'Highly disruptive' startup offers live TV on the Internet for $5 a month

Jim O'NeillIf you've been chewing antacids because you've been worried about over-the-top video cannibalizing your IPTV business as you slowly develop a TV Everywhere strategy as a defense, it may be time to pop a Lunesta because ivi--a new "online cable system"--may keep you up at night, too.

The Seattle-based start-up, which describes itself as "highly disruptive," is launching a live Web feed of more than three dozen broadcast channels, including ABC, CBS, NBC, FOX and Telemundo to Macs, Windows and Linux computers. It says it will feed to mobile devices, including the iPad soon. ivi claims it already has more content than Hulu, and will be adding more channels over time, and it will maintain an a la carte option as well. The platform is available via a downloadable app for $4.99 a month after a free 30-day trial. Want DVR functionality? It's yours for an extra 99 cents a month.

CEO and founder Todd Weaver says the company is taking dead aim at the cable industry, which, he says, "has spent countless ivi Internet TVmillions of dollars on so-called 'TV Everywhere' solutions in a blind effort to prop-up outdated technology and business models."

"ivi empowers its users to experience 'TV Anywhere', offering them major broadcast channels delivered live to their laptop or desktop, anywhere on the planet," he said. "Whether eventually integrated into Google TV, Apple TV, or meshed with an existing platform's digital strategy, ivi makes the set-top-box and any 'Web to TV' products obsolete. Instead of attempting to bring the Web to the TV, ivi intuitively brings TV to the Web."

At the moment, the company has no contracts with any broadcasters, but ivi claims it doesn't need to, since it's an online cable system and, as long as it pays fees to the U.S. Copyright Office--which get disbursed to the broadcasters--it's covered. Although Weaver says it's not inconceivable that the company will face some legal challenges.

Trust me, were I a pay-TV operator, I'd look for a way to slow this train down before it gets moving too fast.

A trial of the ivi player is pretty impressive, although you'll need to be satisfied with a low- to standard-definition signal. There's an option for HD, but I could never get it to work (my connection from home was a little slow this morning). Frankly, that didn't bother me much as I watched the news and traffic and weather on Good Morning America, The Early Show, and Today over coffee. Even an aging Robert Plant looked pretty good in LD. The bulk of the channels available currently are affiliates from Seattle and New York; but that's good news for me as I assume I'll be able to watch the Giants games instead of the Lions.

The channel guide is straight-forward and easy to navigate, something cable operators could take a cue from, although the listings, strangely, stopped at 3 p.m. today, but that may just be a matter of start-up jitters. Speaking of which... there weren't any. No jitters, no buffering.

The cable industry lost 711,000 customers in the second quarter, its worst performance ever. Some of it, no doubt, was due to the economy's continued sputtering in much of the country, some of it due to a continued increase in the price of cable services, and some of it--albeit a tiny portion--was due to cord cutters going over the top.

Weaver says ivi can offer the industry a helping hand by bringing cord-cutters back into the fold with a different model.

"Recognizing the fate of the landline telephone and the digital debacle experienced by the music industry, ivi offers the broadcast and cable industries innovation they do not have time to build. Consumer-friendly features like a la carte are built in the ivi technology and are available as a turn-key solution to shift cord-cutting losses into online paid views for content owners, offering consumers the choice they have long demanded, with a compelling solution to a multi-billion dollar problem," he said. "Forcing consumers to pay for undesired content did not work for the music industry, and it is equally unsustainable for the cable and satellite industries. There is no incentive to fight us, when they should simply join us."

Weaver says ivi is a solution... maybe, but it's also a heck of a threat to an industry already looking for ways to stop the bleeding. What do you think?-Jim