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Connected TV services to grow despite economy

The market for video on demand via connected online Internet services will increase nearly fivefold by 2013 when compared to the levels forecasted for 2009.

Responding to a series of questions from IPTV Update following the release of “From Boob Tube to YouTube: Consumers and TV,” Kurt, Scherf, Parks Associates VP and principal analyst, identified VOD via online sources and devices like the Netflix Player by Roku, the Xbox 360 and TiVo as being poised for significant growth.

“We are projecting revenues from transactional rentals and downloads to grow from $963 million in 2009 to $5.9 billion by 2013,” he said.

According to the Parks Associates report, video-on-demand offerings and TV widgets will propel consumer adoption of televisions that connect to the Internet via a separate device or by themselves. The report found that 50 percent of respondents to a Parks Associates poll said they are interested in receiving TV shows, movies and other premium Web content. Additionally, 33 percent said they are interested in accessing news, weather and other information from their TVs using widgets.

Interest in connected TVs won’t be tied exclusively to accessing VOD content and clicking on TV widgets, however. Further down the road will be the integration of social networking with television, Scherf said.

“I would expect that features related to social networking, such as Facebook widgets and friend or family recommendations for TV programming, will appear within a couple of years,” he said. “I think this will happen both on the service provider side of the business (Verizon, AT&T, Comcast), as well as the connected TV's.”

Parlor and casual games also are likely to find viewer appeal on connected televisions, he said. While Parks Associates is bullish on the prospects for connected TVs in the long run, in the nearer term, the ongoing economic pullback is likely to impact consumer behavior and entertainment spending.