More than 20% of flat panel TVs shipped in Europe this year will be able to connect to the internet, says Futuresource Consulting.
By the end of 2010, the installed base of connected TVs will increase to 15 million devices, nearly 10% of the total number of flat panel TVs in use.
The next step for manufacturers, says Futuresource, will be to add more compelling video services, including paid-for movie streaming that will create revenue-sharing opportunities with content owners, aggregators and application developers.
Futuresource expects "sophisticated services", including major catch-up TV services and VoD services, to offer greater competition to the premium subscriptions offered by Pay TV operators.
"In Europe, four of the major brands have already launched connected TV products that go beyond basic home networking functionality and allow delivery of over-the-top web services," says David Watkins, research consultant at Futuresource.
"… Although initially limited to high-end and mid-range products, we're going to see web connectivity feature on an increasing number of products next year, becoming standard within two to three years...
"...We expect content to be the next battleground and a key driver for connection and usage, particularly through interaction with social networking sites and access to recently released movies."
