According to Forrester Research, the availability of free video is going to swamp the fee-based business. Forrester said while sales of online TV and movies will nearly triple this year to $279-million, sales will start to decline in 2008 as more free video becomes available. "In the video space, iTunes is just a temporary flash while consumers wait for better ways to get video. They're already coming," said Forrester analyst James McQuivey, who wrote the study and declared "free is going to win". Personally, I've never paid to watch a movie or a TV show on the Web but I've watched plenty of movies and TV shows on Web sites that offer just about anything you want for free. This means free may have already won, I guess. For more, check out Deep Jive Interest.

If you're willing to tolerate commercials, you can watch CBS shows for free online. The U.S. broadcaster has created CBS Interactive Audience Network, which will handle the online broadcasting of shows such as ''Survivor", ''Late Night with David Letterman'' and ''CSI'' through sites such as AOL and MSN. CBS' plans are just the latest way the TV industry is trying to experiment with different financial/broadcasting models to see what works with consumers. Obviously, free TV could be a big draw for consumers not willing for videos on a pay-as-you-go-basis. ''I think what we're seeing is a transition from the Internet as being kind of an experiment... to something that's a part of (networks') hopes and plans for a new profit center,'' said Joe Laszlo, an analyst with Jupiter Research, told Cox News Service.

I was talking to a friend last night at a Christmas party about how he had been approached by a start-up doing high-definition television but turned them down because he couldn't buy into their business prospects. In today's New York Times, there a short piece on why HD hasn't seen anywhere near the kind of pick up as large-screen TVs that have become all the rage as prices tumble. For all its benefits, HD continues to be a difficult sales proposition. For one, it is seen as a premium service by consumers, who still don't grasp the reason to have it other than being able to see a blade of grass in glorious detail while watching football or golf. That hardly seems worth the $10 or $15 that ARPU-hungry cablecos are trying squeeze from consumers. If the HD industry isn't careful, it may see itself in the same boat as the Bluetooth folks, who were crowing a few years but have disappeared. I'm not suggesting HD isn't cool technology or that Mark Cuban's HD dreams are misplaced, it's just doesn't seen cool enough right now.

Technorati Tags: HD, TV

Is everyone YouTube obsessed? If so, how come? Is it copyright issues? Jealously over its success? The possibility it might crack a huge Web 2.0 hurdle by actually doing an IPO? The blogosphere and media has been frothing at the keyboard lately - ranging from passionate defenses by Lefsetz's Letter and  Fred Wilson to  Mark Cuban's copyright rant  and the New York Times' interview with YouTube CEO Chad Hurley. This YouTube addiction is strikingly similar to what Skype experienced before it was snapped up by eBay for $4.2-billion. To illustrate my point here's how they compare:

                                          YouTube                                                        Skype

Young Founders            Chad Hurley, Steve Chen                   Niklas Zennstrom, Janus Friis

Industry Under Attack        TV, movies                                          Telecom/telephony

Initial Cost                           Free                                                              Free

Initial Business Model          None                                                             None

Current model              AdSense, contextual advertising                  Premium services

Biggest Fans                 Sequoia Capital, Fred Wilson                           Tim Draper

Biggest Enemies                Mark Cuban                                             ILECs, cablecos

Takeover Buzz                   Medium                                                          Hot

Value                            $2-billion (speculated)                              $4.2-billion (eBay's cost)

VC Raised:                    $10.8-million                                                   $21.1-million

VCs                               Sequoia Capital                             Draper Fisher, Index Ventures

Legal Issues                  No lawsuits...yet.                               Lawsuits: Streamcast, IDT 

Competition:              Microsoft, Google, MySpace, Apple       Vonage, ILECs cablecos

Traffic:                           100 million video streams/day            7M concurrent users (peak)

My column in today's Financial Post looks at how Steve Jobs and Apple are focused on getting a strong foothold in the digital living room - a potentially lucrative market also being targeted by Microsoft, Intel, Dell, Cisco, etc. My take is that Apple has as good a shot as anyone because it's a world-class industrial design company that makes ultra-cool, user-friendly devices. iTV - the much-hyped device that will wirelessly connnect the TV to Macs (and, I suspect, PCs) could be the next Newton but I doubt it if the iPod's success is any indication. Read/Write Web believes Apple will get the design of the iTV rights but thinks access to content (movies) will be a big challenge. For an extensive look at the iPod/iTunes empire, check out Daring Fireball.