The survey of online consumers found that 12 percent had purchased some form of video content delivered over the Internet. Out of those, the majority (71%) watched video on their PCs, while 16 percent watched it on a TV using a burned DVD. Another 8 percent watched it using a game console.

ABI Research director Michael Wolf said, "Over the next few years new solutions from the likes of Apple, Netgear, and Sony will help cross this divide, making a la carte video download and viewing much easier."

"That doesn’t mean this transition will be an easy one: factors such as video quality, pricing of content, and technical glitches will persist for some time."

ABI predicts that out of all the options to watch online video that game consoles will lead in total revenue. The reason for this is that game consoles are close to the TV, have large hard drives, and a high penetration of online services among gamers.

Wolf concludes, "ABI Research believes that while Internet video delivery services for TV playback such as gaming consoles are only beginning to see public adoption, these devices, as well as products such as Apple TV, will ultimately create significant pay-content revenue opportunities if consumer platform vendors can provide easy-to-use solutions with good quality and large libraries, while offering attractive pricing options, whether subscription, download-to-own, or rental."