Technology | Media | Telecommunications

Saturday, October 09, 2010

Low-Cost OTT Pay-TV Fuels New CE Demand


eMarketer reports that Americans are viewing movies online more frequently, increasingly adopting low-cost over-the-top (OTT) pay-TV subscription services, such as Netflix. Moreover, online viewing of full-length TV episodes is on the rise and accounting for a greater share of consumer attention.

With these changes in video entertainment viewing habits, mainstream consumers will increasingly look to enjoy these new experiences on a big TV screen. Two recent forecasts project a dramatic growth in sales of internet-enabled television sets around the world.

iSuppli Corporation estimated in July that 28 million web-enabled TVs would be sold worldwide this year -- more than double the sales in 2009. By 2014 they're forecasting a 428.6 percent increase to 148 million units sold.

DisplaySearch has a higher estimate of connected TV sales for 2010, at 45 million units worldwide, and a more conservative projection for 2014 at 119 million units. However, that still translates to growth over the same period of 164.4 percent.

eMarketer notes that while the unit forecasts may be different, there's agreement on a dramatic growth curve for consumers seeking to connect their primary television to the Internet. In fact, a Retrevo market study indicates that many consumers in the U.S. have either already connected their TV to the web or are planning to do so.

"Nearly a quarter of U.S. Internet users have already connected their TVs to the internet and another quarter would like to," said Paul Verna, eMarketer senior analyst.

"That means that if the number of people who wish to connect their TVs did so, the universe of web-enabled TV would be approximately 108 million viewers -- using eMarketer's estimate of 221 million U.S. internet users in 2010."

This demand creates a huge opportunity for consumer electronics (CE) manufacturers to deliver this connectivity and easy-of-use in affordable ways -- whether through IP-enabled TVs directly, retail set-top boxes like the Roku player, Blu-ray disc players, game consoles or any combination of the above devices.