Connected TV Penetration May Soon Surpass PC, TV levels

A report coming out from IHS Screen Digest on the TV marketplace in the U.S and Western Europe suggests that we'll soon be seeing a transformation of TV markets.  They start with the argument that while TV ad revenues remain significant, revenues are expected to remain flat in the near future, while online video advertising revenues will continue to grow.  The growth in online revenues will be fed by the increase in connected households and the increased penetration of mobile and connected devices.

  The report indicates that at the end of 2011, there were some 305 million TV houses in the U.S. and Western Europe, compared to 245 million homes with PCs, and 124 million homes with some kind of connected device in the living room.  The report suggests a rapid transformation of that market, predicting that by the end of 2014, the number of connected homes will surpass both the number of PC homes and the number of TV homes.  The report projects that by 2016, the primary way most subscribers receive TV won't be by broadcast or multichannel provider (DBS, cable, etc.), but through a mix of "multiscreen services" via IP streams and downloads.
  The study suggests the boom in such alternative paths for TV will drive content producers to make their content (and ads) available on these alternate outlets.  Ad management firm VideoPlaza (who commissioned the study) indicated that it's already seen a rise in the number of TV ads that are also delivered to connected devices (other than PCs) in Europe, growing from 2% to 16% in the last year.
  Joe Mandese, in a post on the TVWatch blog, suggests that this shift is more fundamental than when cable first challenged broadcast TV =

In fact, in its earliest days, cable was not defined as a distribution medium, but by its content. People didn’t “subscribe to cable,” they “got HBO” or they “wanted MTV.” The rest was just semantics, because fundamentally, they were experiencing television – more or less – the same way, regardless of whether it came from an antenna, a dish or a coaxial or fiber optic cable. Viewers watched it on screens that were in one or more rooms of their house, in the houses of their neighbors, or sometimes communally in a bar or student center, etc.Source -
But the shift that’s taking place now is different, because it significant alters how, when, where and why people experience television across a multitude of screens that can dramatically alter the context of what the medium means. And it’s not just time-shifting and place-shifting, though those are significant factors being enabled by the shift toward what Screen Digest calls “multiscreen services.” The bigger shift is what I would call “mind-shifting.” Or maybe a better term would be “state-of-mind-shifting.”

  Another way of looking at the transition is that the increased choice and control these devices enables a shift in how they approach and consume TV - with more active viewing activities supplementing (and perhaps even replacing some) traditional passive TV viewing. We've already seen evidence in the boom in the use of Netflix and other streaming services to deliver traditional TV content (movies and programs), and analysts predict that the widespread online coverage of the London Olympics will see sports fans shift from traditional TV channels to online streams when events they want to see aren't broadcast live.  There are growing numbers of studies showing a shift in connected households from solely passive, to engaging in connected activities while watching TV - even to the extent of suggesting that viewers are more engaged in the program when watching on mobile or connected screens.
  These are shifts, or transformations in TV content markets, that content producers and media outlets need to start planning for, so that they'll be better positioned to compete in the new market reality.

Sources - Connected TV Homes to Surpass PC Homes by 2014, Report Says,  VidBlog
From Channel-Surfing To State-Of-Mind-Shifting,  TV Watch blog