Web video on TV viewing rises sharply

By Robert Briel | May 22, 2009

An estimated 65 million households worldwide had the capability of viewing internet video on their television set at the end of 2008. This was 134% more than the figure a year earlier.

Households displaying internet video on the TV set via a game console or proprietary device comprised the vast majority of total internet TV households in 2007 and 2008, according to the IMS Research study Market Opportunities for internet video to the TV.

However, it is expected that households using a PC to deliver internet video to the TV set via a media centre PC and a media extender (or digital media adapter) will see an 85% compounded annual growth rate through 2013, reaching nearly 60 million households.

Shane Walker, research manager and author of the study, said in a statement: “Windows Media Center and media centres in general, along with extenders have seen limited uptake. However, their use will increase as prices drop and as more PCs with media centre-like characteristics replace existing PCs. These characteristics include multi-core processing power to increase performance, advanced entertainment management systems capable of delivering content to multiple screens, and support of internet-ready connectivity throughout the home.”

Media centre costs are expected to fall as much as 15% annually during the next five years. Walker continues: “Demand for media extenders will diminish shortly after 2013 as more advanced internet TV functionality is delivered via set-top boxes. However, media centres that are connected to the TV from a device other than an extender will most likely continue to grow beyond our forecast period, slowly replacing PVRs as consumers become more accustomed to managing large libraries of digital HD content.”

Retail devices such as DTT+IP boxes and Blu-ray players, which incorporate internet video from an online aggregator, will begin to affect the market by mid-2009. Growth will come from increased consumer awareness of these devices, as well as the ability to access multiple aggregators (current devices typically allow access to only one or two web aggregators).

An increased variety of devices facilitating internet TV is expected as a result from the Intel and Yahoo! Widget Channel venture, the growth of Miniweb Interactive’s platform in the UK, as well as new solutions such as Verismo, Sezmi and Zillion TV currently in trials.

IMS Research expects revenues for retail set-top boxes, Blu-ray players with IP connectivity and proprietary Internet TV devices to pass $1 billion (€724.7 million) worldwide by the end of 2010.

Nearly half of this total will come from Europe, with the Americas and Asia Pacific regions contributing significantly by the end of 2013.