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AOL Debuts In2TV Video Service

You've got re-runs.

That could be the slogan of AOL's new In2TV streaming video service jointly offered with Warner Brothers. Financed initially by online ads from Intel, Kraft Foods, Kia Motors and Hershey, the new portal provides broadband consumers with free full-length videos of classic television, including "Kung Fu," "F Troop" and "Welcome Back Kotter."

In2TV, first announced in November, highlights AOL's dual drive toward increasing broadband users and revitalizing the ISP. Warner called the service unprecedented. In2TV puts television viewers in charge of their own TV schedules, according to Kevin Tsujihara, president of Warner Bros. Home Entertainment Group.

The reported previously new service includes comedy, drama, cartoons, superheroes and horrors, action and classics channels.

While In2TV is now a free ad-supported service, Fred Mcintyre, vice president of AOL Video, told internetnews.com the ISP plans to monetize the offering in the future, including a subscription plan. Mcintyre refused to say how much videos might cost to download.

Mcintyre called AOL's arrangement with Warner Bros. a great starting point, adding that the company has been talking with both cable and broadcast content providers.

Advertisers support In2TV with up to two minutes of commercials per 30-minute video, according to AOL.

Although the streaming television service is currently available for only Windows XP users with Media Player 8, Mcintyre said there are plans to support Apple's FairPlay DRM used to protect music purchased from iTunes.

Today's announcement is part of a broader trend, according to ABI Research analyst Michael Arden.

In as little as five years from now, Arden expects broadcast television will be a thing of the past, as all TV service shifts to on-demand. Portals such as AOL's In2TV will serve as a bridge between today's broadcasters and eventually a video version of Google.

Arden believes Internet companies will create search engines that behave like Google, but offer the features of a personal video recorder.

In a possible step toward that vision, AOL in January acquired Truveo, whose Visual Crawling technology the ISP will use to find and present video files on the Web.

AOL has also offered searches of video from MTV Networks.

Though Todd Chanko, a JupiterResearch analyst, called the service the greatest thing since sliced bread, he said such a drastic transformation isn't likely. AOL won't compete with traditional TV, he said, noting that there are 49 million broadband households in the U.S. and 112 million homes with television. (JupiterResearch and internetnews.com are owned by Jupitermedia.)

Only 27 percent of homes capable of using video on demand (VOD) have tried it, according to JupiterResearch.

Both AOL and Warner Bros. want a part of the growing VOD market, expected to top $500 million this year. VOD has become a valuable weapon for multiple service operators (MSOs) to combat the growth of satellite.

While AOL said In2TV isn't competing with Apple, a number of broadcasters and movie studios, including ABC and Disney, have signed deals placing their shows before iPod owners.

If cable companies have VOD, telcos, such as Verizon and AT&T are pursuing IPTV and plans to accelerate fiber rollouts, internetnews.com previously reported.

AOL's announcement may be in response to similar plans by Yahoo, Microsoft and Google. Google enhanced its picture search option to seek video clips.