Internet TV could boom in the next few years, study says

TVs with Internet connectivity could reach 6 million by 2013, according to Ernst & Young

Internet-enabled TV sets could see wider adoption in the next few years as viewers get comfortable with the idea of running widgets on TV screens, according to a study released by Ernst & Young on Thursday.

Widgets -- or mini-applications -- are already being used in devices like mobile phones and computers to run light applications, and those applications could reach TV sets, the analyst firm said in the study. TV widgets are designed to pull selective content from the Internet to complement TV watching. For example, users can view weather information on TV or buy products advertised on TV from online stores.

Many consumers consider it an "appealing" idea to mesh TV with information from the Internet, according to the study. Web-connected TV shipments could total less than 500,000 in 2009, but top 6 million by 2013, E&Y said in the study, citing statistics from Parks Associates.

Widgets could also be the glue that brings together Internet and TV content. Broadcast TV is already competing with the Web for viewership, and widgets could facilitate content searches through both mediums, giving more entertainment options to viewers.

Many Web sites and technology companies are developing an ecosystem to bring content from the Internet and TV together. Myspace.com, for example, has developed a widget that blends TV with its social-networking offerings. TV watchers could exchange e-mail messages or browse photos on MySpace by activating a widget at the bottom of the TV screen. Users don't need to rely on a browser to access MySpace content.

TVs and chips, for instance, are also being developed to build Web-enabled TVs. Sony, Samsung and LG have said select flat-panel high-definition TV models would be able to run widgets or download movies from online entertainment services like Netflix.

Intel last week announced the CE4100 media processor, which enables the use of Internet and multimedia applications on TVs, Intel said. Intel is also working with companies like CBS and Cinemanow to bring widgets to TVs.

Web-enabled TV has struggled over the past 15 years since Time Warner Cable launched the iTV service in Orlando, E&Y said. Ever since, it has seen many iterations, with companies like AOL, BSkyB, RespondTV, Hewlett-Packard and Apple trying to bring the Internet to TV through devices like set-top boxes or adapters.

The success of widgets depends on applications that users will want to have on their TVs. For example, one-click access to on-demand content from online movie stores is well-suited for widgets.

Widgets for TV use also need to be adopted by television programming and cable operators. The operators will look to monetize widgets by developing an ad sales model around it, which could face some challenges, the study found.

For example, viewers could migrate their attention from TV shows to widgets, which could affect the ratings of a program. Conflicting advertising could also appear on a TV screen and widget at the same time, which could affect ad sales models.

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Agam Shah

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