Can Zillion TV succeed where so many others have struggled?

Remember Akimbo? Or Moviebeam? Do you own an Apple TV? Or a Vudu?

Probably not. Which just goes to show that set-top boxes that bring video, via the Internet, to the TV are a really tough sell. Why? Well because most of us have a fantastic device in our living room that brings us significantly more content than is available from any of those. It’s called a cable box. Or a satellite box. Add in the increasinbly ubiquitous DVR functionality and you don’t really have to miss anything.

Paying $100 or more for another box in your living room, and the more money for each piece of content, simply isn’t appealing to many people. Especially when there’s a growing supply of on-demand content from your cable or satellite provider. And video game consoles, which many of us having in our living rooms for other reasons (like, ummm, playing games), also feature video on-demand.

Nonetheless, here comes Zillion TV. In some senses, it’s the exact same as what has come, and struggled, before. You get a box (though this one is free) and then pay to rent or purchase movies, TV shows, and other video content on-demand.

But there’s something different about Zillion. After all, as the LA Times reported, it did get funding from Disney, Warner Bros., Sony, NBC U, and Fox, as well as several VC firms. They must see some potential.

According to Wired, one is that Zillion is partnering directly with ISPs to ensure smooth playback. As anyone who has sat through annoying buffers, or interruptions, in streaming video can attest, that’s a big deal (though it does bring up Net Neturality concerns).

The other is advertising. Zillion CEO Mitch Berman (formerly with interactive TV company Open TV and HBO) thinks he can finally achieve what many technologists have foreseen: targeteds ads and integrated purchasing. To be specific, you can tell Zillion what type of products you’re interested in and it will serve ads directly to you. Or, if you see a killer product or piece of clothing on the screen, you can buy it with the click of a button. That could bring in much higher revenue rates for the shows. Which is why Berman is planning to let Zillion users choose ad-supported content as one of three options along with rental or pay-to-download.

The one option that’s missing, of course, is standard ad support a la Hulu. As I’ve been writing this week, Hollywood is none-too-happy with people giving up their cable or satellite subscriptions for the paltry revenue generated currently via Web TV viewing. By investing in Zillion, they’re signalling that they think this model could bring in the money they need from viewers who cancel their pay TV.

But to get anyone to do that, Zillion needs content, pure and simple. It claims 40 content providers on board. And one would assume there will be at least some stuff from its five studio investors. But as the LA Times noted, Hulu owners Fox and NBC U are only planning to offer their content via pay per view. Unless Zillion really has most of the same content you can get on TV, and makes it available very soon after it airs on TV, it’s hard to imagine why people won’t stick with those little boxes they already have that work quite well.

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