(FORTUNE Magazine) – THEY LAUGHED AT eBay. Who would want to bid on other people's junk? They laughed at blogs too. Who would want to read the mundane daily musings of complete strangers? They're laughing at podcasts, the do-it-yourself audio broadcasts that some people think of as the first true audio-on-demand service.

And they're practically busting a gut over Akimbo, a fledgling Internet-based video-download service that aspires to be the world's largest video-on-demand library. I mean, come on, who would pay for Let's Go Potty!--a musical instructional video--or for Chinese-language soap operas or "live action" videos of model trains going round and round for hours on end?

Come to think of it, I know a few stoners who would find Akimbo the most beguiling new toy since black lights and lava lamps. But really, who--sober--would pay $100 to $200 for the Akimbo set-top box and video recorder, plus $10 a month for the Akimbo video-on-demand subscription service, and sometimes extra fees of 50 cents to $10 for individual downloads, when the most compelling selections appear to be documentaries on billiards, grainy scenes from low-budget porno movies, and a couple's homemade video of themselves (fully clothed) debating whether Bo or Carrie would win this year's American Idol competition? Go ahead, laugh. I certainly did, especially when I saw that Akimbo's entire video-on-demand library consists of some 2,000 titles including movie trailers, industrial and educational films, old CNN newscasts, video blogs, and other--let's quote Akimbo's press release--"fascinating new programs" that "cannot find distribution through existing methods."

But somehow I suspect that Akimbo will have the last laugh. Although the service is bizarre right now, it has the potential to do for Internet TV what Apple's iTunes Music Store did for Internet music: create a vast repository of on-demand content that can be ordered with a click and delivered legally, swiftly, and relatively inexpensively to your TV over a broadband Internet pipe.

It's going to take a lot more than 2,000 obscure video selections to realize that ambition, though. To put Akimbo's plight in perspective, my local Blockbuster store carries 9,000 to 10,000 of the most popular DVD and VHS movie titles, and even then, more often than not there's nothing in stock that I'm really excited to see. If my local Blockbuster carried mainly Turkish-language talk shows, yoga videos, and vintage Larry King interviews with Leonardo DiCaprio and Snoop Dogg, I'd ... well, I'd subscribe to Netflix. In fact, I do. Netflix is another kind of video-on-demand service, except that it delivers physical discs by mail instead of digital bits by broadband. Before it reached critical mass, Netflix discovered a profitable niche renting Indian, Asian, and Spanish-language movie DVDs to people who couldn't find native-tongue movies at their local Blockbuster. Akimbo is on the same path, but now it faces competition from Netflix, Comcast, SBC, TiVo, Time Warner (FORTUNE's parent), and others that are also testing broadband video-on-demand to set-top boxes, though more cautiously than Akimbo.

Getting the major content providers to agree to sell their videos online is the major hurdle. But before Apple's iTunes came along, getting music companies to open their vaults to digital distribution was also seen as a major barrier. Turner Classic Movies and CNN (both subsidiaries of Time Warner) are among Akimbo's early content providers, but initially only for a handful of shows.

Akimbo acknowledges that building its library will take time, but contends its system eventually can offer a virtually infinite catalog of shows much more economically than cable video-on-demand.

Unfortunately, the Akimbo system in its current form deserves a spot on Fear Factor. The set-top box can store 200 hours of programming, but it is hobbled by standard-definition video outputs even as the world moves rapidly toward high-definition televisions. Even with fast broadband connections, the downloaded video occasionally suffers from jitters, stalls, or pixelation, and it often takes as long to download a clip as it does to watch it. The Microsoft digital-rights-management (DRM) software prevents the owner from transferring the show to another video player in the home. The remote has no backlight, and the controls are sluggish. The interface requires several layers of clicking to find out whether a video is free or not. Program descriptions are unhelpful, even in English.

Okay, so Akimbo deserves to be laughed at. But fast-forward a year or two, and see if broadband video-on-demand doesn't change the way we watch TV, just as the digital video recorder did.

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