The Venice Project, the latest venture of Skype founders Niklas Zennstrom and Janus Friis, has been going for a week now and we received an invitation to try it out.

The P2P site aims to deliver an internet TV service which is as near to TV as possible, while adding the sort of social features you would get on YouTube or other video sharing sites. The service is currently being tested by 6,000 people.

While you need to download a piece of software to your PC, it does at least avoid the need for long download times, as with Channel 4’s recently launched On Demand service.

After installing the software, you can then search for channels from a menu on the side of the screen. A control bar at the bottom allows you to search for programmes and pause, rewind or fast-forward whatever it is you’re watching.

Menus on the right of the screen allows you to access interactive tools, which allow users to share video playlists, chat with other users, and rate the content on offer.

Unlike YouTube or Google Video, all of the current content is ‘professionally’ produced and encrypted before being sent out – in this case a range of programming is available from the likes of MTV, CNN and Warner Bros.

The pictures are displayed in full screen, without the associated loss of picture quality that you would get with YouTube, and the streaming starts without much of a delay. The founders are not allowing too many screenshots to be shown at the moment due to copyright issues, but Sylvain Wallez has some.

The Venice Project is supported by advertising, as well as revenue deals with content owners, and is therefore free for users to watch. At the moment, you are shown a short advert, about 1-2 seconds long, when you select a clip. This may change, but at the moment it isn’t too intrusive.

So, the interface is simple to use, the quality of the video is excellent, the only problem is the content available to view, and this is what the success of the Venice Project depends on. Unless you want to watch old episodes of Lassie or the making of Paris Hilton’s album, there isn’t much content on offer so far.

Of course, this may change, and it is the deals that Zennstrom and Friis make with major content providers that will make or break the project. They have been talking to Channel 4 about making 4oD content available through the Venice Project. This, and other such deals may give their service the edge it needs.

Also, the Venice Project will be attractive to advertisers as, with user-defined tags and viewing histories, this will enable more accurate targeting of ad content.

As with any internet TV provider, the battle will be to get viewers to change their habits and watch online, rather than from the comfort of their sofas. For the moment, IPTV services which allow broadband TV to be shown via set top boxes, such as BT Vision, may be more appealing to traditional TV viewers. 

Even at this early stage, the Venice Project is impressive, and will be one to watch.