Web and other options are shaking up how we watch TV - USATODAY.com

If you gave or got a TV set, game console, Blu-ray player or DVR for the holidays, you might become the kind of person who scares executives who run movie and television production studios, broadcast and cable channels, and cable and satellite systems.

Many of these devices now make it easy for people with home broadband networks to feed content from the Internet, including Hollywood movies and TV shows, onto their TVs.

What media moguls fear: 2011 could become the year when increasing numbers of people watch Web TV content from sources including Netflix, iTunes, YouTube, Amazon, Vudu, Hulu Plus and Crackle — and trim or even cancel their monthly subscriptions for cable, satellite or phone company TV service.

"You can't have a discussion in the media business today without this becoming the sole topic of conversation," says Craig Moffett, a media analyst at financial services firm Bernstein Research. "This is the whole shooting match."

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It's sure to be a big topic this week at the International Consumer Electronics Show convention in Las Vegas, where companies will unveil the new Web-enabled TV devices they'll sell this year.

There's still wide disagreement over how many people will take to Web TV and how quickly they'll do so. Research firm SNL Kagan estimates that 16.5 million homes have a Web TV device and 2% use it to watch Hollywood TV shows and movies.

But most everyone agrees that the proliferation of broadband-enabled devices could lead to the biggest revolution in viewing habits since the advent of cable TV in the 1970s.

"The pace of change here has been mind-blowing," says Shawn Strickland, Verizon's vice president for consumer strategy and planning. "We've been looking at this issue for the better part of a year, and our perspective has pretty much done a 180" to a belief now that pay-TV "cord cutting" — industry jargon for consumers who drop their cable or satellite TV service — "will happen."

If he's right, Web TV could upend the pay TV industry that generates about $140 billion a year from ad sales and consumer subscription fees, says analyst Laura Martin of financial services firm Needham and Co.

The pieces are falling into place.

SNL Kagan forecasts that by 2014, about 46.3 million homes will have at least one TV with a broadband connection to the Internet and 7% of all households will depend on the Web instead of pay TV to watch professionally produced content.

That could lead to a world in which "low-cost streaming services like Netflix will increasingly become a 'good enough' substitute for traditional pay TV," says analyst Spencer Wang of financial services firm Credit Suisse.

via usatoday.com

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