• by kyle , Daisy Whitney , October 14, 2009

Nothing can stop the arrival of the living room Web

Check out the living rooms of your neighbors in a few years and you'll likely find a range of consumer electronics devices powering the screen, such as gaming consoles, Apple TVs, Roku boxes, traditional cable set-top boxes and Internet-enabled TVs. Indeed, as television programming has become untethered from both the TV set and the cable subscription in the last few years, the stranglehold the set itself has had on the living room for more than 50 years has loosened, too.

And while industry experts love to hunt for the next winner in the battle to be the centerpiece of the living room, it's more likely there will be several victors, each demanding a spot as programming hub of the future.

Gaming consoles will rise in use, powered by their popularity with young adults, but they'll stand alongside a number of Web-to-TV devices, according to a recent report from In-Stat revealing that over 40 percent of the under-35 adult population in the United States already watches Internet video on their television sets.

Many of them are using a gaming console as the conduit, but consumers are also using media-center PCs, and the aforementioned Web-to-TV devices, to watch Internet-delivered content on their TVs, In-Stat said. Revenue from such Web-to-TV streaming services will grow to $2.9 billion in 2013, turning Internet-enabled consumer electronics devices into new advertising venues ready and eager to steal ad revenue from cable, satellite and telco operators.

"As Web-to-TV viewing increases, advertisers will shift their spending from broadcast content to on-demand content," says Keith Nissen, an analyst with In-Stat. "This shift in ad dollars will ultimately force the TV networks and the pay-TV operators to revise their business models around the hybrid broadcast and Web user experiences."

Already, some service providers are making noise about delivering their programming online to subscribers. Comcast and Time Warner have said they'll introduce online access to their services. They don't have much choice. The new class of Web-to-TV devices - with their attendant bells and whistles - could diminish the role of traditional service providers, who also sell ads on their channels. In-Stat projects that within five years, the number of u.s. broadband households viewing Web-to-TV content will hit 24 million, up from 2.5 million today. Already 29 percent of 25- to 34-year-olds with game consoles use the devices to watch streaming video off the Internet.

Microsoft recently announced upgrades to its Xbox that make it easier to watch streaming programming from the Internet at a higher quality. But while the gaming console is popular, it won't be the only winner. Computers connected to the tube and TV connected to the Web will also be found on your block.

"In the future, consumers will be acquiring digital entertainment from multiple sources, via multiple content-delivery networks, using multiple consumer electronics devices and viewed on multiple screen types," Nissen says. "In the near term, gaming consoles and media-center pcs will be the two main devices used for Web-to-TV viewing. In the 2011 time frame, Web-enabled TV and Web-enabled set-top boxes/media adapters will begin to dominate the market."

Additional research from the firm iSuppli backs this up. The company predicts worldwide shipments of consumer electronics devices capable of supporting Internet video will rise five times by 2013 when 376.5 million such devices will be shipped, up from 80.5 million last year. That includes televisions, set-top boxes from cable and satellite operators, Blu-ray DVD players and video game consoles.

Competition is a good thing for the consumer, and it also means advertisers will have more ways to reach their targets.