Posts for 'ABC'

Yesterday's announcement by Netflix that it will be adding to its Watch Instantly library past seasons ABC's "Lost," "Desperate Housewives," "Grey's Anatomy" and "Legend of the Seeker" is another step forward for Netflix in strengthening its online competitiveness.

At a broader level though, I think it's also further evidence that the near-term success of Watch Instantly and other "over-the-top" broadband video services is going to be tied largely to deals with broadcast TV networks, rather than film studios, cable TV networks or independently-produced video sources.

Key fault lines are beginning to develop in how premium programming will be distributed in the broadband era. Content providers who have traditionally been paid by consumers or distributors in one way or another are redoubling their determination to preserve these models. Examples abound: the TV Everywhere initiative Comcast/Time Warner are espousing that now has 20+ other networks involved; Epix, the new premium movie service backed by Viacom, Lionsgate and MGM; new distribution deals by the premium online service ESPN360.com, bringing its reach to 41 million homes; MLB's MLB.TV and At Bat subscription offerings; and Disney's planned subscription services. As I wrote last week in "Subscription Overload is On the Horizon," I expect these trends will only accelerate (though whether they'll succeed is another question).

On the other hand, broadcast TV networks, who have traditionally relied on advertising, continue mainly to do so in the broadband world, whether through aggregators like Hulu, or through their own web sites. However, ABC's deal with Netflix, coming on top of its prior deals with CBS and NBC, shows that broadcast networks are both motivated and flexible to mine new opportunites with those willing to pay.

That's a good thing, because as Netflix tries to build out its Watch Instantly library beyond the current 12,000 titles, it is bumping up against two powerful forces. First, in the film business, well-defined "windows" significantly curtail distribution of new films to outlets trying to elbow their way in. And second, in the cable business, well-entrenched business relationships exist that disincent cable networks from offering programs outside the traditional linear channel affiliate model to new players like Netflix. These disincentives are poised to strengthen with the advent of TV Everywhere.

In this context, broadcast networks represent Netflix's best opportunity to grow and differentiate Watch Instantly. Last November in "Netflix Should be Aggressively Pursuing Broadcast Networks for Watch Instantly Service," I outlined all the reasons why. The ABC deal announced yesterday gives Netflix a library of past seasons' episodes, which is great. But it doesn't address where Netflix could create the most value for itself: as commercial-free subscription option for next-day (or even "next-hour") viewing of all prime-time broadcast programs. That is the end-state Netflix should be striving for.

I'm not suggesting for a moment that this will be easy to accomplish. But if it could, Netflix would really enhance the competitiveness of Watch Instantly and its underlying subscription services. It would obviate the need for Netflix subscribers to record broadcast programs, making their lives simpler and freeing up room on their DVRs. It would be jab at both traditional VOD services and new "network DVR" service from Cablevision. It would also be a strong competitor to sites like Hulu, where comparable broadcast programs are available, but only with commercial interruptions. And Hulu still has limited options for viewing on TVs, whereas Netflix's Watch Instantly options for viewing on TVs includes Roku, Xbox, Blu-ray players, etc. Last but not least, it would also be a powerful marketing hook for Netflix to use to bulk up its underlying subscription base that it intends to transition to online-only in the future.

Beyond next-day or next-hour availability, Netflix could also offer things like higher-quality full HD delivery or download options for offline consumption. Broadcasters, who continue to be pinched on the ad side, should be plenty open to all of the above, assuming Netflix is willing to pay.

I continue to believe Netflix is one of the strongest positions to create a compelling over-the-top service offering. But with numerous barriers in its way to gain online distribution rights to films and cable programs, broadcast networks remain its key source of premium content. So keep an eye for more deals like the one announced with ABC yesterday, hopefully including fast availability of current, in-season episodes.

What do you think? Post a comment now.

I'm back in the saddle after an amazing 10 day trip to Israel with my family. On the assumption that I wasn't the only one who's been out of the office around the recent July 4th holiday, I've collected a batch of industry news links below so you can quickly get caught up (caveat, I'm sure I've missed some). Daily publication of VideoNuze begins again today.

Hulu plans September bow in U.K.

Rise of Web Video, Beyond 2-Minute Clips

Update on New Channels

ABC Content Now on Hulu

Nielsen Online: Kids Flocking to the Web

Amid Upfronts, Brands Experiment Online

Clippz Launches Mobile Channel for White House Videos

Prepare Yourself for iPod Video

Study: Web Video "Protail" As Entertaining As TV

In-Stat: 15% of Video Downloads are Legal

Kazaa still kicking, bringing HD video to the Pre?

