AS many as 500,000 homes could sign up to have the internet deliver TV content to their lounge room sets by the end of next year, internet television sources say.
The claims follow the decision by Optus last week to appoint FetchTV as its internet protocol television provider and extend the service to Optus mobile phone and tablet devices.
Sources close to FetchTV say the company thinks the half-a-million mark is reachable.
The Optus deal puts back on track FetchTV's ambition to be the IPTV provider to every major internet service provider bar Telstra.
The company expects to be able this year to market its service to two million potential customers capable of receiving the service.
Telstra has about 150,000 T-boxes in the market, which include IPTV channels dedicated to its exclusive digital sports programming, such as AFL, rugby league, motor racing and horseracing.
Foxtel offers low-priced internet TV versions of its pay-TV product via Telstra's T-box and Microsoft's XBox 360, targeting customers who do not subscribe to its pay-TV services.
It is this market, comprising 60 to 65 per cent of Australian homes, that is now firmly in play.
Other contenders include Apple TV, Hybrid Television's TiVo and Sony's PlayStation Network, damaged by its recent worldwide privacy breach. But Foxtel, Telstra and FetchTV are expected to be the three main competitors.
FetchTV has also signed deals with Internode, iiNet and Adam Internet and is in talks with two others, believed to be TPG and Primus.
FetchTV chief executive Scott Lorson said the company was about to enter its launch phase proper with a marketing campaign to promote the brand, while each of its ISP partners would promote the product in direct marketing communications to their database of customers.
"(The Optus deal) was a seminal moment in terms of building our distribution capability," Mr Lorson said.
"We have been in a foundation and soft launch phase. The second half of this year will mark our true launch phase.
"Once the telcos choose to aggressively package an IPTV proposition (with other products such as mobile and broadband) then take-up is generally quite quick."
Media understands Optus is developing a suite of unique video content and services to be carried through its Digital Media division, led by Austin Bryan, which was set up for the purpose eight months ago.
They are thought to include social network connectivity, multi-screen applications that enable people to continue viewing as they move from one screen to another, and unique content related to key Optus media properties such as soccer and tennis.
The company has previously streamed to its customers' mobile phones -- including 400,000 live mobile streams during last year's FIFA World Cup -- and shows Nine's Today show live on Optus mobiles.
"You can imagine that we will have bespoke Optus services," Mr Bryan said.
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