The Impact of Streaming Services on Home AV Consumption

Introduction

In recent years, the streaming industry has seen explosive growth and transformation in the way consumers access and enjoy audiovisual (AV) entertainment at home. The rise of streaming platforms like Netflix, Hulu, Amazon Prime Video, Disney+, and others has significantly disrupted traditional delivery methods like cable television and in-home physical media. This blog will explore how streaming services have impacted home AV consumption habits and the audio/video landscape.

Rise of Streaming Popularity

Streaming services first began gaining popularity in the late 2000s with the emergence of Netflix as an online DVD rental service that also offered a limited streaming library. As broadband internet speeds and streaming technology improved throughout the 2010s, these platforms began rolling out larger libraries and original content to attract more subscribers. The convenience of being able to watch unlimited TV shows and movies on-demand from any internet-connected device helped streaming appeal to cord-cutting consumers looking to ditch expensive cable packages.

By 2015, SVOD (subscription video on demand) services had overtaken digital downloads as the main way consumers accessed movies and TV shows at home. The launch of Disney+ in late 2019 and other new competitors like HBO Max, Peacock and Paramount+ signaled the streaming wars had commenced in earnest. Today, streaming has become the most common method for Americans to access AV entertainment at home, accounting for over 80% of viewing time according to Nielsen. With more options than ever and competitive prices, streaming continues cementing itself as the future of home media consumption.

Decline of Physical Media

As streaming rose to prominence, physical media formats like DVDs and Blu-rays began a dramatic decline. Each improvement in streaming capabilities like higher resolutions, larger libraries, and original programming made physical discs less necessary or attractive for AV fans. Downloads on services like iTunes also helped accelerate the fall of physical media since consumers could now get flexible digital copies of movies and shows.

From 2010 to 2020, the physical media market in the US dropped by over 80%, with home video sales declining by over 60% in that span. Rental kiosks like Blockbuster also disappeared as streaming eliminated the need to leave home. By 2023, physical media is projected to account for less than 10% of the overall home video market worldwide. While some collectors and audiophiles still value Blu-rays for features and quality, streaming has completely dominated as the primary format consumers use to watch content at home.

Effect on Cable Companies

The cord-cutting trend enabled by on-demand streaming has hit cable providers and satellite TV companies tremendously hard over the past decade. As more consumers opted to ditch cable bundles in favor of less expensive SVOD plans, pay-TV subscriptions declined by around 25 million households between 2010-2020. Live sports remain one of the few anchoring tentpoles still attracting cable subscribers.

In response, providers like Comcast and DirecTV have invested in their own streaming platforms while tightly integrating broadband internet services. Many cable companies now offer skinny bundles with only local broadcast channels and a select number of popular cable networks at a lower price point. However, cord-shaving and cord-nevers continue driving significant subscription losses that outweigh new OTT streaming subscribers gained. Overall programming costs have also gone up for cable providers to outbid streamers for content. As internet-based TV becomes firmly established, cable companies face disruptive challenges to their legacy business model.

Impact on Home Theater Equipment

With streaming bringing AV content direct to televisions, the need for external devices has declined dramatically. Devices like DVD/Blu-ray players, DVRs/PVRs, and many media streamers are becoming obsolete as built-in Smart TV apps make external boxes redundant. Sales of disc players declined over 50% from 2015-2020 alone. However, the highest-end home theater enthusiasts still utilize external players/receivers for superior audio/video quality and expanded features.

Smart TVs have experienced a huge boom, rising above 50% of the TV market worldwide in 2020. As panels offer better picture processing, integrated streaming apps, and voice control, the functionality of connected TVs removes the need for separate media boxes in many homes. Streaming sticks from Roku, Fire TV and Chromecast remain popular cheaper options to add streaming to older displays. But most new TV releases are Smart TVs with 4K/HDR streaming support. This shift has greatly simplified home theater setups.

Impact on In-Home Viewing Habits

By delivering movies and shows on-demand through internet connections, streaming has transformed how consumers watch AV content within their homes. Binge-viewing whole seasons of a show in one sitting became common practice as people looked to maximize their subscriptions. Having so much choice at your fingertips also enabled sampling lots of different genres and programs.

Pausing and resuming content anywhere added flexibility too, as people could watch episodes across multiple devices throughout their homes and on mobile. Carefully curating watchlists and personalized recommendations also changed the way consumers navigate media libraries compared to traditional linear TV schedules. These viewing pattern changes gave streamers data insights to refine programming strategies and ad formats.

Device proliferation allowed for content to be streamed throughout homes on phones, tablets, computers, gaming consoles, streaming boxes/sticks. Showcasing the same streaming library across multiple rooms made it easy to continue viewing on any display available. Popular media hubs like the Apple TV offer wireless AirPlay 2 screen mirroring for seamless multi-room viewing as well. This amplified consumption within households greatly benefits streamers.

Rise of AV Formats and Specifications

To keep pace with improvements in modern displays and stay competitive, streaming services focused on rolling out support for higher resolutions, expanded color, and object-based audio formats over time. 4K streaming launched alongside new Ultra HD TVs a few years ago, followed by support for high dynamic range (HDR) video with wider color gamuts. Dolby Vision and HDR10 are now common on the top platforms.

Object-based immersive standards like Dolby Atmos are also gaining popularity for a more enveloping surround sound experience. Expanding mobile resolutions up to 4K on select titles keeps mobile viewing on par with televisions as well. Streamers continually upgrade video/audio capabilities in catalog content and new releases to match advances in home theater equipment quality. This fosters continued long-term growth for both the streaming and display/home audio industries.

The Future of Streaming

With streaming now an well-established cornerstone of home entertainment, further innovations are being explored to enrich the viewing experience. Advanced AI and personalization tools will optimize recommendations and interfaces. Higher frame rates up to 120fps may come to major platforms. Expanding streaming bandwidth capacity through technologies like 5G could allow 8K resolutions and 3D/360 video.

As virtual/augmented reality devices mature, streaming VR content directly to headsets is gaining interest. Experimental offerings like Netflix VR are testing new narrative forms. Lossless/High-Res audio with CD-quality sound may find an audience as well for audiophiles. Live sports remain an area of opportunity, with new OTT services like FuboTV proving viable.

While the exact path forward remains unclear, one thing is certain - streaming services will continue innovating to capture more share of consumer budgets and keep home AV viewing engaging for years to come. Their impact has resonated throughout the entire media landscape in a relatively short timeframe. As technology advances, streaming's central role in how people access entertainment media at home is unlikely to diminish any time soon.

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