Android TV Could Roil Streaming Market – IHS

Google's new Android TV platform could disrupt the streaming media player landscape, while fueling even faster growth in the emerging market, according to a new research report.

In the report released Monday, IHS Inc. predicts that the forthcoming Android TV software release could particularly hurt Roku Inc. , the early leader in the streaming media player market, and Amazon.com Inc. (Nasdaq: AMZN), which entered the market earlier this year with its Fire TV player. However, IHS believes that Apple Inc. (Nasdaq: AAPL)'s Apple TV, currently the number-two player in the media streaming market, will be relatively spared.

That's because Apple TV is "backed by a strong content ecosystem and a near-captive iOS customer base that grows with each record-breaking iPhone release," IHS said. Roku, on the other hand, "lacks similar direct integration with an ecosystem," while Amazon's Fire TV limits content search-and-discovery results to Amazon-sourced content and favors the company's own tablets over other brands.

IHS also believes that Google (Nasdaq: GOOG)'s Android TV could roil the market by equipping smaller, lesser-known hardware vendors with a complete, ready-made platform for streaming media player use that delivers a range of benefits. In the past, Android-based offerings from low-priced competitors have typically "lacked the refinement, functionality, ecosystem, and user experience to compete head-to-head with products from Roku or Apple," noted Paul Erickson, senior analyst for the connected home at IHS. (See Can Google Get TV Right?)

Up to now, Roku and Apple TV have dominated the evolving streaming player market, although Amazon Fire TV is starting to make inroads. IHS estimates that the two leading players had a combined 94% market share in 2013.

With the entries of Amazon Fire and Android TV, IHS sees the number of installed streaming media players in the US jumping to 24 million units this year, up from 16 million in 2013 and 10 million in 2012. The research firm predicts that the number of installed players will nearly double again by 2017, reaching 44 million units.

With the US accounting for nearly half of streaming media player sales worldwide, IHS sees the global installed base growing at a similar pace. For example, the firm figures there will be 50 million media players installed around the world by the end of this year.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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