Here's Why The TV Apps Economy Will Be A $14 Billion Business

According to new research published this week, the TV apps economy is forecasted to reach $14 billion by 2017.

Gaudy numbers to be sure, but let me tell you why that number may ultimately be conservative.

First off, the traditional TV navigation guide is on its way out, being replaced by new connected TVs with web and app-centric interfaces courtesy of Roku, Apple , Samsung among others. This shift is due to both the growing consumer demand for online services, but also because consumer electronics manufacturers - and even cable companies - are beginning to embrace new TV navigation interfaces that aren't exactly your father's stale grid guide.

These alternative interfaces are part of a new crop of smart TV application frameworks that not only enable hugely popular online TV services like Netflix and Hulu to be streamed through apps on TVs, but are also creating entirely new TV monetization models.

Take for example today's news that Apple will begin selling video advertisements served by iAd through iTunes Radio loaded on Apple TVs. This is only the first move for Apple in this space, and others like Samsung and Google are already investing heavily in connected TV app advertising.

But it's more than just advertising. Connected TV app platforms are not only creating new opportunities for companies like Intel , Amazon or Apple to disrupt the cable provider, but they're also allowing the cable provider to disrupt themselves. Companies like Time Warner  can now offer virtual cable packages delivered not through traditional cable delivery systems, but instead over the public Internet to smart, app-enabled TVs, Internet set-top boxes and game consoles. NextMarket Insights expects over 6 million subscribers to subscribe to these "virtual" cable packages by 2017.

And lastly, the growth of smart, connected  TV application frameworks will finally open the potential of couch commerce. Today most consumers have never clicked with their remote to buy a physical, let alone a digital, good. But with new connected TV platforms, we believe the TV screen will becoming an important way to shop for both bits and bites.

Today's cable industry is $97 billion in the US alone, and with the fast changes coming to the TV business, we expect the market for new services, advertising and commerce delivered through smart, connected app-enabled software frameworks to reach (and possibly even surpass) $14 billion by 2017.

Michael Wolf is chief analyst with NextMarket Insights. His new report on the TV Apps economy is available here, where you can can also find a complimentary copy of the report's executive summary.