AOL Rolls Out Internet TV Service

The interactive service lets fans watch episodes from dozens of shows every month, do quizzes and puzzles, and participate in polls tied to the shows.

Programming is organized into six channels -- comedy, drama, cartoons, vintage shows, action/adventure, and science fiction -- with two more to launch this summer.

Broadband Is Key

For advertisers, In2TV provides opportunities for sponsorships and associated banner ads. Video ads are limited to a total of one or two minutes within each 30-minute episode.

The growth of high-speed Internet use is ushering in an era in which TV programs no longer will be shackled to the television set.

Already, shows are provided through online services such as Google, Amazon.com, and iTunes, which has sold some 15 million video downloads to date. CBS, another company that has established an online TV presence, is offering Web broadcasts of games in the NCAA basketball tournament that kicks off today.

With the Warner library at its disposal, AOL has a big advantage over the competition in delivering online TV, even if the content is dated, said Yankee Group analyst Adi Kashore.

"This is programming that is not generating much revenue for Warner, but is still valuable," he said. "And it appeals to a different, older audience than most of the other content currently made available online."

Evolving Industry

While online TV is still in the nascent stage, Kashore said, efforts like In2TV are providing a nudge to the market.

"This plays to the strength of broadband by aggregating a large audience across a large geographic area," he said. Still, the analyst noted, it will take some time for online broadcasts to match the popularity of video rentals and pay-per-view services.

The landscape of the TV industry is evolving quickly and moving beyond the network-run models of past decades, according to Saul Berman, global partner for media and entertainment at IBM Business Consulting Services.

"Providers of television content creation, packaging, programming, and distribution must act quickly," Berman said in a recent interview. "They have to implement strategies that will serve a fragmented audience and also fund new delivery channels, whether it is mobile devices, the Internet, or on-demand TV and IPTV (Internet Protocol TV)."