Technology | Media | Telecommunications

Tuesday, February 23, 2010

Consumers Shift to Connected TV Scenarios

U.S. video content producers say they're determined not to follow in the footsteps of the music recording industry, and for good reason. When consumers send you a signal that demand is shifting, you need to be ready and willing to adapt -- with an open mind.

Nearly 37 percent of broadband households in North America are extremely or very interested in viewing Over-the-Top (OTT) video content on the Connected TV, according to the latest market study by In-Stat.

Yes, this is a significant shift in consumer behavior.

While DVD media demand is in decline, the online demand is growing as companies such as Amazon, Hulu, Netflix, and Apple, offer streamed or downloadable TV episodes and movie content.

Similarly, a growing set of web-enabled TV devices are now proliferating across device categories that include digital TV sets, Blu-ray Players, Digital Media Adapters (DMAs), network attached storage, and set-top boxes (STBs).

"By 2013, In-Stat predicts that nearly 40 percent of all digital TV shipments will be web-enabled devices," says Norm Bogen, In-Stat analyst.

Across all categories, there will be over one-half billion web-enabled consumer electronics (CE) devices in operation worldwide by 2013. Shipments of such web-enabled devices will see a compound annual grow rate (CAGR) of nearly 64 percent between 2008 and 2013.

At this point in time, the online consumption trend seems to be very apparent to all but those who still remain stuck in denial. Meanwhile, even the traditional movie rental business model is being disrupted, as Redbox continues to gain market momentum renting DVDs for $1 per day.

In-Stat's market study found the following:

- In 2009, there were five broadband households worldwide for every web-enabled CE device. By 2013, this ratio will be 2:1 or possibly higher.

- In-Stat's consumer survey indicates that over half of U.S. consumers with network-connected Blu-ray players or recorders use Wi-Fi, while 30 percent use Ethernet for connectivity.