Office Depot's Circuitous Route: Takes "Circular" Online, Launches "Specials" on Hulu

Upload Videos From Your iPhone to Facebook Right Now with VideoUp

Some Claims in YouTube lawsuit dismissed

Concurrent, Clearleap Team on VOD, Advanced Ads

Generating CG Video Submissions

MJ Funeral Drives Live Video Views Online

Qik Raises $5.5 Million

Why Hulu Succeeded as Other Video Sites Failed

YouTube's Pitch to Hollywood

Invodo Secures Series B Funding

Comcast, USOC Eye Dedicated Olympic Service in 2010

Consumer Groups Push FTC For Broader Broadband Oversight

Crackle to Roll Out "Peacock" Promotion

Earlier Tests Hot Trend with "Kideos" Launch

Mobile entertainment seeking players, payment

Netflix Streams Into Sony Bravia HDTVs

Akamai Announces First Quarter 2009 State of the Internet Report

Starz to Join Comcast's On-Demand Online Test

For ManiaTV, a Second Attempt to be the Next Viacom

Feeling Tweety in "Web Side Story"

Most Online Videos Found Via Blogs, Industry Report

Cox to Turn "MyPrimeTime" Dial to 100

How to Start a Company (and Kiss Like Angelina)

Move Networks, the well-funded Internet television technology company which has been virtually silent for the last 60 days since acquiring Inuk Networks and bumping former CEO John Edwards to Executive Chairman, is pursuing a major repositioning. Earlier this week I met with Marcus Liassides, Inuk's former CEO and founder who joined Move's management team, who previewed the company's new strategy to be a wholesale provider of IPTV video services delivered over open broadband networks.

Broadband video industry participants know Move best for its proprietary adaptive bit rate (ABR) technology and player, which power super-high quality live and on-demand video streams for broadcasters like ABC and Fox. Move gained a lot of attention by raising over $67M, including a $46M Series C round in April '08 from blue chip investors.

Despite all this, Marcus explained that coming into 2009 Move had at least 3 significant problems, symbolic of how fluid the broadband video market remains.

First, its core business of charging content providers in the range of $.30/GB of video delivered was being pressured by the fact that advertising-only business models couldn't support this pricing. Content providers loved Move's quality; they just couldn't afford it, particularly given the alternative of plunging CDN delivery rates.

Second, Move's pricing and business model were being challenged by both Microsoft and Adobe entering the market with ABR streaming features of their own (I wrote about this here). But because both were enabled on the server side (IIS and FMS respectively), the cost of ABR moved from content providers to CDNs, who might or might not choose to charge extra for these features. Either way, Move's direct cost looked comparatively more expensive, especially as the recession pounded ad spending.

Last, but not least, Marcus explained that Move's product development approach was undisciplined, leading to resources being spread too thin in too many directions. That was reflected by the market's ongoing difficulty in categorizing which business Move was really in.

Meanwhile, U.K.-based Inuk, which had been on its own funding and product development roller-coaster, was delivering its Freewire IPTV service to about 200K university students in the UK, Ireland and Canada. Because Inuk needed to serve these students when they were off campus, it had developed a "virtual set-top box" application that duplicates on the PC the IPTV service that had traditionally been delivered via an expensive IPTV set-top box. Inuk was using Move's ABR technology to power video delivery to the PC. Recognizing potential synergies and trying to address its other issues, Move acquired Inuk in April.

Move's new positioning as a provider of IPTV video services delivered over open broadband networks essentially replicates what Inuk has been doing, except that going forward services will be offered wholesale, not retail like with Freewire. Move's strategy starts from the proposition that to get cable TV networks online requires that they be paid consistent with the norms, rather than expecting them to free and ad-supported only. It also anticipates that consumers demand not just VOD offerings, but a full linear lineup as well (as an aside, that aligns with Sezmi's thinking too). While Move will continue supporting existing customers like ABC and others, its new wholesale model is a major shift in that it uses the company's core technology to support packaged multichannel video services, instead of a la carte web-based video.

Marcus explained that Move is targeting 3 verticals: (1) telcos which haven't traditionally offered video services (or have through direct satellite partnerships), (2) broadband ISPs looking to get into the video business, and (3) existing video service providers looking for a lightweight capex approach for extending their service either for remote access (a la "TV Everywhere") or in other rooms in the house (a model which has traditionally required another set-top box and truck roll for installation).

