Meanwhile, a study from Informa Telecoms & Media predicts that one-third of the world's total TV households, or 350 million homes, will take video-on-demand or near-VOD services by 2010.
Internet use in Europe is outstripping other media, according to a new report by the European Interactive Advertising Association.
The EIAA Mediascope Europe Study found time spent using the internet increased 17% this year, while time spent watching TV increased by just 6% and radio by 14%. In the print sector, it reports that Europeans spent 17% more time reading newspapers, but 7% less time on magazines.
The research, conducted by Datamonitor, shows the average European spent 10 hours 15 minutes a week online in 2005, compared with eight hours 45 minutes a week in 2004.
French and UK citizens spend most time surfing the internet. The EIAA reports French online users spend an average of 13 hours a week online, followed by the British at 11 hours a week.
The expansion of broadband services across the Continent is moving apace, but the study predicts it will reach a ceiling within two years when 60% of European homes will be connected.
Comments report author Tim Gower: "The current situation in many markets can be best described as one of rapidly increasing penetration, where broadband has effectively entered its growth sweet spot."
The report also says the internet is second to radio as the most used media throughout the day and second to TV in the evenings.
The report, On-Demand TV - Fourth Edition forecasts that North America and Europe will account for a combined 86% of global on-demand revenues in 2010, with North America on top with a 44% share.
Says Simon Dyson, author of the report: "So much of the content available through VOD is free-of-charge, and many of the more successful operators are looking to expand their free offerings."
He adds, however: "Although this doesn't generate much in the way of revenues at the moment, it adds value for subscribers and has become a really useful tool for reducing churn. Within a few years, subscribers will be migrated to paid content, and then significant revenues will be generated."
Data sourced from MediaGuardian.co.uk and multichannel.com; additional content by WARC staff