In a wide-ranging interview with Digital Spy, CNN.com senior vice president and general manager David Payne discussed the creation of the international news network's new Pipeline video service, the future of CNN.com, and CNN's approach to the UK market.

This is part one of a three-part interview; parts two and three will follow over the weekend.

Nine weeks ago, CNN rolled out a brand new broadband video service, Pipeline. The service, available in 25 countries, combines a free video-on-demand component with a subscription-based live streaming model, with four streams ("pipes") of news video being offered. We asked Payne how the service had come about.

"We underwent a review of our online video strategy about two years ago," he explained. "At the time we had moved our video assets behind a pay wall where the only people who would get access to it were people who directly subscribed to us for $4.95 a month, or if you were a RoadRunner, Real or AOL user. We had something like 8-10 million people who had access and financially that was very good for us.

"During that time period a couple of interesting things were happening: video was becoming more prevalent online, and broadband penetration was increasing both at home and becoming pretty much ubiquitous at work. People were getting more comfortable with the video experience online versus just reading things online. The last event that also made the confluence of these events interesting was that advertisers were starting to move online and were looking for ways to use their video creative that they'd spent millions of dollars on for television and also use that on the web.

"So, we looked at all of those things and made a strategic decision to do two things. One, create a mass reach free video product, which we did on CNN.com when relaunching our video assets and our new player, which is really one of the best of breed video players - a 16x9 aspect ratio, very elegant search and sort features, and the browse functionality that we spent a lot of time working on. But, we also wanted to present our live breaking news. And we looked at that strategy and we looked at the streaming costs that are associated with serving live breaking news - we couldn't make the economics work on giving everything away for free, on building the product we wanted to. Also in terms of the user experience, if we had a high concurrent news event, say, tens of millions of people coming to your site, expecting you streaming, you actually can't service that.

"Where the strategy went was that it developed into a two-pronged approach in which we'll still get the advertising revenue that we need for VOD products and we'll create a good user experience there, and then we'll create a separate product that we can charge a small amount of money for in the digital iTunes pricing model.

"So that's where we are, and we're six months into the free video -- that got out the door first because it's easier to do -- and we're nine weeks into this product, and we're very bullish about both of them."

When asked how takeup of the service had been since launch, Payne did not give specific numbers but emphasised that he is "pleased" with how things are going.

"You can always sell more, is kind of how I think of it. I'm extremely pleased with the key features of what's going on," he said. "The users that have it, love it. It's addictive, it's sticky, and you can leave it in mini-mode and watch along - it has drama, but it also has the choice elements. It's been extremely well received by anyone who's looked at it or written about it or talked about it and the users love it. The functionality works. So, I'm extremely pleased on that.

"We're in the acquisition mode - our challenge as a business is to get it out in front of as many people as we can and get the software downloaded. We're only nine weeks in, so I have to learn to be patient!"

On Tuesday, the network provided Pipeline free to all users to showcase the product's coverage of Mardi Gras in New Orleans. Payne called the day "a great success," adding that "90% of the comments from people emailing or hitting "your voice" [in the Pipeline player] were overwhelmingly positive so now we'll probably be doing more of those types of promotions."

Payne also revealed that CNN is exploring other ways to get Pipeline to consumers outside offering a download link on CNN.com.

"We're working on deals to bundle these assets together with other people selling both digital products and offline subscriptions. We're talking to the portals about bundling into their service and so forth. So we'll get some traction somewhere, that I'm certain of because anybody who sees it goes... "I gotta have that."

"It's Internet 2.0."

Part two of our interview with David Payne will appear on Saturday afternoon.