March 20, 2011

US online television revenues, including both advertising and user fees, were up more than 34% in 2010, according to data from IHS Screen Digest. The research firm reported that online TV services took in a total of $1.6 billion last year.

The advertising component of those revenues grew fastest, rising 64.6% in 2010 to $719 million. Screen Digest reported that more effective monetization of online TV content fueled the increases.

But the number of ad-supported views of television content was up just 10%, according to Screen Digest, which warned against encroachment by Netflix.

Findings from Leichtman Research Group emphasize the importance of Netflix in driving streaming video viewing. Subscribers to the service are on the vanguard of the movement toward the digital home.

Leichtman found that 30% of US households have a television set connected to the internet, up from 24% a year ago. The percentage of adults watching video from the internet on a connected TV doubled over the same period, to 10%. Among Netflix subscribers, that number shoots up to 30%.

Netflix’s Watch Instantly service now reaches 12% of adults weekly, according to Leichtman, triple last year’s figure. And three-quarters of that group uses it to watch streaming TV shows and movies on their television sets.

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