Live TV on the Web for $5? Firm doubles down on a live streaming video bet

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Jim O'Neil

Last week, comScore reported that Americans are now watching 1.4 billion minutes of live streaming video, an increase of nearly 650 percent in the past year. That's a heck of a number, but when you consider the starting point and the acceleration in this space--in terms of both technology and the fact that Americans are more willing to watch streaming video now that it's less likely to be interrupted by buffering or lost connections--it's really not that surprising. But I'd be willing to wager that next year, the number could be an order of magnitude larger.

That's a bet Todd Weaver, CEO of ivi, an "online cable TV provider" that came out of stealth mode yesterday, is counting on.

The company is providing a live Web feed of more than three dozen television stations, including all the networks in Seattle and New York, Telemundo and several international streams to computers running Windows, Mac and Linux. An iPad app is being vetted by Apple, and Weaver says connecting with other mobile devices is coming. And, yes, ivi works with most connected TVs as well. He says the company is testing its feed from the L.A. market and intends to bring those channels online in about 45 days. The company charges consumers $4.99 a month, and they can add an extra 99 cents for DVR functionality.

I've been watching it for two days, and it's pretty impressive. While the quality hovers around "standard," I've yet to lose a signal or have the stream interrupted by buffering or freezing.

And that's the company's mantra: to deliver continuous live TV. "We're not too worried about the quality being HD, although we could deliver that in the future, it's just a tweak of the dial," he said. "But the U.S. broadband network is going to have to step it up for us to be able to do that." Instead, he said, the company delivers a standard definition stream.

"Scale and security are major issues for streaming live in the Internet," Weaver said. "And buffering, cramming data down a variable pipe. That can make watching live streaming a terrible experience." The company appears to have developed a solution that delivers to the consumer a consistent and steady bandwidth stream. "It's a matter of constant uplink and downlink measurement," he said. "We deliver a highly compressed but high quality product."

Weaver, who has been in the online video industry for more than a decade, says he has "18 dedicated, hard working guys" working with him to make ivi a success, already has several angel investors in hand and is in talks with others. "We're pretty lean," he said.

He may need the extra cash to fight what he knows will be legal challenges from the industry.

"We know we're going to see knee-jerk reactions from broadcasters and from content providers, but we think surviving potential legal issues is really about education," he said. "Content owners want content online, they want to be protected and they want to be paid for it. They've been looking for a viable company like us that has enough subscribers to make it worthwhile."

Weaver wouldn't say how many subscribers the service already had, but said it was growing rapidly. "We know we'll get the early adopters who already have cut the cord, and we believe that as we get out there more we'll see more people who want to cut the cord. They're the ones who already go to Netflix for movies, or go to Hulu to watch older content."

That growth will allow ivi to compete with major providers, he said.

"It's easier for us to scale than it is for a traditional cable company," Weaver said. "We don't have to send a van to your house, drill a hole in the wall for a cable and install a set-top box."

Weaver said ivi also has the ability to do video on demand, offer pay-per-view programs, and to add channels without dropping others. And, he said, ivi can offer it a la carte or bundled, depending upon what the customer or content programmer wants.

"The key difference with our platform is that we can add all those component parts," Weaver said. "We have created a broadcast costing model for distribution, but have retained the transactional components of the Internet. As ad companies catch up, advertisers will be able to use the viewer information we collect to be targeted, and you can also have transactional ads."

Weaver said ivi has been in stealth since it launched in 2007, working on scale and security issues and developing a proof of concept. It had a sneak preview about a year ago, but the team has "hunkered down" since then to hone the product.

"We hope to remain innovative," he said. "Right now, we're not looking to compete with HD in the marketplace because we really just need to form a beachhead now. And we are, we're forming a beachhead with the ability to deliver live content to any connected device."

Live streaming--as the 650 percent growth figure indicates--is arriving like an express train in a local station. YouTube and Hulu saw just a fraction of the growth last year, again, partly due to scale. In a blog post, comScore's Andres Palmiter said viewers are growing more comfortable with live streaming as an option.

So, does ivi survive? What's your bet? -Jim

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