Connected TV Sales Booming

Sales of Internet-connected televisions are rising significantly, an indication that consumers want to see more Web content on their large-screen TVs, a market research firm said.

U.S. revenue from TVs with built-in Internet capabilities rose by 40% in the second quarter to top $1 billion, compared to $776 million in the first quarter, Quixel Research reported Wednesday.

In terms of unit sales, shipments rose 70% to 620,000 units, compared to 365,000 units in the previous quarter, Quixel said. Unit sales in the first half of 2009 exceeded the total for 2008, which was 985,000 units.

The numbers show that consumers want to be able to access Web services through their television, whether it's to watch video or rent movies from YouTube or Netflix, respectively, or to check out what's new on social networks, such as Facebook.

"The timing is right for consumer adoption of connected TVs," Quixel analyst Tamaryn Pratt said in a statement. "The majority of people already have high-speed broadband in their homes, and with the increased availability of premium content via the Internet... manufacturers are capitalizing on consumers' desire to watch programming on a much larger screen than their computer monitors."

Quixel estimates that from 15% to 20% of TVs with built-in Web capabilities are actually connected to the Internet in households. However, the percentage is expected to increase dramatically by the end of the year.

Connected plasma TVs in the second quarter showed the largest quarter-to-quarter growth rate at 202% in terms of unit sales and 163% in revenue, which rose to $293 million from $111 million. Unit sales of connected LCD TVs rose by 40% and and revenue was up 20% to $795 million.

The growing popularity of viewing Web content on a large-screen TV is reflected in the increasing amount of content available from Internet companies. In terms of movies and TV programming, for example, Amazon, Netflix, and Blockbuster have all announced additional content from major entertainment studios, as well as deals with hardware manufacturers to connect their services to the TV.

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