Stream This!: Streaming to TV
The Content Is There, but the People Aren’t ... Yet
Over the past 12 months, we’ve seen a lot of new content offerings announced by companies such as Netflix, Amazon, and YouTube as they look to directly target the living room via entertainment devices. Indeed, the adoption rate of hardware devices such as the Xbox 360, PlayStation 3 (PS3), TiVo, Roku, VUDU, Apple TV, and broadband-enabled Blu-ray Disc players and TV sets will be crucial in determining whether content owners can make money delivering video to the TV.
But despite all these new offerings, that content still reaches only a few million customers, a number largely unchanged from this time last year. While the market of delivering content to the TV will grow, it is unlikely to do so at the rate that many in this industry would like to believe. Here is a breakdown on the number of devices on the market and some data on the volume of content being consumed on them.
Xbox 360: Microsoft has sold 15.1 million Xbox 360 consoles in North America, according to the NPD Group, Inc. Since the Xbox LIVE Video Marketplace launched in November 2006, there have been more than 42 million downloads of entertainment content, including movies, TV shows, music videos, and featured trailers, according to Microsoft Research Redmond, while Xbox 360 owners have downloaded nearly 12.3 million hours of video content from the Xbox LIVE Video Store.
Xbox/Netflix: As of February, 1 million Xbox LIVE Gold members had downloaded and activated the application for streaming Netflix movies to the Xbox 360. Meanwhile, users had watched more than 1.5 billion minutes of content from the Netflix Watch Instantly library.
TiVo: While TiVo doesn't break down the number of Series 1, 2, or 3 DVR units it has sold, it does have 1.6 million total stand-alone subscribers. I estimate that 65% of those are Series 2, which means that there are roughly 525,000 Series 3 TiVos out there. The company has said that 85% of its HD TiVos are connected via broadband, which puts the number of units capable of getting Netflix content at about 445,000. For DVRs that can play YouTube and Amazon content, the number is likely higher since those content services only require a Series 2 DVR.
Roku: Roku won’t say how many units it has sold. But if we estimate that 3% of Netflix’s 10.3 million subscribers had bought the $99 unit by the end of 1Q 2009, a total of about 300,000 Roku units would have been sold.
VUDU: VUDU says it has sold "five figures’ " worth of devices, which I believe is less than 50,000 units.
Apple TV: Published reports put the number of Apple TVs sold at less than 500,000. Notably, Apple has, on multiple occasions, acknowledged that the device hasn’t been nearly as successful as the company hoped.
Blockbuster MediaPoint Player: The company has never offered numbers on how many of these devices have been sold, nor has anyone really bothered to hazard a guess. Bottom line: Blockbuster has no online video strategy. And while the MediaPoint player was first unveiled some 8 months ago, when you visit the Blockbuster.com website, it’s nowhere to be found.
Broadband-Enabled TVs: There are more than 50 broadband-enabled TV models due out in 2009, but analysts estimate that only about 3 million total sets will be sold in the next 2 years combined.
Broadband-Enabled Blu-ray Disc Players: To date, 9.6 million Blu-ray Disc players have been sold. But more than 7 million are simply PS3s that happen to contain the Blu-ray functionality, according to DEG: The Digital Entertainment Group. While new broadband-enabled players continue to be released into the market, the total number of sales to date has to be less than 50,000.
Even with all these numbers, we don’t have a good idea of the growth, as there are a lot of unanswered questions. For starters, Microsoft won’t say how many of its 15.1 million Xbox 360 consoles have a broadband connection. And while Netflix says that 1 million Xbox LIVE members have downloaded and installed the Netflix app, we don’t know how many paying Netflix subscribers are using the service today because the service offers free, 48-hour streaming trials to Xbox 360 owners.
While some may suggest that the Wii gaming console is missing from this list, so far, the Wii doesn’t really offer any content. Whether or not cable set-top boxes should be included in these numbers is debatable. It’s my belief that the cable companies are the ones that should be winning in the market when it comes to delivering internet-based content to the TV or premium content with all-you-can-eat models. But so far, I don’t see the cable companies doing a very good job at this.
On the surface, some of these numbers look really big. But once you break them down, the actual number of consumers that content owners are reaching via these devices is still very small.