According to the The Diffusion Group, revenue from the on-demand delivery of Internet video to the TV will grow from $621 million in 2009 to $2.1 billion by 2014, accounting for more than 25 per cent of total annual video-on-demand revenue.
Fuelling this trend is the rapid diffusion of ancillary web-enabled platforms such as game consoles, Blu-ray players, and hybrid set-top boxes. While TVs with embedded broadband support are only now arriving in retail channels, the widespread and growing penetration of secondary platforms will set the stage for a rapid uptake of Internet-to-TV video services, both pay-per-view and subscription-based.
“To put this into perspective, most industry estimates predict by 2014 US DVD rental revenue will exceed more than $8 billion,” notes Dixon. “By that time, OTT video rentals will top $2 billion, accounting for 25 per cent of home video rentals. If that fails to warn companies like Blockbuster and Time Warner Cable as to the magnitude of this threat, they are asleep at the wheel.”