Internet-Connected TV To Grow 36% By 2016

by Wayne Friedman , July 26, 2011

Netflix-

New bells and whistles on Internet-connected televisions aren't going to waste, according to a new survey. Turns out they are being used regularly.

Over 60% of Internet-connected TV households use TV apps at least once per week, according to Scottsdale, Ariz.-based In-Stat. New wave TVs allow consumers to connect with Netflix, YouTube, Facebook, and more.

"As expected, Netflix and YouTube currently dominate the TV application space," says Keith Nissen, research director at In-Stat. "But as Netflix competitors become more numerous and as applications are optimized for the big screen, TV apps will become part of the mainstream TV viewing experience."

Right now, In-Stat says 22% of U.S. TV households already own an HDTV with integrated TV apps. Connected TVs with integrated TV applications will grow by an average 36% over the next five years.

Still, the survey says TV apps are not the primary reason for purchasing connected TVs -- and that consumer behavior of these new TV apps doesn't lead to more purchasing of other video content, especially when it comes to customers of Netflix.

In-Stat says consumers now favor both traditional pay-TV and online video services, which have risen to 30% in 2010 from 18% previously.

In regard to DVR use, the research suggests playback of DVR programming does not lead to increased use of free video-on-demand services from a TV programming service.

apps, internet, streaming, television, tv

2 comments about "Internet-Connected TV To Grow 36% By 2016".

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Bill Young from Electronic Arts, July 27, 2011 at 4:06 p.m.
36% in total (as the headline conveys)...or per year (as the article seems to imply)? If you mean 36% in total by 2016, that's a vast underestimation.
I'm normally on the skeptical side of any prediction like "something will grow by X percent by Y date," because the prediction is usually made in almost hyperbolic manner. I don't know if i can remember a time where i felt that number was so incredibly below my expectations...yet written as though it was a lofty goal.
Of course...maybe you meant 36% per year, in which case...nevermind. Though you may want to edit the headline if that's the case.
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John Grono from GAP Research, August 14, 2011 at 11:11 p.m.

I tend to agree Bill - its looks like average annual growth of 36%.

However, if penetration is already 22%, 36% p.a. growth means that in 5 years time penetration will be 102% due to the exponential growth curve that underlies the reliance on average growth rates.

So we have three scenarios:
1. it is 36% growth p.a. = 102% penetration (impossible)
2. the growth is from 22% to 36% (which I agree looks too low), or
3. the growth is 36% across the 5 years = 30% penetration (even harder to believe.

I'm unsure whether this is poor prognostication or poor reporting.