Networking devices to surge on TVs, DVD players

Game consoles remain primary U.S. connection device

By Danny King -- Video Business, 7/2/2008

JULY 2 | Worldwide networking devices will more than triple in the next four years as more TVs and DVD players are connected to the Internet. Videogame consoles will continue to be the most prominent method North Americans use to transfer online videos to TVs, while set-top boxes such as Apple TV and Hulu will gain in popularity, an executive with research firm ABI Research said last week.

Almost a half-billion media devices will be connected to the Internet in 2012, up from 150 million this year and less than 100 million in 2007, said Michael Wolf, research director at ABI Research, in a conference last week. About 70 million TVs will be connectable in four years, up from 5 million this year, while the use of DVD players for network connections will more than triple to about 80 million devices.

Such forecasts validate Sony’s forecast last week that its Blu-ray Disc-oriented business would approach the $10 billion annual revenue mark within three years. The company also said 90% of its electronics categories would be both network-connectable and wireless-enabled in an attempt to capitalize on its leadership position in LCD TVs, high-definition DVD players and game consoles.

“We’re seeing increasing action in the TV space, especially in Japan,” Wolf said on the conference. “Now that the next-generation format wars have been resolved, you’re going to see increasingly Blu-ray players with networking connectivity, as companies like Sony push that to make hardware platforms dynamic.”

Companies such as Sony, Microsoft and Nintendo with benefit as the number of North Americans using media devices to transfer online videos to their TV sets jumps to about 48 million in 2012 from 9 million this year and about 3 million in 2007, Wolf said. About 25 million North Americans will use consoles to process online video in 2012, while about 10 million will use non-service-provider set-top boxes, such as Apple TV, Vudu or SlingCatcher.

For the quarter ended March 31, Microsoft’s Xbox 360 console pushed the company’s entertainment and devices sales up 68% from a year earlier as the company’s total revenue was little changed.

“Microsoft and Sony are going to be very active in getting online video delivery to their consoles,” Wolf said. “They see these consoles as really more than gaming consoles, but as potential retail set-top boxes.”