But connected TVs and devices are expected to become part of the home far more rapidly than are 3D TV sets. Connected devices made up some 25 percent of TV sales last year; Parks Associates vice president and principal analyst Kurt Scherf anticipates they'll make up three-quarters of all sales by 2015, about 350 million units.

"Content options are finally catching up to the hardware innovations, and growing libraries of on-demand movies and TV available are starting to unlock the potential of connected TV devices as multifunction online entertainment and communications platforms," Scherf said.

That growth, and the increasing numbers of connected homes create immediate opportunities for service operators. "About 10 percent of U.S. households already connect their computers to the TV, that's a mass market," he said. "And it's creating new value added services opportunities for service providers."

With more content coming online--Scherf forecasts transactional revenue from online video will increase to $8 billion by 2015--more consumers will be looking for OTT content, another area of opportunity for providers. Studies show that certain aspects of pay-TV service scores high with consumers (aside from price, see this related story), things like consistent picture quality, VOD features, and electronic program guides. Those are all areas in which pay-TV operators can continue to provide an edge, and could leverage with managed OTT delivery.

"The bottom line is if operators don't provide it, consumers will find someone who will," Scherf said. "The risk from OTT is great, but so are the potential rewards for service providers. Do-it-yourself solutions like Roku are flying off the shelves, more and more consumers will access things like VOD through connected devices."

From the article, "Connected TVs, OTT offer pay-TV operators opportunities to grow business" by Jim O'Neill

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