Global connected TV market to reach $3.23bn by 2016

The global market of services on connected TVs will reach USD $3.23 billion in 2016, according to new research from GII (Global Information). This market will represent 16.8% of the OTT video market and about 1% of the global fixed video services market.

These figures correspond to overall analysis of the deployment of connected TV services, which concluded that the right conditions for rolling out new services were not yet entirely there in early 2012, so researchers do not expect to see the market really take off.

The research anticipates that paid services will play a leading role in the development of connected TV services. Worldwide paid services will represent 59% of the market for video services on connected TV.

According to IDATE who has released a report based on the research findings, the television sector is facing a profound restructuring, as players from formerly disparate sectors, such as TV, Internet and equipment vendors converge on the market.

It believes we are nearing the end of a double phenomenon known as cordcutting (in which consumers will combine free access to linear television via digital terrestrial and satellite with a fee-consumption via OTT services) and cord-shaving (in which consumers will scrap their paid cable and IPTV plans for low cost OTT offers or a limited consumption of VOD services).

Given the pioneer position of the United States with respect to attractive OTT service offerings, IDATE believes that they will remain the largest market for connected TV services, harboring up to 61% of the total market.

With the big three TV manufacturers (Sony, Panasonic, and Sharp) reporting billions in losses in FY 2011, TV manufacturers need a lifeline if they’re going to stay in business. Smart TVs and connected services may provide such a rescue.