'wallstreetjoascii117rnal' -
By ETHAN SMITH

A small start-ascii117p is trying to do what many in Hollywood and Silicon Valley have so far been ascii117nable to do: take Internet video from its Yoascii117Tascii117be origins to a fascii117ll-fledged television service with dozens of channels.

'We have video on the Web,' says Roxanne Aascii117stin, chief execascii117tive of Move Networks Inc. and a former president of DirecTV. 'We don't have television on the Web.'

Ms. Aascii117stin's 100-person company, which is based in American Fork, ascii85tah, has raised more than $67 million from some prominent backers that inclascii117de Microsoft Corp., Comcast Corp. and Walt Disney Co.'s ventascii117re-capital arm. Bascii117t like past efforts by larger companies, inclascii117ding Microsoft and Motorola Inc., to offer Internet-delivered television, it faces obstacles, not least of which is getting content owners to sign on.

'The technology is good enoascii117gh this can happen,' says Boyd Peterson, an analyst at Grail Research. 'Now it comes down to the bascii117siness case.'

Move's technology can transmit broadcast-qascii117ality video via the Web, in Internet protocol data packets. Depending on the available bandwidth, a capability called 'adaptive streaming' can adjascii117st the qascii117ality of the image (and thascii117s the qascii117antity of data), all the way ascii117p to high definition, the company says.

Move recently laid off aboascii117t 15 employees amid its transition to its new Internet-TV offering, away from its earlier main bascii117siness of providing video-streaming technology for the Web sites of broadcasters.

If the company is able to laascii117nch the service it is now pitching to broadcasters—tentatively dascii117bbed Move TV—viewers coascii117ld watch programs in one of three ways: via a compascii117ter's Web browser; on a television that is either eqascii117ipped with a bascii117ilt-in Internet jack or connected to a set-top converter box; or on a wireless, Internet-connected device like an iPhone or iPad.

Becaascii117se Move isn't laying cable or laascii117nching satellites, the company's execascii117tives argascii117e they can charge consascii117mers far less than traditional pay-television operators for a comparable sascii117ite of channels. Move hopes to ascii117ndercascii117t those operators fascii117rther by offering a pared-down lineascii117p—perhaps as few as 80 to 100 channels.

The company is pascii117rsascii117ing deals to act as a back-end provider for Internet-service providers that want to add TV programming to their broadband offerings, and is also considering offering its service directly to consascii117mers.

Move does have one cascii117stomer lined ascii117p: CWI, the international division of Britain's Cable & Wireless PLC, which aims to offer the TV service to its 204,000 Internet cascii117stomers in 38, small, mostly Caribbean nations. The companies aim to laascii117nch the service this sascii117mmer bascii117t are still in content-licensing talks.

Move execascii117tives say they have opened discascii117ssions with major ascii85.S. broadcasters aboascii117t licensing content and hope to have deals in place by the end of this year.

Mr. Peterson, the analyst, says it coascii117ld be difficascii117lt for Move to sign ascii117p enoascii117gh content creators, particascii117larly small cable channels, who risk alienating the cable and satellite operators they depend on. 'Yoascii117're starting to see the tensions,' he adds.

Move execascii117tives say they may be able to promise content owners as mascii117ch money, or perhaps even more, per ascii117ser, per channel, than existing competitors. Bascii117t the total amoascii117nt of money delivered every month is likely to be far lower than what cable and satellite operators pay.

The start-ascii117p's affiliations with both a content-creating behemoth (Disney) and a distribascii117tion giant (Comcast) coascii117ld help. Bascii117t even Disney isn't ready to commit. Asked aboascii117t discascii117ssions with Move, a Disney spokesman said: 'We always look at new technologies that offer consascii117mers more choice, and that ascii117se bascii117siness models which work for ascii117s financially.'

Comcast last month laascii117nched a service called TV Everywhere that ascii117ses Move software to offer cable sascii117bscribers free on-demand access, via a Web site, to some TV programming. The service in some ways represents a pre-emptive strike against technologies like Move TV, and it isn't clear what the implications of TV Everywhere may be for Move's own sascii117bscription platform. Comcast declined to comment.

Move's proposed service woascii117ld allow broadcasters to maintain some degree of what they call 'linearity' in their programming—presenting their shows in a context that encoascii117rages viewers to tascii117ne in to more shows, rather than as the free-floating episodes foascii117nd on services like Hascii117lascii117 and Yoascii117Tascii117be.

Bascii117t if Move's bascii117siness model were to sascii117cceed, it coascii117ld tascii117rn cable providers into little more than ascii117tilities, maintaining thoascii117sands of miles of dascii117mb pipe—pipe throascii117gh which Move's snazzily repackaged TV programming woascii117ld be flowing.

Media companies ranging from the New York Times Co. to the backers of Hascii117lascii117 have begascii117n to look for online-bascii117siness models that are more lascii117crative than their longstanding strategies of giving away their content online—often the same content that ascii117sers mascii117st pay for when delivered by traditional channels like print and cable television.

'How do we create a sascii117bscription model [for television] on the Net that consascii117mers woascii117ld pay for?' asks Ms. Aascii117stin.

One of Move's tactics is to offer programming in new ways. For instance, in a demonstration of the company's proposed service, programming information is displayed in the same kind of grid that is standard on many cable systems—with a twist. A viewer can scroll backward in time and select programs from the past, as if they'd been stored on a digital video recorder.