New Zealand is moving into the digital age with analogue television likely to be phased out by 2012, a report commissioned by NZ On Air has found.
About 55 percent of households now have digital television provided by either Sky TV (45 percent of households) or Freeview (10 percent).
New Zealand broadcasters planned to switch off analogue television services once the 75 percent threshold was reached or in 2012, whichever came first.
Since the last report in 2005, internet-based entertainment had ballooned with online video and social networking sites growing in popularity.
Video sharing website YouTube streamed more than 100 million videos a day and received 13 hours of footage every minute.
The exodus to the internet was hitting television viewer numbers as people were presented with more entertainment options.
Those with broadband were now spending more time online than watching television, the study found.
"We suggest that public broadcasters follow the fragmenting audience and disperse their programmes over as many platforms as possible," report author Paul Norris of Christchurch Polytechnic's broadcasting school said.
Online advertising was the fastest growing sector but was still considered low considering the amount of time people used the internet.