Web-to-TV Streaming to Hit $2.9 Billion

More than 40 percent of young adult U.S. households (ages 18-35) watch web video on their TV at least once a month, according to new numbers from In-Stat. The research firm predicts that by 2013, revenue from web-to-TV streaming services will hit $2.9 billion.

Web video in this instance is defined as any video coming from an Internet source (e.g. Netflix, Hulu, YouTube). In the next five years, In-Stat predicts that the number of U.S. broadband households watching web video on TV will grow to 24 million from 2.5 million today.

One of the drivers of this transition will be game consoles, which, as we saw from the 1 million Xbox subscribers who activated their Netflix streaming earlier this year, are proving to be a popular way to access web video on televisions. Currently, In-Stat says 29 percent of 25- to 24-year-old game console owners ages 25 to 34 use those devices to stream video from the Internet.

Beyond just numbers, In-Stat believes Internet-delivered video to television is poised to fundamentally disrupt the way TV programming is distributed (we could have told them that). The $2.9 billion revenue figure will come from subscriptions and pay-per-view, as well as new targeted advertising opportunities. To add some perspective, broadcast and cable TV ad revenues totaled $67.6 billion last year.

These numbers bode well for companies like Hulu and Comcast. Hulu has locked up web delivery for premium content from three of the four major broadcast networks for the next two years, and Comcast has the infrastructure in place to capitalize on video delivery both through traditional cable and through the web via Fancast.

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