“4K streaming devices are just entering the market in the highest end products,” said Sam Rosen, Managing Director and Vice President at ABI Research. “4K streaming devices represent about 35 per cent and 24 per cent of streaming device shipments in North America and Western Europe, respectively, in 2017. However, as penetration of 4K TVs grows, so will the revenue opportunities from Ultra HD definition purchases and rentals, as well as premium early release content.”

These trends are being underpinned by a strong shift towards streaming for operators as they acknowledge their inability to stem cord cutting from their legacy services in many leading markets, especially the US. A recent study from The Diffusion Group (TDG) showed that in the US about half of all lost subscribers to traditional pay TV over the last decade had cut the cord in the past two years and 31.1% had done so in the last 12 months. Leading satellite operators seem to have taken the most drastic measures along the lines of “if we can’t beat them join them”, with Sky for example having announced that it would make its entire channel lineup available online without requiring a satellite dish via its Sky Q box from sometime in 2018.

Such services are also being enriched by incorporation of third party offerings such as Netflix and YouTube within the package. “Video streaming services are increasingly becoming a replacement alternative for traditional pay-TV services as operators partner with third-party OTT players or start to offer standalone streaming services, such as Dish Network’s Sling TV and Now TV by Sky in Europe,” said Khin Sandi Lynn, Industry Analyst at ABI Research. Combined with this content expansion subscribers are being attracted by the abundance of low-cost and no-contract video streaming services, which again is stimulating the media streaming device market, Lynn added.

One question then arises is whether in the online era operators will still be able to retain the same control over subscribers through dedicated streaming boxes issued by them as part of the package under the traditional model. ABI Research reckoned not, although without hard evidence through consumer feedback. Operators will have to embrace retail streaming devices and rely on the security provided via Trusted Execution Environments (TEE), since they will no longer have control over the box throughout its lifecycle from the point of manufacture. By this calculation, the model proposed by Sky will be the exception, with most streaming devices being like smart TVs, able to access multiple streaming services.

Another question is what is strictly meant by a 4K box when the likes of ABI Research use that term. Originally 4K was synonymous with the Digital Cinema screen resolution of 4096 x 2160 pixels, but then came to be associated with the emerging standard for Ultra HD TV of 3840 x 2160. But ABI Research uses the term loosely for the evolving standards defining Ultra HD or immersive TV, with HDR (High Dynamic Range), Wide Color Gamut (WCG) and in future HFR (High Frame Rate) being essential ingredients in addition to the higher resolution. By 2022 streaming devices may still not deliver HFR but most likely they will support all the other components.

Current leading streaming devices open to third party online content include the Roku Streaming Stick, Apple TV, Amazon Fire TV and Google Chromecast Ultra.