Innovation & Design

Zattoo, the New Kid in Online TV


Want to watch TV anywhere via broadband? Joost's the better known service but a Swiss startup, now in beta, may give it a run for its money

I don't own a TV set but I do have the BBC and CNN and the major channels from various European countries running live on a corner of my laptop screen—thanks to Zattoo.

Online video is one of the hottest trends of the moment, pushed by the convergence of broadband, compression algorithms, and sites for sharing clips and more. Yet so far, TV broadcasters have viewed the Internet with lots of skepticism, for example asking YouTube to remove files of broadcast shows, despite the fact that such user-led, viral marketing tends to boost a show's popularity.

Rare are the broadcasters, in Europe or the U.S., that let you view programs in full online. Their often sophisticated Web sites are meant to attract online ad money, rather than to deliver video feeds to the online audience.

But here's a safe prediction: That will soon change as demand for longer, high-quality, online video content grows. And the technology that will make it happen may come from Europe.

Coming Soon to Computer

Unless you've been on an extended exploration of the deep sea for the last couple of months, you've probably heard of Joost, the online TV venture. Founded by the Swede Niklas Zennström and the Dane Janus Friis (the pair famous for having disrupted music distribution with Kazaa and telecommunications with Skype), Joost is being generously covered by "old" and "new" media alike. The startup is currently running an invitation-only beta test with a few thousand people (it runs only on PCs and Intel-based Macs for now) and is busy signing licensing agreements with content owners, such as broadcasters.

Zattoo is a similar effort. The legal service streams live TV content (including everything a channel airs) to your computer. And while the one-year-old startup, based in Zurich, may be the underdog, it deserves some ink as well. Their service is currently in beta too (so the images sometimes flicker, depending on your bandwidth) and for legal reasons it is geographically limited.

If you're not based in Switzerland, you won't be able to download their software yet (though you can sign up for an e-mail alert when it's made available in other countries, which I'm told will happen within days, starting with Britain and Denmark). If you are in Switzerland and want to try it out now, just go to their site and register, download the software, and start watching (it runs on PCs and all Macs and soon Linux).

The Supernode Effect

The Zattoo interface is a simple window with a volume controller, a stop button, and a menu of channels; to change the channel, click on the one you want. The technology behind it is, in contrast, rather complex. It was originally developed at the University of Michigan at Ann Arbor by professor Sugih Jamin to distribute scientific conferences online, and is based on a real-time, peer-to-peer design.

The software that users download is both a client (it allows users to view content) and a proxy server (if the central server is overloaded with requests, the system "rebalances" the load by streaming some video directly from one user's machine to another watching the same channel). This is very similar to the Skype approach, which transforms some users into "supernodes." Joost is based on this principle, too.

Unlike Joost, Zattoo offers no time-shifting, no search, and no tagging: just old fashioned TV channels—live and unedited. These will be complemented by additional offerings, such as channels devoted to music, festivals, movies, and so forth. Some will be offered for free, some will be bundled and sold to subscribers á la the cable model. It will also be possible to subscribe to individual channels. Content owners will feel that their rights are adequately protected because no part of the encrypted stream is stored anywhere, and they will receive a fee per user, just as cable operators do today.

Saving Content: A Legal Minefield

Neither Zattoo nor Joost will allow programs to be recorded, but given the TiVo experience, I suspect that a "save as MPEG" button will be very high on the list of future features requested by users or future plug-ins developed by independent programmers. Although for either company, implementing the feature would create a legal minefield.

With both Zattoo and Joost, TV is uncoupled from TV sets. Get Zattoo and you can watch a local or national channel at the office or on the go—basically anywhere you can establish a broadband connection. The word "zattoo" means "big crowd" in Japanese. For now, it has about 150,000 beta users in Switzerland with other countries, including the U.S., on tap.

When both services exit beta testing and are released to the world, Joost will have a huge advantage: The 100 million-plus people already using Skype will almost certainly receive an unsolicited e-mail from the founders. That will make for an interesting big vs. small, fast vs. faster race.

Bruno Giussani is a Swiss writer, tech entrepreneur, conference host and the author of "Roam: Making Sense of the Wireless Internet." He blogs at http://www.LunchOverIP.com. For BusinessWeek.com Giussani writes the monthly EuroScan column, discussing innovation in Europe.

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