Technology | Media | Telecommunications

Monday, June 15, 2009

Video Game Consoles Enable OTT Adoption

The range of connected consumer electronics devices delivering over-the-top (OTT) video into the living room is growing. Device types include digital media adapters (DMAs), pay-TV set top boxes, Blu-ray player or recorders, HDTVs and media-center PCs.

However, networked video game consoles are currently the most utilized devices for bringing web video to the TV -- and will remain so through 2013. By 2013, over 10.7 million consoles will be used as Web-to-TV mediation devices in the U.S., according the the latest In-Stat market study.

While still at the early adoption stages, the impact of bringing web video to the TV will bring both opportunity and threats to a range of companies in the traditional electronics and TV markets. By 2013, the revenue from Web-to-TV streaming services will grow to $2.9 billion.

"Currently Web video is largely additive to traditional TV revenue streams," says Keith Nissen, In-Stat analyst. "However, ultimately web video to the TV will force a complete restructuring of today's video distribution ecosystem."

Service provider decision makers that are responsible for approving an additional investment in IPTV infrastructure therefore need to reconsider their prior market development strategy, in light of this growing trend.

In-Stat's market study found the following:

- Two separate in-home content delivery networks (CDNs) are evolving in the digital home -- one for broadcast media services (e.g., cable TV), the other for Internet-based broadband services.

- Within five years, the number of U.S. broadband households viewing Web-to-TV content will grow to 24 million.

- Already, 29 percent of U.S. 25 to 34 year olds with game consoles use the devices to watch streaming video off the Internet.

- Video content will be optimized for broadcast or Web-to-TV based on content type.