Control the television and you will control a large portion of the streaming video market.

While people watching streaming video had been evenly split between television and computers in 2012 and 2013 (with people watching on handheld devices a distant third), TV has become the overwhelming choice. And the overall number of people watching streaming content at all has increased, as the chart below shows.

Technology has made it possible. 

Nearly two-thirds (62%) of TV content viewers now either own a Smart TV or can stream content to their TV through another device, Horowitz Associates reported in its annual State of Cable & Digital Media study. One-third (31%) of respondents said they spend at least some TV viewing time streaming broadband content to the TV set, and TV content viewers said they spend two in 10 viewing hours streaming content, compared to 13% in 2013. 

"The fragmentation of viewing in the age of digital media is not a new conversation. But OTT boxes, gaming consoles, Blu-ray players, and now, devices like Google Chromecast are taking the conversation to the next level," said Adriana Waterston, Horowitz senior vice president of marketing and business development.

This increasing willingness and ability for people to stream to their television sets is one of the many challenges facing traditional broadcast and cable networks and dramatically raises the stakes in the battle to control the living room entertainment experience.

Who are the contenders?

In addition to Smart TV -- that is televisions with the capacity to access streaming digital content apps -- streaming content can be accessed over a number of devices, including Apple (NASDAQ:AAPL) TV, Microsoft's (NASDAQ:MSFT) Xbox, Sony's PlayStation, Amazon's (NASDAQ:AMZN) new Fire TV, Google's (NASDAQ:GOOG) Chromecast, and Roku's players, among others.

CEO Tim Cook admitted to investors earlier this year that Apple's set-top box was now a billion-dollar business, and the previous versions of Microsoft's and Sony's games consoles -- the Xbox 360 and PlayStation 4 -- have sold around 80 million units each (though many are likely not still in service). Even Roku, the little guy in this fight, announced it had sold 8 million players as of February 2013, re/code reported.  

Not every person streaming digital content is using one of these devices. Some use Smart TVs, some get access to apps through Blu-ray players, and others find ways to stream directly from a computer. But offering a set-top "box" (which includes consoles and sticks) to stream content is clearly a growth business in which the ultimate winner has yet to be decided.

What are they offering?

The most challenging thing in predicting the winners is that the main contenders are offering vastly different devices.

Sony and Microsoft are offering full gaming consoles that also serve as entertainment centers offering access to apps, movies, paid downloads, and other content. Sony's PlayStation 4 costs $399 while Microsoft's Xbox One goes for $499.

Apple TV, which offers a robust selection of content choices, easy access to iTunes and other Apple content, and an interface familiar to Apple fans, costs $99.

Amazon's Fire offers gaming plus easy access to the online retailers' Prime Instant Video content (for Prime subscribers), as well as simple integration with the Amazon shopping experience for $79 (for now) with a gaming controller being offered for $39.99.

Google's Chromecast offers a stripped-down but functional device for $35. And Roku has products ranging from $49.99 for its stick to $99 for its top-of-the-line player.

All of these products have their pluses -- which one you buy depends on what other technology you own and what services beyond streaming content you are looking for. Buying an Xbox One or a PS4 mostly to stream Netflix would be silly, but if you want a gaming experience as well then the Apple, Google, and Roku devices won't deliver everything you want. The Amazon product is a nice hybrid offering casual gaming as well as a robust digital streaming player with lots of choices. 

Why these companies want access to your living room

The market for selling streaming video through rentals and app subscriptions is growing and will get even bigger as more pay services enter the market. In general the maker of the set-top box takes a share of revenue when either a video (like a movie rental) is ordered or a subscription to an app or service is initiated. If you are already a subscriber to a service like Netflix, the set-top box company does not share in the revenue even if it delivers the content.

According to numbers released by the consortium of Hollywood studios and electronics makers, The Digital Entertainment Group, in January digital sales of movies and TV shows rose 47% to $1.2 billion, while subscription streaming spending rose 32% to $3.2 billion. The overall rental market, however, was $18.2 billion in 2013 and those dollars are likely to become mostly digital going forward.

Whatever audience the streaming box providers capture offers those companies a chance to not only win a portion of the business detailed above, but a chance to sell directly to users. Roku mostly passes on other people's services, but Apple, Amazon, Microsoft, Sony, and Google all have dedicated stores that offer huge revenue opportunities. Whether it's a video from iTunes or games from Sony, Microsoft, or Amazon, being in the living room allows companies to sell products without a middleman. 

Now that people are becoming more comfortable streaming directly to their TVs, the opportunity to sell movies, games, and other content should continue to grow exponentially. Once a person has installed a digital streaming box it effectively becomes a little store (complete with dinging cash register) that sends a steady stream of revenue back to its maker.

Daniel Kline is long Microsoft. He is currently using Fire TV in his living room, but owns a Roku player, a Chromecast, and an Xbox 360. The Motley Fool recommends, Apple, and Google (C shares). The Motley Fool owns shares of, Apple, Google (C shares), and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.