Like Internet TV? So Do Your Neighbors

The popularity of TVs with Internet connectivity may cause big headaches.

More than a fifth of the 210 million TV sets sold last year had built-in Internet access. By 2014, the share is likely to rise to 50% -- adding up to about 122 million TVs a year.

That sets the stage for a bandwidth crunch. Movies, sports events and other high-definition content require bandwidth three to four times faster than the typical broadband user now has. With online movie rental company Netflix already accounting for 20% of peak Internet traffic in the U.S., Internet providers worry that Web traffic jams will prove to be more than just a nuisance.

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“The looming risk now is what happens if every connected TV gets used,” says Paul Gray, a vice president at DisplaySearch, which tracks the TV industry. “It’s reasonable to ask if the infrastructure can cope. Set makers need to understand that broadband access does not scale endlessly like broadcast reception.”

These smart TVs are capable of being upgraded and having their functionality changed by the consumer, typically by loading applications, and are able to receive content from the open Internet. In addition, they all possess an advanced user interface to permit rapid search and selection of content to watch.

Currently, they’re not limited to specific operating systems, and Linux, used by MeeGo, and Google’s Android, used in Google TV, will be joined by other operating systems in the coming years. Meanwhile, Google is working with Sony and Logitech to work out some bugs in Google TV, with sets expected to hit the market this year.

TV makers are pushing the connected sets as a way to boost their razor-thin margins on sales -- connected TVs sell for $200 to $300 more than conventional sets. Moreover, they’ve been unable to generate much consumer interest in 3-D TV sets during the past year, primarily because of the dearth of available 3-D programming.