• by Wayne Friedman , October 5, 2005

When more than half of U.S. TV households have digital set top boxes--projected to occur in 2009--cable operators can expect a boom in revenue from interactive TV, electronic transactions, and high-speed voice and data services, according to Kagan Research.

Total consumer revenues from all gaming, television commerce, and interactive advertising will hit $2.4 billion by 2009, with cable operators pulling in $780 million.

Kagan Research explains--as other analysts have said--that growing competition for video customers has pushed cable operators, satellite distributors, and Telco companies to search for other revenue sources apart from traditional monthly subscription TV fees.

The report says current U.S. interactive TV activity lags behind interactive TV business in Europe. But rapidly expanding technologies could bridge the gap between U.S. and European interactive TV businesses soon.

Still, there was some caution from Kagan's research, saying interactive software--the software that goes into the digital set top boxes--is in "flux." Many program listing, gaming, addressable advertising, and other software companies are fighting to become the standard for the new generation of digital set top boxes.

Kagan Research says that by 2009, it anticipates 69 million U.S. TV homes will have digital set top boxes.

Separately, Kagan Research issued another report projecting that cable operators' total revenue for high-speed data and voice services will hit $10.7 billion by 2009.