Demand for iSTBs strong, especially among millennials

Tuesday, March 25th, 2014
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New TDG Research Suggests Millennials More Likely to Purchase Internet Set-top Boxes as a Means of Supplementing or Replacing Traditional TV

According to new research from The Diffusion Group, 14% of broadband households currently use an Internet set-top box such as Roku or Apple TV to access over-the-top (OTT) video content on their television. Internet set-top box use is especially prominent among Early Millennials (age 25-34) and Late Boomers (age 45-54).

As noted in TDG’s latest report, A Primary Profile of Internet Set-top Box Users & Intenders, 29% of adult broadband users are to various degrees likely to purchase a new iSTB in the next six months. Interestingly, 48% of current iSTB users are to various degrees likely to purchase another iSTB, a very telling statistic.

“The fact that current iSTB owners are significantly more likely than non-owners to buy an iSTB speaks volumes about the multi-room future of iSTBs,” notes Michael Greeson, cofounder of TDG and director of research. “This in no way diminishes the extent of new demand, but it speaks to the fact that once a household owns an iSTB and understands its benefits, they want it on all their TVs. As well, it appeals to operators looking for an inexpensive, consumer-subsidized way to expand their advanced digital TV services to other rooms of the home. This is positive news for both iSTB and ‘Internet stick’ vendors.”

Late Millennials (18-24s) are rightly a strategic priority for operators and networks, though when it comes to Internet set-top boxes, Early Millennials (25-34s) require a closer look, with 21% highly likely to purchase.

“The target for new iSTB sales is a broadband user in their late twenties or early thirties, not the 18-24 segment that many are targeting. The youngest group is keen on the benefits of an iSTB, but they use a net-to-TV device they already own, most likely a game console.”

Greeson argues that, for iSTB vendors, there should be two different messages for two different segments – one for the younger, highly-educated, on-the-move Millennial, and one for a less technologically-sophisticated pragmatist looking for a way to bring online video content to their television.

TDG’s latest insight into the net-to-TV segment, A Primary Profile of Internet Set-top Box Users & Intenders, is now available for purchase. The report offers a detailed demographic and media-centric behavioral profile of those that currently own and use an iSTB; those likely to purchase a new iSTB in the next six months; and adult broadband users in general.