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 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 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, 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.

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