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Washington, D.C. (November 18) -- By this time next year, you will be up to your ears in Internet TV.

The technology, which enables communications firms to deliver programming over the Internet to the TV via a Broadband connection, will be hailed as the next big thing by industry analysts. Wall Street firms will recommend that their clients buy companies that offer Internet TV services. And, the mainstream media will cover the new trend as if it were the Second Coming.

And, for once, they will all be right.

I predict that Internet TV will revolutionize the TV industry, giving viewers thousands of programming options. Unlike a cable "head end" or a satellite in orbit, an Internet server can store an almost unlimited amount of shows. For instance, NBC could put hundreds or thousands of shows on a group of servers, allowing viewers to watch everything from the first Tonight Show with Johnny Carson to last week's Crossing Jordan. (If, that is, the network owns the rights to the show; many past shows are owned by the original production companies, which might offer their own on-demand lineups. For instance, can you imagine what Major League Baseball could do with its library of World Series and playoff games?)

With a Broadband connection attached to his television, the viewer could download those shows with a few clicks of the remote. And, with a TV search engine, he could locate any show he could think of.

With Internet TV, television will go from being a convenience store to a giant supermarket. The viewer will scan the aisles for interesting programming, whether it's from a well-known network or a start-up TV service based in someone's garage in Silicon Valley. Much like today's World Wide Web, Internet TV will give an equal opportunity to the big and the small. Of course, the established media will always have an advantage due to marketing muscle and recognition factor. But they will have to work harder to keep their spot in the viewer's mind.

Birth
It will be a few years, at least, before millions of Americans have Broadband-enabled TVs. But in 2004, we witnessed the birth of Internet TV in the United States. Disney launched a Video on Demand service called Moviebeam, which enables consumers to download hit movies over a Broadband-enabled receiver. Microsoft and SBC yesterday announced a $400 million deal to deliver TV signals via high-speed Internet lines. TiVo and NetFlix signed a partnership deal to develop an online DVD rental service. And Akimbo, a start-up company, launched its Internet TV video player which delivers special interest programming over the Net to the TV.

As you can imagine, the actions have gotten the attention of cable and satellite operators, which now provide TV services to nearly 90 percent of U.S. homes. They are obviously not interested in letting a new business emerge that could bypass their companies entirely. So, I also predict that you will see both cable and satellite TV companies announce their own Internet TV divisions in 2005. (EchoStar, in fact, has already announced plans with SBC for a mid-summer launch of an online Video on Demand service.)

Internet TV will indeed be a big thing. The only question is which players will benefit the most from the technology. That's why Microsoft is particularly excited about yesterday's SBC announcement. If the SBC business goes smoothly, Microsoft could easily become the Internet TV software of choice for the cable TV industry.

Afterall, Microsoft didn't invest that $6 billion in the cable TV business for nothing.

Phillip Swann is President & Publisher of TVPredictions.com. If you would like to contact Mr. Swann, he can be reached at 703-505-3064 or at Swann@TVPredictions.com. And come back every weekday for a new prediction for 2005!