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Report: Blu-ray to Drive Web TV Enabled Homes

18 Jan, 2010 By: Erik Gruenwedel

Worldwide sales of Internet-enabled devices are expected to grow nearly 80% this year from 2009, driven by strong consumer demand for Blu-ray Disc players and 3D movies, according to a new report.

British-based IMS Research said it projects global shipments of Web-enabled Blu-ray players to top 28 million units in 2011.

In addition, the report said Internet-connected devices such as video game consoles, media extenders, proprietary equipment, DTT/IP set-top boxes and connected TV sets should help bring Web-enabled TV to more than 473 million homes by 2015.

Separately, Parks Associates said it expects the number of Web-enabled TVs to reach 80 million in the U.S. by 2013.

“With nearly all Blu-ray players manufactured with IP connectivity enabling access to video-on-demand streaming libraries like Netflix, Amazon, Vudu, and CinemaNow, Blu-ray players are more compelling for purchase consideration than they have been since their market debut,” said Rebecca Kurlak, analyst with IMS Research. “With the Blu-ray Disc Association releasing the Blu-ray 3D specification a month ago, and the continued decline in the device category’s average selling price, [we expect] consumers to welcome Blu-ray players into their homes.”

The growth of connected devices in the home could also result in more consumers reconsidering cable as the primary source for movies and television shows, analysts say.

The average monthly cable bill fell nearly 12% to $70 in the third quarter of 2009, compared to the same period in 2008, as consumers dealing with the recession eliminated premium channels, according to research firm Centris.

At the Consumer Electronics Show (CES) earlier this month in Las Vegas, Panasonic and LG said they would begin shipping TVs later this year that included Skype access. Reports suggest that 60% of current broadcast TV is available repurposed online for free.

Microsoft claims that 20 million of its Xbox 360 consoles are connected to the Internet, including reaching upwards of 2.2 million users at one time via Xbox Live.

Spurred by the growth of Netflix (and recently Blockbuster) movie streaming via connected Blu-ray players, media players and televisions, research firm In-Stat said 39% of U.S. households with a game console can watch movies electronically.

The Scottsdale, Ariz.-based company, in a consumer survey, found that more than half of U.S. consumers with networked Blu-ray players use a wireless connection, while 30% use an Ethernet connection.

“Our research shows that within five years, nearly all broadband households will own at least one web-enabled CE media device,” said In-Stat analyst Norm Bogen. “The implications of this across the digital entertainment industry will be huge.”

Indeed, Roku, which was the first media player to offer Netflix streams, saw unit sales increase 220% in December. Upstart Boxee, which last year began offering repurposed TV programming via Hulu and TV.com on a proprietary set-top box, claims it has 850,000 users.


“The consumer electronics makers are really the only ones who don’t have anything to lose if consumers switch [from cable],” Forrester Research analyst James McQuivey told Ad Age. “Everyone else [including studios] is conflicted.”


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