ZillionTV enables viewers to earn from watching TV ads

After Saratoga-based manufacturer of the trademark $100 set-top box that connects the internet to televisions,  Roku, announced it was adding Amazon's Video on Demand to a box (See: Roku ties up with Amazon for more streaming video), another Silicon Valley company has unveiled its own device to harness the power of the internet to take video-on-demand to enable viewers to chose what they want to watch  on their TV... and earn from it!

ZillionTV, backed by major Hollywood studios as well as credit-card major Visa, is introducing an ad-supported VOD system in which commercials are tailored to viewers, who can't fast-forward through them, but can actually earn for watching those commercials.

ZillionTV enables viewers to choose the categories of advertising that are most interesting to them, and commercials fitting the bill are inserted into TV shows and movies that are streamed via broadband onto TV screens.

This is how it works: consumers have to conect ZillionTV's set-top box into their television sets the way way they would connect a DVD player. When they turn on the TV the ZillionTV interface comes up, which asks the viewer to select the type of TV, movie and music and their preferred types of advertising they want to watch. After that done, consumers can directly start watching content, which is streamed directly to their television.

Content comes from Warner Bros., Sony Pictures, NBC Universal, 20th Century Fox Television and Disney, all of which are equity stakeholders in the new company. Forty other partners also supply content, and discussions are under way with Viacom and CBS.

ZillionTV operates through a device it calls ZBar that it supplies for free. Users must, however, pay a one-time activation fee of up to $100, said chief executive officer Mitch Berman.

The system's technology was created by Peter Redford, known for helping to develop the computer mouse and the Macromedia Flash player.

ZillionTV won't launch to consumers until the fourth quarter, when such TV shows as 30 Rock and Smallville and movies like The Dark Knight will be available on demand. By the yearend, ZillionTV will have rights to 15,000 titles, Berman said.

Users maneuver through the ZillionTV interface with a motion-sensing remote similar to a Nintendo Wii controller. "The whole screen on your TV becomes interactive," Berman said.

The remote has a 'buy now button so that advertised items can be purchased on the spot through a virtual store operated by Visa, the credit card company that also is a ZillionTV stakeholder. The system also features a rewards programme: The more commercials one watches, the more points one earns.

"It's a radically different model," Berman said. "You're rewarded for watching TV." He added that the model includes a revenue sharing among ZillionTV, the content providers, advertisers and even the participating Internet Service Providers.

Users who wish to avoid the ads can buy or rent content in a fashion akin to iTunes and Apple TV. ZillionTV, though, is for streaming only, so purchased content is stored via internet 'lockers', not on a hard drive in the ZBar.

"We're living in a tornado," Berman said. "You can't pick up a newspaper without reading how popular internet video is. We bring it to TV."

Others - most notably TiVo - do likewise, but analysts say there is definitely a market for another service. However, it may be a marketing challenge to get consumers to put yet another box in their living room.

Indian watchers have to be patient till ISP suppliers improve their broadband speeds for retail customers - viewers need at least a 3 megabits per second internet speeds!