Trender Research, has published a report estimating the growth potential for iTV over the next two years. The order of of limiting items as listed below is comprehensive, though I'd reorder and add to them in terms
of import, for example.

1. Device appliances and networking technologies to ease the connection and transfer of ip based content to home television/s. (breaking up divergent and simultaneous content across the home network without crashing)
A). TV manufactures implementing ip-based networking/connections within the form factor along with UI based alliances with companies like Roku, Tivo, MythTV, etc..
2. More live content. Current OTA/Cable episodic content that is not time delayed or used as a loss leader.
3. Studios forming independent production arms with the mandate to capture market share over and above short term profits for original iTV based episodic content.
The rest of the items on Trender's list.

OTT Video Report
By Brian Mahony, CEO of Trender Research

Our new strategic analysis of the over the top (OTT) video industry and its impact on the Pay TV market, "Pay TV and the Growing Over the Top Video Threat", predicts that 7 percent of households will forgo their Pay TV subscriptions by 2012 in favor of some combination of OTT services and free over-the-air (OTA) television. The report analyzes the major trends of online video consumption and how they are changing the business models for cable, satellite, and IPTV service providers as well as the video rental market. The study provides a strategic analysis of major OTT players, looks at current and potential Pay TV responses to the OTT threat, and predicts likely winners and losers.

Seven percent is the likely scenario. We also analyze a more aggressive scenario that has double the number of "cord-cutting" households (as well as a more limited scenario which has far less). Certain limiting factors would need to be overcome for the aggressive scenario to have such an impact in this timeframe, including:

* More content would need to be available online, including live content (such as sports) and more HD programming. The trend certainly points in that direction, though the imposition of subscription or PPV fees on sites like Hulu for premium content could slow this trend.
* More enabling devices and networking technologies to simplify the process for consumers to connect Internet video content to their living room TVs. The rapid growth of Internet-enabled HDTVs might be the catalyst.
* Pay TV hybrid strategies, such as TV Everywhere and Project Canvas, would have had to fail to keep consumers within subscription-based "walled gardens."
* Likewise, potential Pay TV operators' defenses, such as raising broadband Internet rates, negating net neutrality attempts, cutting prices for Pay TV, unbundling premium channels, etc. will have had to mostly fail to keep subscribers locked in.
* Some demographics (twenty-somethings) will have had to abandon Pay TV altogether.
* Taken together, these and other developments could combine to create a "perfect storm" of Pay TV cord-cutting, as well as reductions in premium package subscriptions and video on demand revenues.

Past Articles: LG/Netflix partnership