Marcus demo'd the Freewire service to me using his PC and a large monitor, and it looks great. There's instant channel changing, HD (when available), a great looking guide and auto-DVR of every program, all in the cloud. Freewire also offers targeted advertising, and HTML-based apps like Twitter integration, etc. My caveat is that I have no idea how well the service would scale to millions of homes.

Move's new positioning puts it in the middle of tectonic video industry shifts. For example, what's the appetite of 3rd parties like telcos and ISPs for new video solutions? Will other, well-suited consumer brands like Google, Netflix, Yahoo enter the multichannel video business, and if so how? What approach will cable operators like Comcast use for emerging, "TV Everywhere" services that would benefit from Move's lightweight capex model (note Comcast said it was using Move in its 5,000 subscriber technical trial yesterday)? How will major cable TV networks expect to get compensated in the broadband era where individuals, not homes, are the new unit of measurement? How will local ISPs, over whose networks remotely-accessed video will run, expect to be compensated? It's way too early to know the answers, but if Move's technology works as intended, and its costs are reasonable, it will likely find itself in the middle of a lot of very strategic industry discussions.

Another big change is that Marcus said the company's messaging will be focused more around business cases and services than its specific technologies. That seems smart given giants like Microsoft and Adobe are closely circling these waters with lots of their own technology, which could easily swamp Move. If all this wasn't enough, Move is also in the midst of hiring a new CEO and implementing a new management team, all of which will be announced imminently. One thing Move isn't doing for now is raising additional capital, which Marcus said is not needed.

What do you think? Post a comment now.

(Note: Move Networks is a current sponsor of VideoNuze)

OK, Hulu now has ABC in its corner for the next 2 years, along with a re-upped program exclusivity commitment from NBC and Fox. But the nagging question remains: even with all its premium content, fabulous user experience and surging traffic, when will Hulu prove its business model? How that question gets answered will be the real test of Hulu's ultimate success. And with 3 of the 4 broadcast networks now hitching themselves to the Hulu locomotive, the answer is also going to be pivotal to how the industry navigates the broadband video era.

To be clear, VideoNuze readers know that I've been a big fan of Hulu from Day 1. The site has only gotten better over time, not only with more content added, but by continued improvements in the user experience. All of this has no doubt contributed to Hulu's rapid rise up the usage rankings, landing it in the top 3 for the first time in March, with 380M views, according to comScore.

A source familiar with the Disney deal told me the deal was entirely predicated on Disney's desire to tap into Hulu's audience in order to increase ABC's online reach. Among other evidence indicating Hulu's upside potential, comScore data apparently showed that only 8% of the ABC.com audience visits Hulu and only 13% of the Hulu audience visits ABC.com.

To me, three indicators of how much the Hulu deal meant to ABC are the 2 year exclusivity commitment, the redistribution rights for ABC programs to 3rd parties Hulu gained (except for grandfathered ABC partners), and that ABC will allow its programs to be viewed outside of its much-celebrated video player for the first time.

Importantly, the former two terms effectively foreclose any full-length program distribution deal with YouTube and others. For now at least, ABC will limit its relationship with YouTube to clips only. That's a pretty big call; remember YouTube is the category leader that not only has a 40% share of the market, but is also currently over 15 times the size (in streams) of Hulu. There's also YouTube's relationship with Google, which of course has the most formidable online monetization engine (albeit one that hasn't been fully leveraged by YouTube as yet).

The YouTube decision underscores my ambivalence about the broadcast networks' singular embrace of Hulu because there's little evidence that Hulu has yet developed a profitable or sustainable business model. I've written previously about the paucity of ads in Hulu (and broadcasters' own sites for that matter) and how this is creating user expectations that are going to be hard to reset when more ads are inevitably loaded in. One of the reasons users love Hulu is because it is so light on ads. But will Hulu's traffic flatten or decline when the non-skipppable ad load is 2x, 3x or 4x what it is currently?

Further, there was no evidence of customized ad creative or formats meant to incent deeper engagement (unless you count the companion banners prompting users to click to learn more). Deeper engagement and interactivity are supposed to be the calling cards of broadband video advertising. But the ads on Hulu appear to be the same as seen on-air, suggesting Hulu hasn't been able to persuade its brand advertisers to invest in custom creative to leverage the Hulu environment.

