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Over-the-Top Internet Video-to-TV Solutions Will Deliver $1.5 Billion in Service Revenue by 2012

While the majority of consumers who watch online video today do so on a PC, the ultimate destination for much of this content will be the TV. Hardware vendors in the gaming console, media adapter, and set-top box space are working to develop solutions that enable delivery of video content from the public Internet and connect it to the television.

“The biggest challenge for online video providers and consumer platform companies today is bridging to the TV,” says ABI Research director Michael Wolf. “Over the next few years new solutions from the likes of Apple, Netgear, and Sony will help cross this divide, making a la carte video download and viewing much easier. That doesn’t mean this transition will be an easy one: factors such as video quality, pricing of content, and technical glitches will persist for some time.”

In a recent ABI Research survey of online consumers, 12% indicated that they have purchased some form of video content delivered over the Internet. Of those, the vast majority (71%) watched this video on their PCs, while another 16% watched it on a TV using a burned DVD. Another 8% watched it using a gaming console as their video playback device. ABI Research believes that of all the consumer platforms for TV playback, video game consoles will lead in total revenue for public Internet video delivery, because of their close proximity to the TV, large hard drives, and the high penetration of online services among gamers.

Wolf concludes, “ABI Research believes that while Internet video delivery services for TV playback such as gaming consoles are only beginning to see public adoption, these devices, as well as products such as Apple TV, will ultimately create significant pay-content revenue opportunities if consumer platform vendors can provide easy-to-use solutions with good quality and large libraries, while offering attractive pricing options, whether subscription, download-to-own, or rental.”

ABI Research’s new Research Brief, Over-the-Top Internet Video to the TV (http://www.abiresearch.com/products/research_brief/Home_Networking_Research_Brie f/109 and http://www.abiresearch.com/products/research_brief/Digital_Media_Research_Brief/ 108, evaluates the available hardware and service options for public Internet video delivery to the TV. It examines both retail delivered devices such as gaming consoles, PVRs, and media adapters, as well as the integration of public Internet video download capabilities into carrier managed set-top boxes. It also forecasts North American active consumer systems that will use online video downloading and forecasts revenues for each platform type. This Research Brief forms part of two ABI Research Services: Home Networking (http://www.abiresearch.com/products/service/Home_Networking_Research_Service), and Digital Media (http://www.abiresearch.com/products/service/Digital_Media_Research_Service).

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in broadband and multimedia, RFID & contactless, M2M, wireless connectivity, mobile wireless, transportation, and emerging technologies. For information visit http://www.abiresearch.com, or call +1.516.624.2500.

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