NEW YORK—Like many other parts of the economy, new data from S&P's Kagan suggests that inflation is putting a damper on streaming media device shipments.
Kagan, which is the media research group within S&P Global Market Intelligence, is projecting that global streaming media device shipments are expected to fall 1.2% to an estimated 80.0 million units in 2022 as inflationary pressures keep many consumers on the sidelines.
Kagan is predicating, however, that the market is expected to recover in 2023, with the global streaming media device (SMD) installed base growing from 232.6 million at the end of 2021 to 313.5 million by the end of 2026.
“The primary challenge to a steeper growth curve for SMDs is the persistent evolution in smart TV interfaces and processing power,” explained Neil Barbour, research analyst at S&P Global Market Intelligence. “As smart TVs become more capable streamers, there is less demand for external hardware solutions. SMD vendors appear to recognize the threat and have actively sought partnerships to deploy their operating systems on smart TVs.”
The analysis includes streaming media players, such as Apple TV, and streaming media sticks, such as Amazon’s Fire TV. This analysis does not include smart TVs, smart speakers, game consoles or other devices with ancillary video streaming functions.
Other key highlights from the study include:
- The surge in demand for internet video in the early days of the pandemic led to a flood of streaming media device (SMD) shipments, which drained volumes that would have otherwise emerged in late 2021 and 2022.
- Furthermore, chip shortages and complications in logistics have scrambled the low-margin hardware's business model. Consequently, vendors have been unable to substantively overhaul their product lineups, which has stalled growth in mature markets, or to significantly drop prices, which has stunted expansion campaigns in emerging markets.
- However, Kagan anticipates the market will return to growth as early as 2023 as market forces swing back in favor of low-margin hardware production. It is forecasting a 4.1% compound annual growth rate (CAGR) for SMD shipments from 2021 through 2026, enough to push the market close to 100 million units in 2026.
