ZillionTV: yet another set-top box, or game changer?

New Internet TV provider ZillionTV launched today, offering yet another set-top box that brings internet television to the lounge room.

The tech specs are reasonable. On the plus side, ZillionTV will offer High quality streams, a Wii like remote for navigation, the ability to pay or opt-in to ads for content, and the ability to pick which type of ads you see. The rest of the specs are nothing we haven’t already seen from boxes like Roku, AppleTV and numerous others.

Most sites have been quick to write the ZillionTV off as yet another player in a market that continues to offer promise, but has never really taken off in a big way. But ZillionTV has a couple of advantage that could make it a game changer.

The strongest part of the offering is the content. Yes, many boxes already offer movies and television shows on demand, but the range of content providers has often been somewhat limited. ZillionTV is backed with content and investments from ABC/Disney, Fox, NBC/Universal, Sony and Warner Bros. The only content missing is CBS, but compared to other offerings out there, this offers a deeper range, and better choice between free and paid. Consumers don’t care for content deals and who owns what; what they care about is having access to their favorite shows, and ZillionTV looks like they may well offer a superior lineup.

The other factor that may make this a game changer is how it’s distributed. ZillionTV isn’t going to appear at your local computer or electronics store, and will instead be offered exclusively via partner ISP’s. Which ISP’s haven’t been disclosed as yet, but given the strong backing by media companies, it’s not unreasonable to expect that they’ll be distributed via large ISP’s. Some have suggested that this path may come up against network neutrality; this could happen if ISP’s decide to prioritize traffic to ZillionTV users, but there’s actually a better pitch: cap exemptions.

The box costs $50, and ISP’s get a cut from the ongoing revenue on each box. These same ISP’s are currently introducing capped internet access throughout the United States, and HD video gobbles up bandwidth. A likely outcome is that partner ISP’s will offer cap exemptions to ZillionTV traffic, so that although data traffic to the box may not get a speed priority, it will allow users to consume more without breaking their data caps. A not-dissimilar setup happens in Australia today; my ISP offers unlimited “free zone” data for content from iTunes and Australia’s ABC iView TV on demand service. This could well become a game changer as users hit cap limits; you can pay $50 to get a ZillionTV with data that doesn’t count towards your cap, or a Roku or AppleTV that does. If you like to watch TV on demand, which one would you pick?

ZillionTV launches in the 4th quarter in what will likely still be a difficult economic climate. It may fail as many have before, but the approach is different and it has strong potential.