Connected consumers not plugging in but spike expected in VOD, EST online revenues

Editor ©RapidTVNews | 05-12-2011

The increased adoption of connected TVs, Blu-ray players, game consoles and streaming media players is driving a huge upturn in online TV revenues, even though only a fraction of consumers actually connects it to the Internet.

According to the NPD In-Stat report, OTT Video: Content, Devices, Retail, and Pay-TV Collide, about 17 million US households already own a connected TV and ownership of streaming media players is said to have nearly doubled since the end of 2010. Yet the survey also warns that only a fraction of consumers that own an Internet-capable TV device actually connects it to the Internet to become over-the-top (OTT) video consumers.
That said, the analyst bullishly predicts that the growing base of OTT households is propelling the revenue for online video-on-demand (VOD) and electronic-sell-through (EST) Indeed, In-Stat expects the collaborative and competitive models among physical and digital retailers, content owners, and pay-TV operators to realign themselves as players in the ecosystem grapple with the evolving mix of physical versus digital channels, EST, pay-TV, OTT, and subscription VOD (SVOD) to double by 2015.
The report calculates that streaming video transactions will reach just under 1 billion in 2010 and that Netflix and other subscription VOD suppliers are shifting to a more TV-centric model to compete more directly with HBO, Showtime, and Starz.
“OTT video is continuing to grow, overcoming the barriers of low device connect rates and cumbersome user interfaces,” explained Keith Nissen, Research Director. “Even stronger growth of I-VOD and EST video services is possible if device manufacturers and digital retailers can put together a simpler, plug-n-play solution for getting online video to the TV (web-to-TV). The proliferation of tablets is also contributing to OTT growth.”