CES 2011: Yahoo! Connected TVs

Consumers are discovering that there’s a lot of good content available on the Internet. Netflix is getting a lot of the attention, especially with the statistic that at peak times, it accounts for 20% of all Internet traffic in the U.S. That’s astounding.

Television manufacturers are going to make that proportion increase, it appears, as many are adding network connectivity to their sets. Yahoo! Connected TV is perhaps the leading solution, as it is already included in sets from seven of the top 10 manufacturers. The company estimates that it already has an installed base of about 6 million sets worldwide, and that is expected to grow to about 8 million by March of this year. Yahoo! Connected TV also will be in non-TV devices, starting with a D-Link network media player that is scheduled to ship in the second quarter of this year.

The new development with Yahoo! Connected TV is that the company is going let the viewer interact with broadcast content. The broadcaster will be able to encode the programming to provide on-screen prompts to links about additional information. The program window will shrink down but remain active while you browse the other content on the screen. This feature could be used to provide access to statistics or fantasy league data during sports events. I also can envision it being a way to make product placements more effective; being offered more information about a hot sports car featured in some show would not be intrusive if you’re interested in the car. (And if you’re not, you just ignore it and keep watching the show.) This sort of interactivity could end up being a key part to finding new ways to fund the creation and distribution of television programming.

The Yahoo! Connected TV platform is just one of many approaches designed to make it easier and more powerful to access Internet content on your HDTV. It’s too soon to tell which one will eventually win out, but Yahoo! has clearly established a strong position in this market.