The Internet And The Future Of Tv

Imagine a day when you would be in total control of creating your own TV channel lineup.

Instead of subscribing to a service from a cable, satellite or phone company that might offer you hundreds of channels you'll never watch, you would be able to select what you want and watch it on your own schedule.

That day might not be so far away. Slowly but surely, content that's broadcast over cable networks and through satellite providers is being distributed through the public Internet.

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What's new:

A lot of the technology is in place to deliver TV content via the Internet, where content providers could bypass cable and satellite services and deliver programming directly to viewers.

Bottom line:

While content providers have no intention of giving up on traditional TV service, they are watching Internet TV developments carefully. Most are moving gingerly into the market, making sure digital rights issues are properly addressed, that they can maintain control over content once it's on the Web, and that there is adequate demand for the service.

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In terms of the technology, all the elements are falling into place to deliver high-quality video from the Net directly to viewers in their living rooms. Software has been developed to ensure the quality of video distributed over the Net. And companies such as Microsoft and Cisco Systems' Linksys home division are developing products that enable Internet video to be viewed on TV sets instead of only on PC screens.

Apple Computer, which has changed the music industry with its iPod music players and iTunes music store, is trying to do the same thing in the video market. Earlier this month it introduced an iPod that plays videos, and launched a department in its iTunes store that sells episodes of popular TV shows, such as "Desperate Housewives" and "Lost," along with a handful of animated short films and music videos. All video offerings sell for $1.99 apiece. While the iTunes video library is limited today, it's clear that Apple's approach is shaking up the entertainment industry and a new distribution model is emerging for video.

So far, content providers are treading lightly as they open new Net-based distribution channels. For example, Comedy Central's new MotherLoad Web site, which launches Tuesday, will offer only select clips of content rather than the full range of programming available on Comedy Central's cable channel.

It's easy to see how the old model for TV might evolve and adapt to distribution on the Net as the necessary technology makes its way into the home.

"Producers of content want as many forms of distribution as they can get to reach their audience," said Vito Palermo, founder of a start-up called Portola Networks, which is in the early days of developing technology for content providers to manage the distribution of their content over the Web. "They would love to cut out the middlemen, but the economics must be compelling. Technology is an enabler, but there are a lot of other dynamics around consumer behavior and the business model that need to be in place first."

Much of the infrastructure to provide broadcast quality video directly over the public Internet is now available. Companies, such as Kontiki and EdgeStream, have already developed software to secure content and ensure the quality of streaming video.

"We have developed technology that mitigates latency on the Internet and tunnels video traffic through congestion, so that a user on the other end never experiences errors or packet loss," said Rajeev Sehgal, chief business development officer for EdgeStream.

Start-ups like Portola, which is still at least a year away from launching a product, are developing management tools for content providers who want to bypass the traditional cable and satellite distribution models and deliver directly to consumers via the Internet.

"The challenge now is around usability. How do you make it easy for people to access high-quality video content over the Internet while satisfying the rights of content owners and keeping networks safe from viruses? That's what we're trying to do."

--Scott Sahadi, VP of corporate development, KontikiEdgeStream has already struck deals with several content providers, including Digital Identity in Italy, which enables more than 75 percent of all the streaming traffic on Telecom Italia's network; TV Plus in the United Kingdom, which offers popular Russian movies, cartoons, documentaries and classical music; and SkyPerfect Communications, Japan's largest satellite TV broadcasting services company. Earlier this month a Web site called Bollywood.tv, which uses EdgeStream's technology, launched a service that offers more than 730 Indian movies over the Internet.

Kontiki, which has developed software that applies digital rights management rules to ensure video isn't ripped off, is also seeing more content providers, especially those outside of the United States interested in distributing content over the Web. The BBC started testing Kontiki's technology in 2004 and is now in the second phase of a technical trial. Sky, a satellite TV provider owned by News Corp., will launch an Internet TV service using Kontiki's service before the end of the year.

"All the pieces are here now from an infrastructure perspective," said Scott Sahadi, vice president of corporate development for Kontiki. "The challenge now is around usability. How do you make it easy for people to access high-quality video content over the Internet while satisfying the rights of content owners and keeping networks safe from viruses? That's what we're trying to do."

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