From the Internet to Your TV


By Stephen H. Wildstrom I haven't been impressed by the plans of phone companies such as Verizon Communications (VZ) and SBC Communications (SBC) to distribute TV content over fiber-optic networks using Internet technology. They're pouring money into these networks, hoping to compete with cable, satellite, and broadcast -- all of which have perfectly good ways of sending TV content to homes.

But Internet protocol television, or IPTV, can take an alternative role: narrowcasting. A startup called Akimbo Systems is tackling this with a subscription service that delivers TV over broadband -- to your TV set, not your computer. An Akimbo box looks and functions much like a TiVo (TIVO). You buy the receiver for $229 and subscribe to Akimbo's stripped-down version of basic cable for $9.95 a month, or a lifetime payment of $169.

SPECIALIZED AUDIENCES. Once the box is set up, you get a program guide that resembles an on-demand cable listing. You choose your programs and agree to pay from 49 cents to several dollars for shows not included in the basic service. Because broadband connections travel too slowly to deliver broadcast-quality TV in real time, the service relies on downloading, which takes a few minutes to a few hours. The Akimbo box holds up to 200 hours of shows you can watch as often as you like, though some programs expire after 30 days.

Akimbo content is a melange of mainstream programming and channels designed to appeal to small, highly specialized audiences. The more familiar content, refreshed weekly, is made up of "on-demand" channels that offer a limited selection of shows from such standard cable channels as CNN, the Food Network, and the Cartoon Network's late-night Adult Swim programming. The History Channel, for example, offers episodes of a dozen or so of its shows for download. Turner Classic Movies offers about that many films in any given time slot for $1.99 each.

For people who already have cable, such meager offerings don't provide much incentive to add Akimbo as well. The appeal lies in supplying something different. Cable and satellite systems have limited capacity, so every channel has to justify taking up space by appealing to a pretty large number of viewers. The narrowcasting economics of an IPTV system are different. With unlimited channels, even programming that appeals to thousands of viewers, rather than millions, can make sense if it sells some subscriptions.

UNEXPLOITED POTENTIAL. That explains why there are Akimbo channels dedicated to sailing, billiards, yoga, vegetarian food, and the World Affairs Council of Northern California. There are also two extreme-sports channels, two martial-arts channels, and one that specializes in short films (mostly 49 cents each) full of pretty pictures of California's central coast.

In an increasingly polyglot country, foreign-language shows are a narrowcasting natural. But it takes time to sign international channels, so Akimbo has offerings only in Spanish, Chinese, and Turkish. More are planned.

Akimbo's programming clearly needs far more breadth and depth. Many of the cable on-demand channels provide only a handful of the shows you would get through a normal cable subscription. And Akimbo needs to serve a wider range of interests. For example, speakers of such languages as Korean, Vietnamese, Tagalog, and various Indian and Pakistani tongues are barely touched by conventional TV. They might flock to Akimbo if programming were available.

EVEN MORE CHOICES. I also suspect that, over the long term, the Akimbo box, which adds significantly to the cost, will disappear. This technology cries out to be embedded in set-top boxes or other systems that include a digital video recorder. (Nobody wants to stack yet another box in the home video rack.)

But the concept of delivering specialized television programming over the Internet to TV sets could be a great way to improve choices in a world where, even with 500 channels, there's often nothing to watch. Wildstrom is Technology & You columnist for BusinessWeek. You can contact him at techandyou@businessweek.com


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