Skype Jumps Aboard Online Video Bandwagon

19 December 2006

LUXEMBOURG: Skype founders Janus Friis and Niklas Zennstrom - the nearest to Sergey and Brin clones Europe has yet produced - this week unveiled Venice Project, which they hope will do for web TV what Skype did for online telephony.

IPTV (internet protocol television) is the current flavour of the month for media and telephone companies enmeshed in the cyber-goldrush.

Says Friis: "At the time we launched Skype, broadband capacity was extremely ripe for communication. Now, three years later, it's the same thing for video: you can do TV over the internet in a really good way. TV is a huge medium - that's something we'd like to be a part of."

Skype, these days part of online auction house eBay, will need to woo the TV industry establishment whose traditional business models will be threatened by IPTV.

Based in the UK, where Venice Project operates out of four locations, the Skype duo will likely find themselves antler-to-antler with telecoms and broadcasting titans BT and the BBC, both of whom are already well down the IPTV road.

Friis is not fazed. In an interview with the Financial Times, he insists Venice can fight its corner against the big boys in a field that is already overcrowded. "The overall picture is that this is happening. Video is moving online, and people have to find strategies for that," he told the FT.

In its blog, Venice proclaims its mission to be "fixing TV, removing artificial limits such as the number of channels that your cable or the airwaves can carry and then bringing it into the internet age".

Moreover: "As well as exploiting new tools, we're also bringing something back from that old TV - of having a shared experience with your friends, something you can talk about, rally around and enjoy with others."

Currently in beta pilot by 6,000 volunteers, Venice displays high-quality, full-screen video on ordinary display units. Users download software to their PC or Mac enabling them to search and select channels from a screen menu.

Although the beta version is intended only for computer screens, Venice will ultimately also be available for digital TV sets. Says Friis: "It will be a success if advertisers like it, content owners like it and viewers love it."

But Venice ceo Fredrik de Wahl takes a less ingenuous view. He knows it is unlikely to be the only IPTV service to succeed: "We want to be one vehicle for them [programme-makers] to monetise their content. We will prove we can capture more viewers, but you don't sell just Prada shoes in Prada stores."

Data sourced from Financial Times Online; additional content by WARC staff