Internet TV – Unclear how it is going to work

If you read this blog regularly you will know I am very excited about how the internet will change the TV industry (most of the posts are here) – well this week I have found myself at a bit of a low point. It seems to me there are three basic models and I can see is problems with all of them (from the perspective of how we might make some money out of them).

  1. The large scale IPTV plays – from the likes of BT Vision – I think these guys have an important infrastructure role in matching content to network conditions and devices and maybe in billing, but I just can’t see them getting the retail side of things right. I hear that BT have hired a team of media folk to run the operation, so maybe I’m wrong here, but I haven’t seen anything so far which to dissuade me of this view, and I have seen a few things that worry me.The opportunity for startups here is selling infrastructure to the likes of BT (or VirginMedia etc.) – which is only interesting if you believe they will be successful.
  2. Pure internet plays going after the mainstream – Joost and Babelgum – these companies have done a great job at building profile and in the case of Joost getting a LOT of people on their pilot. A lot of smart people think these businesses will be successful and I’m sure they will be – to me the obvious questions are how they will get enough content onto the platform to tempt audiences away from the comfort of what they know and love and whether the P2P model will scale (this is such an obvious question that I’m sure there must be a good answer to it).Now that Joost has taken its investment I’m not sure there is much in the way of further opportunity for startups and VCs.
  3. Pure internet plays initially targeting niche audiences – SecondsOut and VingoTV are good examples. Loads of opportunity here for entrepreneurs and VCs alike and this is the area I’m intuitively drawn to – I like the way they aggregate global audiences for an offer that mainstream TV can’t deliver. The question I’m struggling with is how to think about these types of business scaling beyond their initial niche.

Answers on a postcard….

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