Online Video Use on Smart TVs On the Rise

DALLAS: The percentage of U.S. smart TV owners using those devices to access movies and TV shows online has risen by more than 30 percent in the last six months, according to new research from Parks Associates.

"The percentage of smart TV owners connecting the device to the Internet has steadily increased, from approximately 40 percent in 2010 to 56 percent today," said Pietro Macchiarella, research analyst at Parks Associates. "This device, when connected, offers a toehold to a variety of players, including broadcasters, over-the-top video providers and pay-TV providers."

Smart TVs in a Pay-TV World reports that just 1 percent of TV sets shipped in the U.S. in 2008 were Internet connectable. This will grow to more than 45 percent this year. Among smart TV owners, 75 percent will watch an Internet-delivered movie on the device at least monthly, and 71 percent will watch online TV shows. On a near-daily basis, 30 percent watch movies and 32 percent watch TV shows.

"Smart TVs have the potential to be both a threat and an opportunity for pay-TV providers," said Brett Sappington, the director of research at Parks Associates. "Smart TVs provide consumers another way to access over-the-top services like Netflix on the TV, providing a new distribution channel that all players can leverage to deliver content to consumers. However, by integrating the smart TV into their distribution model, pay-TV providers can leverage their strengths in content costs, customer relationships, bundling, and other areas to play a more substantial role in OTT. In addition, pay-TV providers can potentially use smart TVs to lower subscriber CPE costs, an important consideration in a highly competitive market."