What began two years ago as a low-budget cable TV operation to show infomercials and promote Canada’s largest daily newspaper has evolved to the point where Toronto Star Television (TSTV) is poised to become a leader in direct response ‘Webcasting.’

And while Webcasting technology currently leaves a lot to be desired, Don Shafer, vice-president and general manager of TSTV, is unshaken in his belief that programming over the Internet will soon take off.

‘I don’t think the technology is where it needs to be,’ he admits. ‘And I don’t think you are going to run out and start watching programming on your computer at home right away. But I’m a firm believer that if you build it, they will come.’

Launched late last year as a division of TSTV, torontostartv.com specializes in producing and hosting live events for professional Webcasting – both for its publishing parent, and for clients. Ultimately, Shafer believes the end product will be like DRTV, but instead of viewing it on a television, consumers will be watching the programming over the Internet.

‘We are extremely confident, and we’ve done a lot of research to determine what companies to work with, what compression schemes to use, what types of streaming to do with lower and higher bandwidth levels,’ he adds.

Supporting Shafer’s enthusiasm are increased signs of consumer acceptance of Webcasting. San Jose, Calif.-based high-tech research firm Dataquest expects the market for streaming video to grow to more than $1.4 billion worldwide in 2002. Nearly one in 10 organizations in the U.S. already use streamed video or audio on their Web sites, and Dataquest expects that number to grow to nearly one in three over the next two years.

Rob Glaser, CEO of Real Networks, a Seattle, Wash.-based company that develops real-time media software, frequently cites figures like 15.5 million users in North America tuning into 300,000 hours of new programming weekly.

TSTV plans to use torontostartv.com initially to promote its own product – its newspaper – by Webcasting news events, interviews with journalists, and promotional pieces. Shafer says he hopes TSTV’s direct response television clients, such as The Toronto Zoo and Look Communications, will also take to the new medium.

TSTV will distribute its information programming over the Internet via the Intervu Network, which specializes in the delivery of streaming media content. In order to view Webcasts, users will need an Internet connection of at least 28.8 kilobytes-per-second (Kbps), as well as software plug-ins such as Real Audio and Flash.

Rob Adams, TSTV operations manager, agrees that there are still bugs to be worked out with respect to video streaming and video compression.

‘We are basically building a Web site a year in advance,’ he says. ‘We are building a Web site today that a year from now will be the standard, and next year we will be building another site that will be the standard a year from then. We are definitely in a ‘keeping-ahead’ type of environment.’

Shafer says TSTV has done everything it can to understand the benefits and pitfalls of broadcasting video on the Internet.

‘Some of it is going to be extremely good and broadcast quality,’ he says. ‘Some of it is not going to be where we’d like it to be. But down the road, the distribution system is not going to be the issue. It will be what goes in it.’

TSC’s Starkman adds that bandwidth – or lack thereof – is the remaining hurdle.

‘Until we get high-speed access for everybody, it limits our potential and our opportunities,’ he says. ‘So much depends on the penetration of ‘at-home’ cable Internet services and high-speed access.’

Adams says TSTV is ‘at the edge’ of being the best-equipped remote-location Internet broadcaster. It has a full-level broadcast studio that rivals that of a conventional broadcast operation, with up to five cameras sending signals to TSTV’s control centre, allowing broadcast technicians to compress live on the fly and stream the content straight to Net.

When executives initially pondered broadcasting on the Internet, Shafer said they spent ‘about 30 seconds’ thinking it would be limited to promoting the newspaper.

‘Then we thought, ‘Why would we do that?’ There is no question that the video-on-demand applications have tremendous benefits to ourselves and to our other owned and operated companies, but also to some of our clients who want to have video storage parked seamlessly on the Internet so you can watch more about a particular company or client.’

One client that has placed infomercials on TSTV is The Toronto Zoo, but Toby Styles, the zoo’s executive director of marketing, isn’t sure whether his organization will take to the Web to broadcast its message.

‘Our infomercials were quite successful, and I know other companies are getting into Web broadcasting,’ he says. ‘It’s a wonderful resource, but right now we’re concerned with our own Web site.’