Now I know we're in a recession, but still, over a year since Hulu's official launch, and with its tremendous traffic growth, I think all of this is cause for real concern. Hulu is being embraced by the broadcast industry as its main online video vehicle, yet it isn't close to proving it has a model that can actually make money. I don't have insight as to what's going on here, but I hope the networks that are exclusively entrusting their prized programs to Hulu - and consequently incenting huge real-time shifts in viewer behavior - do.

Longer term of course, the networks' bet on Hulu becomes even more profound. That's because as convergence devices of every stripe bring broadband viewing all the way to users' TVs, there's going to be inevitable cannibalization of viewing traditionally done through linear on-air/cable delivery. (Btw, despite much-heralded research to the contrary, anecdotal evidence suggests this is happening already. Just go ask any college student about their viewing behavior.)

Down the road, networks are going to be increasingly reliant on broadband-based ad revenue as their main meal ticket. And if all that's being served up are digital pennies, nickels or dimes - as I believe Hulu is delivering today - then even all the usage in the world will still leave the networks very hungry indeed.

Now that ABC has thrown in with Hulu, you have to believe CBS will as well. With all of the networks on board, they're increasingly betting the industry on the hope that Hulu can figure out its business model. For their sake, let's hope it can.

What do you think? Post a comment now.

Following are 3 key themes from VideoNuze in January:

Broadband video marches to the TV - At CES in early January there were major announcements around connecting broadband to TVs, either directly or through intermediary devices (a recap of all the news is here). All of the major TV manufacturers have put stakes in the ground in this market and we'll be seeing their products released during the year. Technology players like Intel, Broadcom, Adobe, Macrovision, Move Networks, Yahoo and others are also now active in this space. And content aggregators like Netflix and Amazon are also scaling up their efforts.

Some of you have heard me say that as amazing as the growth in broadband video consumption has been over the last 5 years, what's even more amazing is that virtually all of it has happened outside of the traditional TV viewing environment. Consider if someone had forecasted 5 years ago that there would be this huge surge of video consumption, but by the way, practically none of it will happen on TVs. People would have said the forecaster was crazy. Now think about what will happen once widespread TV-based consumption is realized. The entire video landscape will be affected. Broadband-to-the-TV is a game-changer.

Broadband video advertising continues to evolve - The single biggest determinant of broadband video's financial success is solidifying the ad-supported model. For all the moves that Netflix, Amazon, iTunes and others have made recently in the paid space, the disproportionate amount of viewership will continue to be free and ad-supported.

This month brought encouraging research from ABC and Nielsen that online viewers are willing to accept more ads and that recall rates are high. We also saw the kickoff of "the Pool" a new ad consortium spearheaded by VivaKi and including major brands and publishers, which will conduct research around formats and standards. Three more signs of advertising's evolution this month were Panache's deal with MTV (signaling a big video provider's continued maturation of its monetization efforts), a partnership between Adap.tv and EyeWonder (further demonstrating how ecosystem partners are joining up to improve efficiencies for clients and publishers) and Cisco's investment in Digitalsmiths (a long term initiative to deliver context-based advanced advertising across multiple viewing platforms). Lastly, Canoe, the cable industry's recently formed ad consortium continued its progress toward launch.

Broadband Inauguration - Lastly, January witnessed the momentous inauguration of President Barack Obama, causing millions of broadband users to (try to) watch online, often at work. What could have been a shining moment for broadband delivery instead turned into a highly inconsistent and often frustrating experience for many.

In perspective this was not all that surprising. The Internet's capacity has not been built to handle extraordinary peak load. However on normal days, it still does a pretty good job of delivering video smoothly and consistently. As I wrote in my post mortem, hopefully the result of the inauguration snafus will be continued investment in the infrastructure and technologies needed to satisfy growing demand. That's been the hallmark of the Internet, underscored by the fact that 70 million U.S. homes now connect to the 'net via broadband vs. single digit millions just 10 years ago. I remain confident that over time supply will meet demand.

What do you think? Post a comment now.

Welcome to October. Recapping another busy month, here are 3 key themes from September:

1. When established video providers use broadband, it must be to create new value

Broadband simultaneously threatens incumbent video businesses, while also opening up new opportunities. It's crucial that incumbents moving into broadband do so carefully and in ways that create distinct new value. However, in September I wrote several posts highlighting instances where broadband may either be hurting existing video franchises, or adding little new value.

