Sales of Internet-connectable TV devices soaring to 350 million by 2015

Consumer desire for on-demand and online video content will motivate sales of Internet-connectable TV devices to nearly 350 million units worldwide by 2015, setting the stage for intense competition in app development.

Parks Associates' Connected Living Room: Web-enabled TVs and Blu-ray Players forecasts worldwide sales of Internet-connectable HDTVs, Blu-ray players, game consoles, and digital video players such as Roku and Apple TV will grow approximately fourfold from 2010.

The market has reached the fourth generation of connected TVs, and all major manufacturers are debuting new models at CES with innovations in content aggregation, apps development, and user interfaces. Content options are finally catching up to the hardware innovations, and growing libraries of on-demand movies and TV available are starting to unlock the potential of connected TV devices as multifunction online entertainment and communications platforms.

The expanded presence of these devices will increase opportunities for apps developers – including third-party developers and giants such as Google, Samsung, and Yahoo! Consumers will also be key in deciding whether a controlled apps environment or the open-browser approach advocated by Google will be the dominant model for the connected TV market in the next five years.

Companies across the value chain – including content aggregation, broadcast television, delivery and management, CE, pay-TV providers, and retail – have significant opportunities to deliver content to a large number of new devices.

Access to premium and user-generated video is a main driver for adoption and use of Internet-connectable devices. Access to streaming music, online photos, social network updates, personalized news and information, and simple games are also popular features for current users and likely buyers.

The market for Internet-connectable device sales over the next five years has a strong international focus. With pay-TV penetration lower in certain European and Asia-Pacific markets and with the broadcast television community showing strong interest in supporting technologies for interactive television, connected TV devices will become de facto set-top boxes in many of these countries. At the same time, today’s pay-TV providers will embrace the delivery of managed video services to connected TV devices to differentiate, increase customer satisfaction, lower capital expenditures by deploying fewer set-top boxes, and reach new bases of customers.