Parks Associates: Could you tell me about the changing role and revenue potential of connected CE?

Barbara Kraus: Connected CE, until a few years ago, simply meant a hardware device that could connect to the Internet, and manufacturers made their money from unit sales. Now, with connections and the ability to stream video and music to your TV, manufacturers have several opportunities for new revenue streams, such as advertising, content promotion, content placement, and even selling the buttons on their remote. For example, Vizio has a remote button for Netflix which will take you directly to the Netflix app on your Vizio TV. This evolution is a result of changes CE manufacturers have made to their products, like new features and functionality, as well as new revenue streams, and how manufacturers are generating revenue from new opportunities.

Our research shows broadband households in the U.S. are more likely to use a Roku device than an Apple TV. What's going to be interesting, though, is Amazon Fire TV, introduced less than four months ago. It's going to be interesting to see how that works into the mix. Will more people use an Amazon Fire TV than a Roku? And what will Apple do to continue to gain ground?

PA: What do you see happening?

BK: Well, Apple is looking at some additional functionality, and it’s  rumored that Apple is considering gaming for the next update of their Apple TV. Don't get me wrong, they've done very well globally—they've sold 20 million in Apple TV units, more than any other company but sales lag those of Roku and Google Chromecast in the U.S. Amazon, on the other hand, has 20 million Prime customers, which is a very large base for marketing, not to mention 244 million active accounts. There's no doubt that Fire TV is going to tie in with some of the other services Amazon has, such as their e-commerce business. And it already has several features that the other streaming media devices don't have, such as voice control and different ways of finding things. So I think the Fire TV should prove to be a very strong competitor. The question is, is it going to impact Roku or Apple more?

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Barbara Kraus joined Parks Associates in early 2013 and currently studies the connected consumer electronics field. Barbara’s expertise is delivering and monetizing consumer insights through the provision of compelling product and service technologies and experiences.

Barbara’s background includes more than 10 years with technology service providers in the telecom and home security industries in marketing, strategy and insights, operations, and business development. She also worked for EDS, now HP Enterprise Services, in market intelligence and large-deal sales support. Barbara received her bachelor’s degree in liberal arts from the University of Kansas and MBA from WSU.

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Industry report available for purchase: The Evolving Market For Streaming Media Devices

Further reading:

• More U.S. Households Use Roku vs. Apple TV or Other Streaming Video Media Devices
• Streaming Media Usage Up, Use of Chromecast Declining in 1Q 2014
• 34% of U.S. broadband households have a smart TV
• 360 View: Connected CE Adoption & Trends
• New consumer research proves Amazon gaining traction in connected home technology market

Barbara Kraus in the news: 

Roku Beats Out Apple TV In U.S. Media Streaming
"The percent of households using Roku has gone up by 7% in the past year. Part of the upward shift is due to an increased awareness of media streaming as a viable alternative to traditional TV, Parks Associates analyst Barbara Kraus told Mashable."

Roku beats Apple TV -- again -- on usage, purchases
"In US households last year, nearly half of all purchases of set-top boxes -- small electronic devices that stream online video and music on your TV -- were Rokus, and Roku devices continue to show the greatest usage among people who stream media to their TVs."

Media requests to talk with Barbara or to review specific research data can be directed to Holly Sprague at [email protected]. To purchase research, contact [email protected].