KEY POINTS

  • Streaming media device adoption is rising fast as over-the-top (OTT) streaming video services — such as Netflix and HBO NOW — make it easier than ever to ditch traditional pay-TV. We expect global shipments of streaming media devices to grow at a 10% compound annual growth rate (CAGR), from 240 million in 2016 to 382 million in 2021. 
  • Over the next few years, we expect the market for streaming media devices to grow and consolidate. In the long term, newer technologies like virtual reality will become a leading connected device segment. However, in the next five years, smart TVs, gaming consoles, and media streamers will remain the top categories by a wide margin.
  • Smart TVs currently dominate shipments, accounting for three-quarters of device shipments in 2015. As people upgrade their TVs, the global installed base of smart TVs will grow from 584 million in 2016 to 896 million in 2021.
  • Dedicated media streamers, like the Apple TV and Google Chromecast, are the second most common type of streaming media device by shipments. The category has recently taken off, with 25% growth last year and the same expected this year. Going forward, we forecast a CAGR of 18% through 2021, with shipments estimated to reach 108 million. 
  • Gaming consoles were one of the early devices consumers used to stream. At this point, though, we expect the gaming console market to stay fairly flat and steady over the next five years. Shipments are expected to reach ~36 million units in 2021, up from ~33 million this year for a CAGR of 2%.
  • VR and AR headsets are the newest and most unproven streaming media devices, but they also have the most potential to disrupt the market going forward. We forecast VR shipments will rise by a CAGR of 67%, to reach an estimated 27 million by 2021. 
  • It's important for content creators to bear in mind, though, that streaming media device usage doesn't yet closely mirror shipments data. Gaming consoles are actually still more commonly used for streaming OTT content in the US. This is likely due to gaming consoles' high penetration rate.
  • As streaming media device uptake rises, stakeholders throughout the larger media ecosystem will need to adapt to consumers' changing habits. Legacy TV providers will likely need to offer skinny bundles or their own OTT subscriptions to stay relevant, while advertisers will [...]