AOL is announcing this morning version 2.0 of its connected TV app, which will include a refreshed UI and advertising support for the first time. The app has been known as "AOL HD" but will now be known as "The AOL On" app. It is available on Samsung and Sony connected TVs and devices, plus Roku, and within a few weeks on TiVo Premiere DVRs. The move is another sign of how major content providers are getting more serious about migrating the online video experience from the desktop to the living room.

Rob DelaCruz, AOL's GM for Connected TV and Mobile Video explained to me that the updated app will dramatically expand the range of available content to include 380K short-form videos from partners like Reuters, BBC, E!, CNET and others in the AOL On network. As with AOL On's online presence, content will be categorized by news, entertainment, food, etc. Over a hundred new videos will be added each day. Until now the app has only drawn content from AOL's owned-and-operated properties like MovieFone, Engadget and HuffPo.

AOL is consistently a top 10 video property according to comScore, and in June registered 38.1 million unique viewers watching 545 million videos and averaging 63.7 minutes per viewer. A big factor in AOL's video success is its September, 2010 acquisition of 5Min, which brought dozens of content partners and an ability to syndicate widely to 3rd parties.  

Beyond the content upgrade, Rob said the addition of ad support means that advertisers can now buy across platforms. One wrinkle with ads on the connected TV app is that they won't be interactive (i.e. no calls to action or other engagement elements). Rob said that's due to limitations of TV/device remote controls as compared with online or mobile. As a result, ads will feel a lot like traditional TV spots. However, the ad load is expected to be quite low, with only a single 15 or 30 second spot being inserted every 10-15 minutes.

As far as other devices go, Rob reminded me that Microsoft recently said  the AOL On app is coming to the Xbox shortly, but he didn't share any specific plans for other devices. One big opportunity for the AOL On app seems like the iPad. Tablet-based video viewing is surging, and with AirPlay, it would also mean easy access to the growing base of Apple TVs.

It's still very early in connected TV's development  but no question high-quality content is beginning to flow to it - just browse Roku's channel store for evidence of that. A key challenge is that connected TVs are fragmented, requiring lots of development cycles for content providers looking for broad reach. High-quality apps like AOL On, which can also be monetized, will surely help move the market forward.