SANTA CLARA, Calif. — VUDU Inc. has unveiled a new video format for its broadband video-on-demand service called HDX, a proprietary video-encoding scheme targets high-end video systems by delivering 1080p video. The HDX format complement's VUDU's HD library as an optional format.

The VUDU Box essentially serves as an on-demand video server for consumers. By connecting to the consumer's broadband cable connection, VUDU downloads video content to the device's 250GB hard drive.

Like Apple TV, VUDU's has a breadth of content. VUDU has, according to the company's website, inked deals to deliver "more than 10,000 movies and TV titles from all Hollywood studios and leading independent distributors." Titles can be rented or downloaded permanently to the VUDU box.

VUDU's HDX format employs "TruFilm" technology. The company's formatting uses a series of processes, including one that attempts to remove digital artifacts commonly found in online video's dark or black areas. VUDU attempts to clean up otherwise substandard Internet video signals by using multiple technologies to deliver a Blu-ray-like cinematic visual. Efforts to retain the appearance of film grain, color balancing specifically for plasma and LCD screens and an amped up bitrate that dynamically changes based on the available bandwidth do deliver a high-definition image comparable to currently available DVD content.

The conversion of titles to the new HDX format is gradual. The company so far has released only 65 films in HDX and plans to offer all newly acquired titles in both standard HD and HDX as they are added to their library.

VUDU joins the nascent but burgeoning field of Internet protocol television, or IPTV. Similar to Internet telephone services like Skype or Vonage, IPTV uses the growing availability of broadband connections to offer services through the same connections normally used only for data.

Consumer adoption of Internet television has been slow. Previous and current attempts at delivering true video-on-demand have either stalled or have been scaled back by the providers. Time Warner, Cox and Comcast all offer variations of an on-demand service in select markets. None have been able to successfully compete against DVDs nearly universal adoption.

The market is changing. Forrester Research claims that By 2011, TV programming delivered over consumer broadband connections will be a "viable alternative to cable," according to a report released in 2007 by Forrester Research.

The market as of today, however, is limited. According to Leichtman Research Group, slightly more than 40 percent of the U.S. market has a high speed connection to the Internet, a fact that effectively blocks approximately 60 percent of the marketplace from using the new technology.

Even if the prediction by Forrester holds true, the market penetration for IPTV is seen as comprising only "around 5 percent," according to the report.

Forrester observes that IPTV "has the potential to completely shift the way the TV industry works," it says, "connecting consumers and their pocketbooks directly to content providers while disintermediating traditional cable and satellite operators."

This direct-to-wallet relationship has implications for the adult industry. Currently, VUDU has adult content provided by only one supplier. Viewing statistics are not available from VUDU for the adult content.

VUDU is available from mainstream retailers as well as directly from the company's website. The VUDU BX100 retails for $299 and does include a $200 credit towards movie purchases or rentals. The larger capacity VUDU VBX1000 retails at $999.

Rentals of films or content are good for seven days and range from 99 cents to $3.99. Purchasing films to own are $4.99 to $19.99. Television episodes begin at $1.99. There is no monthly fee or subscription charge.