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Connected TVs Will Rule US by 2017 – Study

No matter whether their TV sets are smart or dumb, more than half of US consumers will be regularly accessing the Internet through some kind of connected TV gadget by 2017, according to new research.

The latest study from eMarketer Inc. predicts that about 54% of Americans will use a connected TV at least once a month to reach the web by 2017, more than double the estimated 26% who did so last year and the estimated 36% doing so today.

In contrast to some other research firms, eMarketer defines connected TVs as more just smart TVs with native web links. It also sees the category encompassing TV sets hooked up to the Internet through any other means, including online media streaming boxes like Roku and Apple TV, video-game consoles like Xbox, and HDMI streaming sticks such as the Google Chromecast.

Further, eMarketer forecasts that two-thirds (67%) of US Internet users will access the web regularly through some kind of connected TV link by 2017, up from the estimated 45% who can do so now. With the numbers growing rapidly, the research firm expects more than half of Internet users will be accessing the web through their TV sets by sometime next year.

Thanks to such growth trends, eMarketer believes that more than 190 million Americans will be tuning into the web regularly through their TV sets by 2018. That's more than double the 84 million Americans who could do that last year and up notably from the estimated 113 million who could do so now.

Smart TVs will drive part of this growth. eMarketer predicts that the number of US smart TV users will climb from about 38 million last year to nearly 50 million this year, and almost 80 million in 2018, as more set models hit the retail market and the prices of the sets keep dropping.

But smart set owners will account for a smaller portion of the connected TV user population over the rest of the decade, due to the even stronger growth of such "third-party devices" as set-tops, game consoles, streaming sticks, and the like. eMarketer forecasts that the portion of connected TV users without smart TVs will rise to almost 59% by 2018, up from about 54% last year and 56% next year.

In a separate study, eMarketer predicts that digital video ad spending will continue to rise dramatically this year, reaching nearly $6 billion. That represents a growth rate of almost 42% from $4.2 billion in 2013, as advertisers pour more money into both desktop computer-based ads and ads oriented towards users of smartphones, tablets, and other mobile devices. eMarketer then sees this number more than doubling to $12.7 billion by 2018.

However, the firm notes that TV ad spending will continue to generate stronger growth in terms of actual money spent, reaching a total of $68.5 billion this year. While TV ad spending will rise just 3.3% from $66.4 billion last year, it will still go up by $2.2 billion, more than the $1.8 billion increase in digital video ad spending. eMarketer predicts that TV ad spending will continue to maintain its dominance well into the foreseeable future, reaching a total of $78.6 billion by 2018.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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