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Netflix, YouTube Among Top TV Apps

26 Jul, 2011 By: Erik Gruenwedel

More than 60% of connected TV homes use embedded apps at least once a week, according to new report

Technology applications that allow users to access third-party content on smartphones and tablet computers are increasing in popularity on Internet-connected televisions, according to a new report.

Scottsdale, Ariz.-based research firm In-Stat estimates that 60% of households with a Web-enabled TV will use an embedded app at least once a week to access movies, TV programs and user-generated videos.

Indeed, shipments of connected TVs with integrated TV apps will grow by an average 36% during the next five years, with 22% of U.S. broadband households already owning an HDTV with integrated TV apps. The data is noteworthy considering sales of connected TVs continue to challenge consumer electronics retailers, including Best Buy — one of the largest CE chains in the country. Indeed, in its most recent fiscal report, Best Buy cited smartphones and tablet computers — not connected TVs — as principal revenue drivers among connected devices.

While apps and ubiquitous app stores are heavily marketed by cell phone manufacturers, In-Stat found that comparable TV technology not the primary reason for purchasing connected TVs. It also found that adoption of online subscription video streaming services, such as Netflix, does not increase the propensity to purchase online video content, including transactional VOD and electronic sellthrough.

In addition viewing of DVR-recorded TV programming does not lead to increased adoption of free VOD services from a pay-TV operator. Yet, consumers subscribing to both pay-TV and online video services rose from 18% to 30% during 2010, underscoring the continued growth of Netflix.

“As expected, Netflix and YouTube currently dominate the TV application space,” said Keith Nissen, research director with 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.”


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