Friis and Zennstrom, also founders of music download applications Kazaa, sold Skype to eBay for £1.3bn last year and are reported to have invested part of the proceeds to develop the service, according to a report in the Financial Times. It has been codenamed The Venice Project.
The project will show near-high-definition programmes, which will be supported by advertising revenue. Users can personalise channels or join forums to discuss content. The amount of advertising revenue available to the project will differ according to whether the content owner sells the ads or if its own sales team book them.
No partners have been announced as yet, however a source close to Warner Music confirmed it would use the service to create channels for some of its big-name acts. Friis said he hoped the service would provide an outlet for traditional broadcasters, national broadcasters and those that struggle to find an audience.
Friis and Zennstrom are keen not to label the service another YouTube, as they say the project promises conventional TV. Friis said: "The best of TV is about high-quality and full-screen video but it is also about channels."
The company will offer incentives to help get the project off the ground to attract users and advertisers, with the founders and Fredrik de Wahl, Venice Project chief executive, saying they can offer TV-sized audiences. Currently, the service is being tested by 6,000 people. However, Friis says it is possible to serve "tens of millions of users" once it is up and running. The service will also be capable of hosting pay-per-view channels.
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This article was first published on brandrepublic.com