TV over the Internet comes in many forms. The standalone box variety, such as Slingbox, acts as a broadband converter, hooking up directly to TVs without a computer. Then there's the paid software kind, which means paying for a software suite that gathers video content from around the world. This article assumes the need for free TV through the Internet--no hardware beyond a normal PC, and no paid software.
However, it's worth noting the system requirements for all of these are the same.
The first thing to take care of is the so-called pipeline, or the Internet connection. This is the most vital, because in terms of hardware and processing power, the requirements are quite tame and haven't changed much since the late 1990s. The main concern is data transfer--the faster the connection the better. This means actual speeds and latency, not what an Internet service provider declares. Most bona fide providers of online video simply require high-speed Internet or broadband, which is vague.
In real terms and based on experience, connections must be capable of at least 1Mbps consistently to make watching video online pleasant. Any lower and buffering occurs frequently, ruining the experience. For downloadable content, rather than streamed video, slow connections mean it takes forever to get files. Connections able to sustain 5Mbps or more are highly recommended. Pings of less than 25ms are best.
Depending on the quality of the source, PCs must be at least Pentium 3, or around 500MHz in processing speed. Anything over 1GHz is ideal, and multi-core processors are highly advisable because one of the biggest killers of online video are programs working in the background.
Make sure the computer used has at least 512MB of RAM and 128MB of video RAM. Some recommend lower specs, but they're understating. For HD content (1280 x 720 or higher), at least 1GB of RAM and 256MB of video RAM are recommended.
The screen should be able to display at a minimum of 1024 x 768, but that's a given for most users.
Avoid paid products offering thousands of TV channels online. These simply consolidate free content you can obtain without paying, and often don't work--channels come and go, encoding changes and the search engine may fail. Also, there's no longer any need to get a special TV tuner card. Internet TV means online--so the same equipment needed for regular usage applies. Don't fall for buying anything extra.
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