Web video is finding its way into the living room

TV on the Web is here, but with a landscape dominated by musicvideos, indie shorts and vintage TV skeins, there aren’t too many consumers ready to unplug from their cable and satellite subscriptions.

However, with broadband adoption soaring, new devices that blur the boundaries between TV and the computer, and a generation accustomed to finding entertainment on the Internet, Web video is nevertheless finding its way into the living room.

“Right now we are at the novelty stage, but that will play out over the next year or two,” says AOL’s exec VP of media networks Kevin Conroy, who likens the nascent market to that of digital music in 1999 or the early days of pay TV.

AOL, Yahoo!, Google and News Corp. are all racing to perfect video search, and at least a half-dozen companies are producing hardware and software to allow consumers to stream Web-based video straight to their television sets.

The market, as it’s evolving, is first being filled by content either of little value to the traditional broadcast networks or syndicators and content generated specifically for the Web, such Yahoo!’s “The Runner” and AOL’s “Gold Rush.”

The first approximation of a broadcast network to appear on the Web will be AOL’s In2TV service, jointly owned with Warner Bros., set to debut this month, containing more than 14,000 episodes from vintage TV series from the WB library including “Welcome Back, Kotter” and “Chico and the Man.”

With billions in advertising and more than 100 million television households, the broadcast networks have trod cautiously in the Web TV arena, attempting to keep up the demand for interactive content by flooding iTunes, Google and their own Web sites with pay-for-play downloads of hot shows such as “Lost,” “The Office” and “Survivor.”

But the network-affiliate broadcast business model that produces television’s biggest hits breaks down if those same shows that sell advertising are available on the Web and viewers can see them without tuning in local stations.

Since the networks control the most popular TV programming, they’re in a position of power as Internet-enabled devices expand the market for online media.

“The over-the-air television network is not going away, but there will be many different venues to see our content, and they will include many digital forms of delivery,” says NBC U Television prexy Jeff Zucker.

Local TV stations are preparing for a future of Internet broadcasting by converting their station Web sites into sources of video content, mostly of local news.

“The importance of new and emerging media platforms for TV stations cannot be overstated,” says Reid Johnson, CEO of Internet Broadcasting, which manages Web sites for station owners like Hearst Argyle, McGraw-Hill and Post-Newsweek.

The explosion of Internet video has given rise to a clutch of online middlemen such as Brightcove and Roo Group, which syndicate video to sites across the Web, video search engines like Blinkx and Truveo (which was just acquired by AOL), and community sites that host indie video like YouTube.com.

It has also give rise to technologies that allow consumers to partake of online video through their television sets –without a computer.

ITVN and Akimbo Systems make their own versions of a box, which organizes online video so consumers can access it through their televisions with a remote.

“Content owners are excited about this; we give them the opportunity to have their whole catalog available — with no bandwidth limitations,” says CEO Charles Prast.

Dave.tv has programmed more than 100 Internet-only channels and plans to launch a set-top box later this year.

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