Zattoo is a UM startup based in Ann Arbor and Zurich bringing TV to the Internet.
In two years, they've grown to over 2 million users in Europe by offering the equivalent of a basic cable TV package at no charge, funded by 5-second video ads show only on a channel switch. They offer popular TV channels in several European national markets. Zattoo is not yet available in the United States.
Photos of the Ann Arbor office: http://www.flickr.com/photos/dugsong/sets/72157601753144210/
UM trial for faculty, staff, and students who want to watch free TV online from any UM network: http://www.itcom.itd.umich.edu/iptv/