A Third of Broadband Households Watch Internet Video on TV

DALLAS - Sales of digital video media receivers, including Apple TV and Roku players, were strong in the 2011 holiday season, with penetration approaching 13 percent of U.S. broadband households - a figure that matches earlier 2011 forecasts from the international research firm Parks Associates.

Parks forecasts that more than 14 million units will sell in 2012, and says these strong device sales indicate increasing consumer interest in nontraditional approaches to video access. According to a recent consumer survey, 31 percent of U.S. broadband households regularly watch TV programs or movies accessed from the Internet on their TVs.

Devices Appeal to Multiple Consumer Segments
"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," says Kurt Scherf, VP and principal analyst, 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."

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 enjoyed a solid 2011, with 1.5 million sales.

"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 said. "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."