by LAGAN SEBERT

TiVo, Apple TV, On Demand, Current TV, and YouTube, each in their own way seem to suggest one thing: the walls separating Internet and television are slowly falling down. Each one of these products brings television technology closer to being able to simply type in a Google search for anything from the 1956 World Series to the latest in international news and watch it on a television whenever you want.

For consumers, the idea of being able to watch whatever you want, whenever you want is a no-brainer, but the free-flowing distribution mechanisms created by the Internet are a scary thing for media corporations. Record companies have watched their revenue streams turn to a trickle after iPods and music downloading became the prevalent way to acquire and listen to music.

As trends continue and bandwidth increases, Web searches become more sophisticated, data storage becomes cheaper and technology makes it easy for anyone to produce their own content, television executives could lose as much control over TV as record companies have over music.

A report released by The Conference Board and Taylor Nelson Sofres said 16 percent of Americans watch online video, and according to a poll conducted by the Associated Press and Time Warner Inc.’s AOL last September, one in five online video viewers have watched or downloaded a full-length movie or TV show.

Yet as far as online video has come, many feel it is still in its infant stages. Jonathan Troen founded a number of new media companies and headed the broadband division of ARTISTdirect, one of the first successful online entertainment networks that worked with online video. He said online video is evolving rapidly.

“Video on the Internet has only been a reality for a little more than a decade. Radio took more than a decade to take off. TV took more than a decade. When FM Radio was introduced, it was laughed at. Cable TV and Satellite TV all took time to mature. More than anything, the Internet is just a different distribution medium, and in time, people will learn how to use it best, and it will make a lot of money,” said Troen.

Observer photo provided by Paul Conway.
Promotional still for Fran and Ramis show.

According to writer and actor Paul Conway, online video is already a profitable medium for some. He writes and stars in the webisode “Fran and Ramis” along with co-creator Warren Ostergard. The webisode is cross-promoted by Heavy.com and Warner Brothers, and appears on the online video network Heavy.com.

“Whether through direct corporate sponsorship with ad banners and commercial inserts, or by loading user-friendly software such as Google’s Ad-Cents, many people are discovering how fast the Internet is becoming an accessible platform for creating revenue,” said Conway.

While online video pioneering sites YouTube and MySpace focused on quantity rather than quality, many new niche sites are emerging that are dedicated to higher-quality video targeted to a specific audience.

“Heavy.com seems to cater to an audience of young men between the ages of 16 and 25. They have been successful at maintaining a consistent monthly viewership of about 20 million,” said Conway. He said as online video matures and tech-savvy young people become the main media audience, he thinks watching shows through the Internet will become the norm.

Troen agreed that young Web-savvy viewers would drive the growth in online video, but said it will not become a real competitor to television until he “can watch the Internet on a big screen in [his] living room – easily.”

This future could be closer than many think. Already Internet video is moving beyond the 3-by-5 inch grainy boxes it is typically constrained to. Apple TV allows users to download content from iTunes and play it through a television and one of News Corp’s newest ventures is a video downloading Web site created in cooperation with NBC called hulu.com. NBC and Fox-TV shows and movies are streamed from hulu.com at high resolution, free of charge, and appear on the entire computer screen.

“Since the barrier to entry is a lot lower, you’ll see more individuals and small companies get involved. Those that become popular will often be acquired, but there will always be an opportunity for someone to get online and take a chance,” said Troen. Many online video sites are taking a chance now and banking on the future of online video.

Realnews.com is an independent online video news channel. The site is funded by viewer donation. On its home page, a funding ticker announces the network has raised $245,017 so far in 2007, the first year of the channel. The channel provides high-production quality online video news from around the world, and tags its video stories with their motto, “because the future depends on knowing.”

Daily news video blogs, such as the New York based Rocketboom.com, provide quirky localized news sources. Art-video sites, such as scratchvideo.tv, fat-pie.com and davidlynch.com, are bringing high art video to the web, while user-generated Web site and television channel Current TV is raising the bar for “citizen journalism” and integrating Internet chat groups, viral Web videos and unconventional Web-length programming into its television channel. Other news sites, such as MSNBC, Yahoo! News, and CNN, continue to solicit video and photo material from users through their Web sites and Mark Cuban’s HDNet, streams HDTV original content online such as Dan Rather Reports.

Newspaper Web sites, such as those of The Washington Post and The New York Times, are investing heavily in original video content. As the lines blur between television and the Internet, premiere newspapers could find themselves competing directly with television news sources for viewers.

Troen said that while the Web lowers the barriers to entry it is still far from a level playing field. Online giants such as News Corp, Yahoo, and Google wield much more power than your average Internet startup.

Yahoo! News is the most popular news site on the Internet. In the last year, the site has more than tripled the amount of news videos it streams. Yahoo streams video provided by television news stations, AP and Reuters, as well as original content from Yahoo video journalists, including Richard Bangs and Kevin Sites. Sites, a former NBC correspondent, became Yahoo’s first news correspondent in 2006. He travels to areas of conflict across the globe as a one-man backpack journalist, turning in weekly video stories to Yahoo! News from everywhere from Darfur to Iraq to Cambodia.

Photo provided by Neil Budde
Neil Budde is the vice president and editor in chief of
Yahoo! News, Sports and Finance

Neil Budde is the vice president and editor-in-chief of Yahoo news, sports and finance. He says that while there is a huge demand for video online, he doesn’t think that the Internet will fully merge with television.

“In online journalism each of the different media support each other and serve a different purpose … What a lot of users want is to get to information as quickly as possible, and for a lot of things, telling it in words is the best way to do that,” said Budde.

Budde said a lot of good online storytelling uses a combination of printed words, video, still photos and audio. He said it’s most important to be smart about which form you use to tell different elements of a story.

With unique capabilities, such as interactivity and database-based content, the Internet provides some features that television cannot compete with. Troen said another way the Internet could be considered superior to traditional television is in the greater amount of programming available online. Even in the world of digital cable with hundreds of channels, television does not provide the kind of variety found online, and offers a plethora of opportunities for independent producers.

“As long as you’re happy to make your program, put it up there, get close to the audience that finds you, and not worry about making the big money – then the Internet offers a great opportunity that TV can’t compete with,” said Troen.

Money made from online video advertising and downloading is relatively small, but media executives obviously expect it to increase. If they didn’t, they probably wouldn’t be fighting so hard against a writers’ strike that is demanding increased profit share for video distributed online and to mobile devices. While homemade videos of middle-aged men dancing and dogs singing may have been an innocent beginning to online video, it’s now positioned to shake up the media industry in a big way.