Last evening, I was chatting with Michael Arrington, who was amazed by the number of people who were tuning into TechCrunch50’s video livestream. In the past we have had similar experience as well when we live streamed our conferences, NewTeeVee Live and Structure 08. This got me thinking about if live-streaming of events — conferences, conventions and sports events — was actually something traditional media companies could use as a way to fight the DVR and at the same time maintain a relationship with their viewers.

Call it a happy coincidence, but this morning Matteo Berlucchi, CEO of Livestation emailed to let me know that his company had added Deutsche Welle as a customer to offer live TV over the Internet. It is now a channel choice alongside eight others including BBC World, EuroNews and Bloomberg. The London-based P2P TV startup that was spun out of Microsoft Research is also live streaming the Large Hadron Collider experiment from CERN. (UPDATE: According to Berlucchi’s blog, once the collider footage went up, people were accessing it at a rate of 2 downloads per second.)

What follows is an email exchange with Berlucchi:

NewTeeVee: What is the business model for Livestation?

Matteo Berlucchi: Ad-funded and premium pay-per-view when we reach critical mass. Ads will run between channel changes and in the overlays. Everything is done in partnership with our partner channels (read rev-share).

NewTeeVee: Who do you view as your competitors? What makes you better?

Berlucchi: In a narrow sense, our competitors are aggregators of live content. Currently on Zattoo. Main difference is that we offer a global service based on international channels (news & others coming) and user-added channels (video, radio, webcams). These user-added channels — almost 900 in less than four weeks — are any stream a user wants to store on the system (like a bookmarking service for streaming) and then share with the user base — like delicious. A kind of social bookmarking for live streaming and official, high-quality partner channels.

In a broader sense, we compete for people’s attention in the online video space. But what’s distinctive is the mindset a user has when they seek on-demand vs. live content.

NewTeeVee: Who are your customers? The end consumers or media companies?

Berlucchi: Our customers are end users. Media companies are partners. Our model is: It’s a confusing and early market, we have a great platform, you have great content. Let’s get out there hand-in-hand and let’s see what happens.

NewTeeVee: Why do you think live-streaming is important market?

Berlucchi: Well. You will surely want to time shift your entertainment, but what about sports, news, live events (like the Large Hadron Collider today)? The market is probably going to split down in two: live and on-demand. I like to think of them as brother and sister, same family but that’s about it.

NewTeeVee: It seems to be a tough business that requires a lot of infrastructure investment, and the competition is fierce. There are CDNs and others who want to offer similar services. Can you keep them at bay?

Berlucchi: Better. We can work with them. Our “secret sauce” is our P2P technology (originally developed by Microsoft Research) which — in layman terms — extends the reach and capacity of the existing CDN infrastructure. In other words, you get more viewers for less, but the “more” is also the ability to actually serve more users than what the CDN can take. It’s a double win: more capacity and less cost (btw, our system also implements a QoS approach for improved reliability).

Also, these guys (CDNs, Move, etc) are tech/service suppliers to broadcasters. We aggregate, which puts us in a different place.

NewTeeVee: If I understand this correctly, your competitors in the U.S. (Ustream, etc.) have a higher mindshare, whereas you guys have less of a mind share. Does that bother you? How do you fix that?

Berlucchi: Well, we are still in beta, but according to Alexa we’ve already overtaken Joost. We are also the top non-Apple download on Apple.com since we released the Mac version two weeks ago. Ustream offers a different service — they allow people to put up a webcast quickly and cheaply — while we partner with the largest networks and are developing something quite different from everything else out there. We are trying to develop the evolution of the traditional TV experience (channels, etc.) in a global and interactive context (chat, buzz, recommendations, etc.).

NewTeeVee: Any other thoughts?

Berlucchi: We are young and just getting into this market, but the signs are that the user base is looking for something like this, an application on their computers (or iPhones) that allows them to aggregate and sort all of their favorite streams. We use a browser to surf the web, an IM to chat with our friends, Skype to speak to them…Why not Livestation to watch/listen to what’s happening around the world?