Several converging trends are turbocharging the growth of broadband video and distributed entertainment in the home. The explosion of long tail content and the willingness of large content owners to distribute their premium catalog over IP networks, together with the ability of mobile, PC, CE, and set-top devices to act as networked media playback devices, are generating a broadband video "perfect storm" that will gather strength over the next three years.

"A number of factors have come together in 2006 to begin the widespread adoption of video over broadband connections into and around the home," says ABI Research principal analyst Michael Wolf. "As content providers and their distribution partners develop business models for network-based content delivery, the ecosystem for distributing entertainment throughout the home is coming of age. In just a couple of years, the device market has moved from a strict focus on physical layer technologies to enabling inter-device connections at the software and service layers through initiatives such as DLNA and Viiv."

The emergence of long tail video portals such as YouTube has begun to create demand for Internet-delivered content among younger consumers. This, along with moves by large content owners to put their premium shows online, has filled what was once a gaping hole in the structure of the "connected home."

"The scarcity of content available for distribution in the connected home is rapidly being corrected," says Wolf. "This, combined with new platforms such as TiVo’s TiVoCast, and Microsoft’s revamped Online Spotlight in Windows Vista, will begin to shape a new market where content owners and consumers have their choice of providers on a multitude of platforms."

While the future is bright as conditions for broadband video delivery to and around the home coalesce, ABI Research cautions that there are still many hurdles. "Proprietary approaches by technology vendors, and the persistent difficulty of home network setup will continue, creating challenges to networked-based content delivery even as the market for such content grows," said Wolf.

ABI Research’s study, "Broadband Video and Internet TV" examines the pay- and advertising-supported broadband video markets. User numbers, views and revenues are examined and forecast for each model. It also explores digital home infrastructure for broadband video, forecasts market performance for media networking hardware, and much more. It forms part of three ABI Research Services: IP Video, Home Networking and Digital Media Distribution and Management.