For several centuries, cultural exports flowed largely in one direction: out of Europe to the colonies and the rest of the world. Then, after World War I, the young medium of film reversed the flow. Audiences around the world flocked to Hollywood movies and European cultural elites, shocked at their loss of control, advocated protection. But despite seven decades of effort, this challenge remains: in 2002, of the 50 highest grossing films worldwide, all were American.

The arrival of broadcast television helped for a while to maintain national cultural policies, because this medium, in contrast to film, could be controlled through monopoly public institutions. But the system broke down in the 1980s, and the newly private airwaves and cableways soon filled with even more Hollywood content. Of course, there was also more domestic production of TV programmes in each country, and some programme ideas travelled in the opposite direction. But on the whole, commercial TV has been much more American-style in content than public TV.

Now television over the internet is knocking. But what will enter when the door is opened?

Knee-jerk responses to this question have been characterised by defensiveness and denial. The internet community, staunchly internationalist and multicultural by outlook and background, does not want to face the possibility that it might contribute to the further ascendancy of American mass culture.

For electronic media, transmission technology is destiny: it defines cost, content and business models. The costs of TV distribution over the internet are more than 40 times greater than the distribution cost of a cable TV channel. This is because the individualisation of the internet requires significantly larger transmission resources than simultaneous broadcast-style transmission. Hence internet TV can function economically only as a premium medium.

Given these economies, several types of application seem therefore most likely:

1. Video on demand (VOD) delivery of films, at the very top of the distribution chain, right after movie theatre distribution and maybe even ahead.

2.Thin and specialised audiences that would not be served by synchronous TV

3.Office viewing

4. Interactive and multimedia applications that use the medium in ways that cannot be done over regular, one-way TV.

From the numbers it is quite clear that one would not want to use internet TV for regular video content distribution. For that purpose, cable TV and its digital fibre variants will be much cheaper. Internet TV's market is for applications that go beyond regular TV: interactivity, asynchronicity, linkages, multimedia.

The interactivity and multimedia aspect of the medium require additional features beyond straight video. It might be a bit like the video game Super Mario Brothers combined with the sitcom Friends and the reality show Survivor.

To produce such content is expensive. It will also require creativity, lots of programmers, significant performance testing, and continuously updated versions. Such content exhibits strong economies of scale. They favour providers that can come up with big budgets, diversify risk, distribute over other platforms, create tie-ins and establish user communities.

This creates advantages for US companies. The US has a large internet community with entrepreneurial energy; big content producing companies with worldwide distribution and experience in reaching popular audiences; creative and technological talent from around the world; efficient production clusters; and strong computer and software industries. It also benefits from the advantages of the English language, the cultural prowess of being the world's superpower, pro-competition policies, and a financial system that provides risk capital. Some of these factors are also available elsewhere, but nowhere in such combination.

Furthermore, the emerging distance-insensitivity of transmission cost means that such content can be distributed worldwide; distance ceases to be a protection. And therefore, Internet TV will be strongly American. Participants from other countries will also be players, but most likely either domestically, without much reach, or as global players that will offer American-style content to the world.

There will be cultural losers. These losers will not sit still but invoke various public policy concerns, and this will inevitably lead to protectionist regulation. We should therefore be ready for cultural and trade wars over the TV of the future.

The writer is professor of economics and finance at Columbia University and director of its Columbia Institute for Tele-Information