What retailers need to know about the connected consumer

A new reported about the growth in Internet-connected devices has important implications for retailers.



The new Connected Home Entertainment Forecast from the NPD Group shows that by the end of 2018, 231 million installed devices are expected to be connected to the Internet and able to deliver apps to TVs, representing 82% growth from 2014 to 2018.



“The two largest drivers of growth will be the increased acceptance of connected televisions in the homes of U.S. consumers, as well as the continued adoption of streaming media players such as those offered by Google, Apple, Roku, and Amazon,” said John Buffone, executive director of the NPD Group.



Connected TVs — inclusive of Internet-capable 4K TVs — are projected to drive 37% of the growth during the four-year period, and streaming media players are projected to drive 33% of the growth during that same time period.



Netflix, YouTube, Amazon, Hulu, and HBO GO remain the top five streaming video services used on connected TVs and attached content devices. But, a new video distribution channel is surfacing through the proliferation of streaming services from television networks that no longer require viewers to subscribe to a pay TV channel bundle.



As of July, 5% of U.S. Internet homes subscribed to at least one of these over-the-top streaming content services, and that rate rises to 7% of homes with a connected TV or attached content device. Current over-the-top programming includes HBO NOW, Showtime, CBS All Access, WWE Network, Sesame Street Go, Noggin, Lifetime Movie Club, and Shudder.



“Direct streaming subscriptions to network programming allows broadband providers an opportunity to generate revenue from services above and beyond their broadband offerings, while also further increasing the utility of connected TVs,” added Buffone. “As anticipated, we are already seeing uptake of these services by millennials at levels two times the norm. And, this trend is expected to continue as more networks make unauthenticated apps available to viewers.”



The NPD Group’s quarterly Connected Home Forecast report takes an in-depth look at the landscape of device connectivity in the United States, estimating how many connectable devices will be installed in consumers' homes and how many of those consumers will ultimately connect these devices to the Internet.



Read the full report here.