  Internet technology should eventually provide important improvements over
established media not only in the efficiency of broadband delivery, and of
particularimportance, in the efficiency of business models that can be used to
collect money for that programming. I identify five economic characteristics of
Internet technology that should lead to these greater efficiencies: (1) lower
delivery costs and reduced capacity constraints, (2) more efficient
interactivity, (3) more efficient advertising and sponsorship, (4) more
efficient direct pricing and bundling, and (5) lower costs of copying and
sharing.
  The most successful Internet TV business models are likely to involve
syndication to or from other media, and also international distribution. In the
broader context, Internet TV is another syndication outlet by which program
suppliers can segment their overall markets and thus support higher production
investments. Many innovative and more sharply focused programs will surely
prosper on Internet TV, but the attractiveness to audiences of high production
value programming will tend to advantage broad appeal programming, such as
Hollywood movies. Historical evidence about the performance of cable television
and videocassettes is presented to support these points.
