Silvio Scaglia, the Italian internet entrepreneur who co-founded Fastnet, the Italian broadband group, is prepared to sink €350 million (£235 million) of his personal fortune into a new internet TV service that will soft-launch next month.

The platform, called Babelgum, will rival Joost, the peer-to-peer online TV service being developed by Niklas Zennström and Janus Friis, the billionaires behind Skype, the internet telephony group that was bought by eBay for a figure that could reach $4.1 billion (£2.1 billion) if targets are met. Messrs Friis and Zennström made an estimated $2.5 billion from the sale.

Mr Scaglia has already invested €10 million in Babelgum’s rival peer-to-peer technology, and has earmarked €220 million from the sale of a 6.3 per cent stake in Fastweb, where he is chairman, to support the start-up.

A further €130 million earned in dividends from Fastweb over the two latest financial years would be available for the project, he told Times Online today.

He envisages running costs for Babelgum of between €20 million and €50 million next year. The project is tentatively scheduled to break even by the end of the decade.

Babelgum will be marketed as "a lean-back proposition" Mr Scaglia said. The description is meant to differentiate the service from YouTube, the current champion of online video, which calls on users to hunch over their PCs, hunting for short, home-made clips.

By contrast BabelGum will offer full-length, "near TV quality" professional content – a model mirroring that of Joost, which has signed a slew of deals with content providers, most recently Viacom.

Babelgum, which is due to sign the lease on a London office tomorrow, which will be the marketing base, is planning to court Hollywood's major studios through Mr Scalia’s Fastnet connections. Back-office functions will be run from Dublin.

Reuters and AP have been signed up to provide news to the service.

However, Mr Scalia said the emphasis will be on content from independent producers, who are being invited to upload niche "long-tail" content onto the site.

Content providers will be guaranteed $5 per 1,000 views to start with "out of my pocket", he added. Advertising, targeted according to viewers’ watching habits, will be added in coming months.

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