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In the traditional TV mold, everything had to be in 30- to 60-minute formats to fit schedules, but IPTV changes that. "With an on-demand world, it doesn't matter whether it's 30 seconds or 17 minutes," Southwick says. Starz recently brought in an animator who draws shorts of bunnies acting out classic movies, and a Star Wars short got more than 2 million downloads--and eyes for advertisers--in a few months. Future Starz Ticket and Vongo users will be able to search by director, actor, or movie. Consider it an Internet movie database where you can watch the movies.

IP also changes Starz's ability to market to customers. IP addresses show who's watching what, where, and when. This information will let Starz suggest movies for individual subscribers, not unlike Google's ads or Amazon.com's recommendation system. In mid-December, rival HBO disclosed plans to offer two channels of content for Cingular Wireless phones.

Billions Of Potential Users

While putting television programming on phones, iPods, and everything else that moves has everyone excited, Internet video remains something of a wild card. Unlike subscription-based services, video on the Internet has the potential to reach a billion users today and perhaps twice that in 10 years. For content providers and advertisers, an audience that large looks a lot more appealing than the few million IPTV subscribers that exist today. But reaching that audience takes a publishing platform and a distribution model.

That's where companies like Brightcove come in. Brightcove's software lets video producers and publishers distribute content over the Internet. Small publishers use a self-service interface, while large ones have more-advanced tools. Content owners and publishers can upload video, categorize it, create graphic overlays or customized video players, and publish and syndicate the content. IAC/InterActiveCorp, AOL, Hearst, and other media companies invested $16.2 million in Brightcove two months ago.

Reuters recently began using Brightcove to test a streaming-video service that the news agency will make available to other Web sites at no charge. "The stakes are very high, and the shift is very profound for every touch point," says Brightcove founder, chairman, and president Jeremy Allaire, whose former startup, Allaire Corp., was acquired by Macromedia in 2001. "What we'll see will be not dissimilar to the impact that the Web has had on print and the traditional media."

To make money, Brightcove, which has products in limited release that will be generally available early this year, lets users sell or serve their own ads, run ads from Brightcove's own network of clients, or sell their services à la carte or via subscription to Web sites and consumers. To accelerate that approach, the company hopes to take advantage of the Google paradigm, where most online content is searchable, syndicated, or indexed, and optimize clients' search results so their content gets more viewers. Brightcove can even handle billing and collection.

"Whether you are a small media producer or a mainstream producer, the biggest opportunity is to create ad-supported broadband services," Allaire says. "These are a targeted audience that are measurable in ways they weren't before."

There's no doubt that Internet video content will find an audience; it already has. The question is the extent to which it finds its way into the controlled environment of IPTV and whether it will thrive there alongside high-value, protected content such as first-run films. "The major media companies really need to be creative and figure out how to embrace new types of content or they'll risk losing viewer share," says Greg Verdino, senior VP with ROO Group Inc., an online video and services provider.

Jeff Weber, VP of product and strategy for AT&T's Project Lightspeed fiber rollout, suggests content that bubbles up from the Net could be part of the IPTV ecosystem, but there's a catch--security. Says Weber, "We're going to continue to put security at the top of our list to make sure that we can deliver the kind of quality and reliability that we know our customers are going to expect from us." Whether content consumers will prefer the safety of IPTV or the less regulated Internet, stay tuned.

Illustration by Viktor Koen

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