I Want my IPTV! The Growth of the Connected Television

Nielsen - As new ways to consume media give viewers greater choice of how, when, and where to watch, an old standby—the television—is making headway in the race for market cachet.

Americans spend 35 hours each week watching content across screens, and 94 percent of that is still on a traditional television. With that in mind, it’s no wonder that Internet Protocol TV (IPTV), which allows viewers a direct connection to video that is watchable on the living room TV but streamed from the Web, is gaining traction.

“’Internet Protocol TV’ has grown dramatically over the course of the last year. People talk about ‘the TV is dead, or that it’s dying,’ but it doesn’t look like it yet,” said Pat McDonough, Nielsen’s SVP Insights Analysis and Policy.

Traditional TV distribution—such as broadcast or cable—and watching on a TV set continues to be the dominant means of ingesting video content. Much like eReaders, which saw small but noticeable gains in penetration in the last three quarters of 2011, but have since made nice strides and has Q1 2012 penetration at 21 percent, IPTV seems to be following suit and market penetration is on the rise. As of February 2012, 10.4 percent of homes had an IPTV, compared to just 4.7 percent that same month a year prior, according to a recent Nielsen study.

The emergence of IPTV is one of a growing number of viewing options to emerge over the past decade and continues to compete with a gaggle of other advances for market share. Unlike other burgeoning tech-sector technologies, IPTV functionality is being built right into current and future generations of televisions, which could drive an increase in usage as penetration increases.

In October 2011 the use of the Internet feature in IPTV-enabled homes was estimated at about 2 percent of their TV use. In February 2012 it jumped to about 5 percent in Internet-enabled homes.

While traditional TV is still the major player in most households, viewing options are ever-evolving. DVRs now appear in 44 percent of homes, up almost 80 percent since 2007. Conversely, some devices—once seen as tech breakthroughs—are falling off. VCRs and DVDs are down over that same time period, serving as a reminder to marketers, manufacturers and consumers alike that the only constant is change.

 

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