Skype cofounders Niklas Zennström and Janus Friis want to turn the Internet into a global television distribution platform, where users switch between shows almost as quickly as they can change the channel on a standard TV. The system, called Joost, is currently in beta testing and could be released to the public in a matter of months. But it’s hard to understand how Joost will fit into a streaming multimedia world populated by the likes of YouTube, Netflix, and even your local cable company.

“We’re taking the next logical step in television,” says Joost chief technology officer Dirk-Willem van Gulik. Joost, he says, combines the best parts of the television experience with the best parts of the Internet. It’s more than a fancy way to transfer files. The zippy, full-screen broadcasts and the browser allow users to change channels, search content, and receive recommendation lists. Eventually, the Joost browser will even allow software developers to create their own plug-ins. The service is free, and it’s supported by one minute of targeted advertisements per hour.

Internet protocol television–IPTV–has been on the minds of developers since the early days of the Web. Last March, CBS’s webcast of the NCAA final-four tournament drew a record 250,000 simultaneous viewers. But 140,000 people were left in a digital waiting room, says Hui Zhang, a computer scientist at Carnegie Mellon University.

That’s where Joost’s hybrid peer-to-peer model comes in. Zennström and Friis popularized Voice-Over-IP with Skype and dove into music sharing with Kazaa. With Joost, content initially comes from central servers currently located in Luxembourg, but as more and more users request the same content, the system shifts to peer-to-peer file transfers, which increases efficiency as more users log on. Unlike BitTorrent, which requires lengthy downloads, Joost is built for instant gratification. Anywhere in the world, it takes less than five seconds to change the channel.

“We’ve tuned the peer-to-peer system to do video incredibly efficiently–very near real time,” says van Gulik. The company spends up to 10 hours compressing a single hour of video using the H.264 compression scheme.

“We all knew the technology was coming,” says Ben Zhao, a computer scientist at the University of California, Santa Barbara. “It’s been bouncing around academic research for five to six years now, if not longer. What has been missing are the pragmatic pieces that transition it from chunky hard-to-use research code to a smooth user experience.” Van Gulik says that almost 90 percent of the code for Joost comes from open source, but it’s the final 10 percent that makes the difference.

“If you go back in time to when Skype was introduced,” says van Gulik, “lots of vendors were making voice over IP products, but there was something missing … All Skype did was package that existing technology and make it simple to use.” The same is true for Joost. “We’re not doing all that many special things, but we’re making it tremendously easy to use.”

Joost will compete with video services ranging from YouTube to Netflix’s newly announced download service, and even with traditional cable companies like Time-Warner. The cable company has been experimenting with its own IPTV solution in San Diego and has rolled out a suite of interactive features and video on demand to cable subscribers around the country, says spokesperson Justin Venech.

Joost also faces a number of practical and technical challenges. “The popularization of P2P content sharing via Gnutella/Kazaa has already been extremely expensive for ISPs, and the advent of Joost can take bandwidth utilization … to another level entirely,” says Zhao. Still, he thinks that cable and broadband companies have a chance to profit off increased upstream traffic by forcing users to upgrade their services.

The service must also prove to content providers that Joost really is a “piracy-proof Internet platform,” a claim made in one of the company’s press releases. Unlike with typical peer-to-peer services, users will not be able to upload their own content to the network, but they will be helping transfer encrypted content that Joost supplies through the company’s central servers. The concern is that some users might somehow be able to hack the Joost network and use it to send unapproved files, or somehow store approved content on their personal computer. With the Joost system, users can watch content on demand, but they aren’t allowed to store it on their hard drives. Since Joost is currently free, there may be little interest in circumventing these measures.

For now, the future of Joost hinges on what kind of content it is able to license and support with its advertising-based model. So far, it has already teamed up with National Geographic, IndieFlix, Indy Racing League, Gamestar, North One, September Films, and Endemol. However, van Gulik says, “we’re not trying to solve just the content problem. Or the advertising problem. Or the revenue problem. We’re basically going for all of those things at the same time.”