The founder of Fastweb, Italy’s number-two telecommunications company, has reached 1,1-million Italian customers and is now seeking to bring internet television to as many of the world’s 300-million broadband users as he can reach with his new venture, an internet TV network called Babelgum.
Babelgum, which will be introduced publicly in a testing phase this month, uses peer-to-peer technology supported by an in-house server to deliver free video to computers anywhere in the world where there is a broadband service — going head-to-head with Joost, founded by the internet gurus who invented Skype.
”We’re here, the technology is cutting-edge and the timing is right,” Fastweb founder Silvio Scaglia told foreign reporters last week.
Whereas competitor Joost has been snatching up content deals with Viacom, Scaglia is going after the niche market with Babelgum by seeking to offer a broad catalogue of specific content that potential viewers would have hard time finding elsewhere — the so-called long tail — without having to conduct computer searches constantly.
While content deals were still being worked out, Scaglia said the video provided will be professionally produced — contrasting with the amateur footage that has fuelled YouTube’s popularity.
Babelgum, which is launching in English, will start by offering a minimum of $5 to a content provider for every 1 000 hits.
”We think it is important to explore ways of doing something that is different from television, which looks for big audiences and prime-time programming,” Scaglia said.
Scaglia said he began exploring the idea of internet TV two years ago, but added that only recently had conditions become ripe to launch such a venture: a sufficient penetration of broadband connections, a well-developed peer-to-peer network and decreases in the cost of computer memory.
Fastweb was the first company in the world to offer video on demand over the web — but what has captured Scaglia’s imagination with Babelgum is its potential to reach anyone with a broadband connection and provide viewers with unique content, for free. By contrast, users of Fastweb’s IPTV service must be Fastweb clients.
”Here we have peer-to-peer protocols. There could be bottlenecks. It doesn’t have the same certainty as the Fastweb IPTV. This is not high-definition. It’s more open and less guaranteed,” he said.
But Babelgum co-founder Erik Lumer said the peer-to-peer technology makes the platform more efficient as the number of users increases — because data that streams into video can be picked up from other users as well as from Babelgum’s server.
To protect copyright, however, the Babelgum platform will not allow users to download content permanently to their PCs or share video files.
Besides a core set of predetermined channels, Babelgum is developing software that will allow users to custom-design so-called smart channels so that content delivered to them matches their stated interests, in much the same way that Google AdSense seeks to tailor its advertising.
Babelgum plans to launch advertising next year, which Scaglia said will be its major source of revenue. At the moment, Scaglia said there are no plans to phase in fees for viewers.
Scaglia has invested €10-million of his own money so far, and projects that it will take about €50-million to €60-million yearly investment to keep going — much of it in content deals that are still being worked out.
He insists there is no business model for what he is doing and can’t say when the investment might begin to pay off — or where the technology may lead the business.
”Technically, we could do a pay-per-view or a pay channel,” said Scaglia, who offers the metaphor of the technology having transported the business across the ocean to an unexplored continent. ”We’re just on the beach. We think the long tail can bring us to green pastures.” — Sapa-AP