It's boom time for new content distribution technologies and Internet TV is being seen as the "next big thing" with operators like Joost, YouTube, Jalipo, Zatoo, Babelgum, Vuze, BitTorrent and Veoh either jumping into the market or beefing up their services. In 2006 $844 million was invested in these types of service, and this year the NBC Universal and News Corp. JV service Hulu has been valued at $1.0Billion after a $100m investment from private equity firm Providence.

In the US consumers under the age of 45 now consider the Internet to be the most "essential" medium for them out ranking the old winner TV. And video streaming is becoming increasingly popular with market research showing that over 70% of internet users stream video every month and watch 2 or 3 clips a day on average.

At 3Vision we believe Internet TV is part of a worldwide mega-trend where consumers want access to content on their terms - this means on-demand, on whatever device they like and wherever they want to watch it. What's more they want to interact with the content, edit it and share it with their friends!

Free to air broadcasters need to use the medium as a means to expand their distribution just like they did with satellite and cable - but then stick with their established model of offering content to viewers free and generating revenue through advertising. Whereas Pay TV services can satisfy subscribers more effectively by offering flexible on-demand versions of their services like Sky Anytime in the UK and therefore reduce churn or indeed generate additional subscription revenue.

For content owners the situation is more complex - they need to strike a balance between supporting their traditional clients in expanding their businesses on to the internet while also looking at ways to monetise their content libraries by licensing to new players in the space.

The role of the pipeline operators - telcos, cable companies and ISPs - is also under debate. On the one hand consumers want the flexibility to use whatever site they want and on the other the operators have to fund ever increasing amounts of bandwidth to deliver these "Over the Top" services for which they generate no direct revenue.

The US market is arguably leading the way with Internet TV but business models are still evolving. Initially the broadcast networks looked to generate revenue direct from consumers by offering new shows on a paid-for basis. That model is now moving towards the same one they actually use in their broadcast business - universally available free content with revenue generated by advertising.

This season ABC, CBS, NBC and Fox are offering most of their new shows on their own sites but are also moving towards syndication through third party portals and the NBC/News Corp JV has also announced distribution deals with several portals. AOL is the first to announce content from all of them on their AOL Video portal. We believe it is important that consumers can access content from one aggregation point - not through separate sites.

The US is very different structurally to international markets due to the vertical integration where the networks source a substantial amount of their programming from their sister studios with greater rights flexibility. However to remain competitive we recommend that all free-to-air broadcasters move toward internet distribution on an ad-supported basis.

New technology will continue to make an impact on content distribution and open up new opportunities growing the overall revenue pie. Internet TV offers opportunities and threats for all players in the content value chain - the immense popularity of the internet combined with the speed to development on the web means you cannot ignore Internet TV - you must embrace it.