years, significant growth will depend on more consumers accessing entertainment online in their homes.
Internet capable TVs and Blu-ray disc players are the least likely to actually be connected to the Internet and used for their online features, while streaming media players and video game consoles are connected and used the most, NPD’s Connected Intelligence Connected Home report reveals. In fact, smart TVs ranked last in the list, below Blu-ray players, highlighting a marketing problem companies like Panasonic, Samsung and Sony still need to overcome as they try to fill up their new flatscreens with more apps.
Study also found that 40% of TVs connected to the Internet, either through the TV itself or through another device, are used to watch Netflix streaming, followed by YouTube (17%) and Hulu (11%), according to a separate Connected Intelligence Application & Convergence report.
“Content usage remains dominated by Netflix and YouTube,” said John Buffone, director, devices, NPD Connected Intelligence. “An opportunity for digital distribution lies in enticing consumers to plug in to the Internet and download the apps available on devices they already own.”
NPD does expect connectivity to improve. A new generation of streaming media devices are expected to provide a more compelling interface that will aid in consumer discovery of new services, especially when compared to Blu-ray disc players, NPD said.
“While there are more Blu-ray disc players installed and connected to the Internet than streaming media players such as Apple TV and Roku, we expect that to change in the next year,” said Buffone. “Streaming media players will exceed the number of installed and Internet connected Blu-ray players in 2014.”
NPD surveyed more than 4,000 U.S. consumers, age 18 and older for the report.