While the delivery of video to personal computers over broadband has created considerable excitement, the real disruptive opportunity will come as consumers are able to connect their living room televisions to the internet. Research company iSuppli forecasts that the market for professionally produced and advertising supported broadband video will grow nearly 14 times to $5.79 billion in 2011.

The market research company observes that the web is quickly growing into the largest interactive video-on-demand library in the world, while the internet is evolving into the most ubiquitous video distribution platform ever known.

As more consumer electronic products become networked enabled, broadband video will move from the computer screen to the living room television. This will be accompanied by a move from short-form material to longer programmes, driving bandwidth requirements and revenue, and threatening the dominance of walled garden operator services.

This presents both challenges and opportunities for companies involved in the video distribution value chain. Content owners face the trade-off of “reach” versus “control” as they navigate this new distribution channel. Video network operators face the challenge of both a new way to reach consumers, as well as a new competitive threat that could threaten their long-term position in the market. Meanwhile, a variety of internet portal companies, content delivery networks, software platform companies, and other technology providers embrace the revenue opportunity.

The bandwidth required for internet television is forecast to grow by more than 44 times from 2006 to 2011.

Broadband technology, coupled with the proliferation of digital consumer electronics devices, has enabled a growing market for digital audio and video and gaming content. These markets represent an enormous opportunity, but also a threat to many existing business models and distribution chains. The markets for multimedia content and services will profoundly impact content companies, service providers, portals and aggregators, equipment manufacturers, semiconductor manufacturers and software vendors.

The findings are contained in the iSuppli report Internet TV: Revenue and network demands for online news, sports and entertainment video. The report forecasts the market in terms of video streams, bandwidth and revenue by programme type, length and geography.