• by Cory Treffiletti , Featured Contributor, January 24, 2007

Internet TV is a dynamic landscape, but some of what we see as a viable medium now will inevitably become obsolete within the next 10 years. Wikipedia defines "Internet TV" as "television distributed via the Internet," and I define Internet TV in a similar manner. Based on how I see it, the Internet TV landscape consists of six primary areas. These areas are:

1. Online VOD: network programming reaired on the Internet.
2. Sliver-Casting: niche programming developed and aired solely online.
3. Shifting Devices: TiVo, Sling Media, and other time/location-shifting tools.
4. UGC: user-generated content, aired and distributed online.
5. Mobile TV: network or other programming re-packaged and aired via mobile devices.
6. Digital Home Video: existing interfaces such as Digital cable, digital VOD, etc.

I foresee that while it is certainly worth our time to evaluate options within shifting devices such as TiVo as well as digital cable, I think it's safe to say that both of these are approximately five to seven years away from being an efficient place to advertise -- and 10 to 15 years away from becoming completely obsolete.

The issue arises from the fact that all TV will eventually be delivered via Internet Protocol, or IPTV. Eventually, as the speed for broadband continues to increase, we will see that all content, especially all video content, can be delivered through an IP-interface, though possibly in a radically different format than it currently is. The Internet providers and cable providers already know this, which is why you see Comcast and Time Warner Cable offering Internet, digital phone and digital cable all under the same package. These companies know that at some point it will be easy enough to shift all the cable over to an IP service, cutting their costs for delivery to the home.

A rep from Forrester once predicted to me that broadband speeds would be 10 times faster within five years, so a full-screen, all-video, no-buffer interface will certainly be achievable. If that's the case, why should they continue to deliver in the old format when they can simply create a Web interface that works with your remote, probably in some new format similar to what we are starting to see with the active touchpad system to be used by the iPhone? This radically updates the traditional TV interface and makes it even more consumer-centric, which is where the shift continues to take us.

If this is inevitable, then I would also argue that companies such as TiVo and Sling Media have a limited opportunity as well. The numbers would seem to support this. According to one source, there are televisions in 98% of U.S. households. The same source states that approximately 75% of U.S. households have a computer. This is compared with around 10% of U.S. households owning a DVR, and significantly less having a device such as a media center or Sling Box.

Estimates predict that by 2010, 50% of U.S. households will have a DVR -- but as of right now, we know that 51% of U.S. households already have broadband at home, and that number is growing much more rapidly than the DVR numbers. What these figures suggest to me is that more homes will have broadband than a DVR, and the shift to IP-based content delivery would mean that online VOD services would increase, negating the need for a DVR. Additionally, if the system is Web-based, it suggests that I could watch my favorites from a remote location as well, without having to pay extra for some new device to push the content out to the Web. And not to belabor the point, but once everything is IP-based and delivered in a streaming format, advertisers will feel safe once again -- because you cannot currently fast-forward the streams, and therefore you cannot skip the commercials.

So my point is simple. The numbers suggest that our focus not shift away from these emerging formats. Instead, we should be learning how to work within them all, in order to create a model that will work within 10 years and become the dominant format for advertisers to reach consumers using tried-and-true methods mixed with some established, supported new ideas. I still suggest you test these models, but don't tie your existence to them, and don't be afraid of change. We are nowhere near the end of this race.