• by Jack Loechner , Staff Writer @mp_research, September 6, 2005

A new study from Kagan Research projects that 69 million (59% of) digital subscribers will be equipped with interactive platforms by 2009, accounting for more than half the TV households in the U.S. Interactivity is expected to expand either through growth of the installed base of set-top boxes or via functionality integrated into digital television sets. Growing competition for video customers has focused cable operators, satellite operators and telco carriers on developing interactive services capable of generating revenue and reducing churn.

Kagan Senior Analyst, Ian Olgeirson, says "The debate over the future of interactive TV has shifted from if there is a marketplace to what applications should be introduced first and how quickly."

Kagan estimates total revenue for electronic transactions conducted via games, television or t-commerce and interactive advertising will reach $2.4 billion by the year 2009.

The interactive services segment will also contribute to the bottom line for cable, DBS and telcos. Kagan estimates interactive services will generate $780 mil. in operator revenue by 2009.

While the revenue outlook for these types of interactivity is limited when compared to VOD and DVR technologies, says the report, the three categories will help drive subscribers to the platform and are expected to generate significant incremental revenue.

For more information on the availability of the report, go here.