AOLTV, TW and 'The Tail'

Last week we issued an ILM White Paper about the future of TV (IPTV and video search). One of the strongest of the Internet incumbents in this category is AOL, with its broadband portal and video assets. Here's a deal that leverages those assets and brings the long-awaited promise of Time Warner's content to the portal.

AOL will launch a " new broadband network," In2TV, in 2006. It will offer what the company is calling "vintage TV" but will also include original interactive content.

According to the public statements of the companies, content will be organized by "channels" according to show genres, comedy, sci-fi, drama, etc. None of this content will be available through conventional TV.

Opening up hundreds and hundreds of shows for online viewing will certainly draw some additional viewers (will they be baby boomers or new audiences?) away from the mediocrity of broadcast TV to the Internet and create a new ad inventory for marketers. Cable has already done this to a degree, but not with complete "on-demand" capability for users nor with the targeting (context, geo, behavioral) that the Internet provides to marketers.

It's not entirely clear how audiences will react and how successful something like this will be. But this offering is a clear manifestation of "The Tail" — I can watch that one episode of that one show that I loved (or heard about) from the past. The economics are obviously totally different online than they are on conventional TV.

The fact that TW's video library is being offered is an attempt to avoid dilution of the value of TW's current productions and cable assets (TW owns HBO and Turner, for example). Let's hope that the effect of all this audience fragmentation and competition will be a net gain in quality to lure audiences to programming. Alas, however, that may be a pipe dream. I hope not.

The transformation of TV is starting to accelerate, with the video IPod, video for phones and broadband video/video search. Beyond audience fragmentation, nobody can be quite sure how all this will play out yet.

But Pandora is now clearly out of the box.

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Here's Om Malik's "riff" — the "archive monetization principle." And more from The N.Y. Times.