Despite my admiration for Hulu, in these 2 posts, here and here, I questioned its current advertising implementations and asserted that these policies are hurting parent company NBC's on-air ad business. Worse yet, In "CNN is Undermining Its Own Advertisers with New AC360 Live Webcasts" I found an example where a network is using broadband to directly draw eyeballs away from its own on-air advertising. Lastly in "Palin Interview: ABC News Misses Many Broadband Opportunities" I described how the premier interview of the political season produced little more than an online VOD episode for ABC, leaving lots of new potential value untapped.

Meanwhile new entrants are innovating furiously, attempting to invade incumbents' turf. Earlier this week in "Presidential Debate Video on NYTimes.com is Classic Broadband Disruption," I explained how the Times's debate coverage positions it to steal prime audiences from the networks. And at the beginning of this month in "Taste of Home Forges New Model for Magazine Video," I outlined how a plucky UGC-oriented magazine is using new technology to elbow its way into space dominated by larger incumbents.

New entrants are using broadband to target incumbents' audiences; these companies need to bring A-game thinking to their broadband initiatives.

2. Purpose-driven user-generated video is YouTube 2.0

In September I further advanced a concept I've been developing for some time: that "purpose-driven" user-generated video can generate real business value. I think of these as YouTube 2.0 businesses. Exhibit A was a company called Unigo that's trying to disrupt the college guidebook industry through student-submitted video, photos and comments. While still early, I envision more purpose-driven UGV startups cropping up in the near future.

Meanwhile, brand marketers are also tapping the UGV phenomenon with ongoing contests. This trend marked a new milestone with Doritos new Super Bowl ad contest, which I explained in "Doritos Ups UGV Ante with $1 Million Price for Top-Rated 2009 Super Bowl Ad." There I also cataloged about 15 brand-sponsored UGV contests I've found in the last year. This is a growing trend and I expect much more to come.

3. Syndication is all around us

Just in case you weren't sick of hearing me talk about syndication, I'll make one more mention of it before September closes out. Syndication is the uber-trend of the broadband video market, and several announcements underscored its growing importance.

For example, in "Google Content Network Has Lots of Potential, Implications" I described how well-positioned Google is in syndication, as it ties AdSense to YouTube with its new Seth MacFarlane "Cavalcade of Cartoon Comedy" partnership. The month also marked the first syndication-driven merger, between Anystream and Voxant, a combination that threatens to upend the competitive dynamics in the broadband video platform space. Two other syndication milestones of note were AP's deal with thePlatform to power its 2,000+ private syndication network, and MTV's comprehensive deal with Visible Measure to track and analyze its 350+ sites' video efforts.

I know I'm a broken record on this, but regardless of what part of the market you're playing in, if you're not developing a syndication plan, you're going to be out of step in the very near future.

That's it for September, lots more planned in October. Stay tuned.

What do you think? Post a comment!

ABC's Sarah Palin interview from late last week may have been a broadcast ratings success, but in my opinion ABCNews.com has missed out on many big broadband opportunities. ABC's broadband implementation shortfalls span the full gamut of navigation, usability and delivery quality, offering a further data point that many media companies have not yet recognized or capitalized on broadband's full potential.

The biggest interview of the political season was tailor made for on-demand consumption. No doubt millions of people flocked to ABC.com (the site most people would associate with ABC) to find the interview. However, ABC.com is the company's entertainment site, and there is currently no promotion of the interview at all. The visitor is required to guess that clicking on the "news" link in the main navigation will get them to the interview.

Oddly, clicking on the banner brings you to a 2,300 word text story about the interview, with a few thumbnail images sprinkled about. That's a key implementation error in my opinion. Instead of text, that page should be a well-laid out assortment of videos, beginning with the option to watch the full interview either by its 3 segments or as one long episode. A link to ABC's text story would be great to offer, but not be the main focus of the page when users were expecting video.

Clicking on one of the various thumbnails launches the ABCNews.com video player, which then displays the 3 segments' thumbnails at the bottom. Here the issue is that there are no bite-sized clips displayed with specific interview topics (e.g. earmarks, abortion, foreign policy) of likely interest. Plus there is no way to search on those topics specifically. You'd have to watch each of the full 6-8 minute segments the Q&A section to happen upon the part you're particularly interested in. (Note that creating topical clips from the full 22 minute interview using a metadata management tool like Gotuit's VideoMarker Pro would have probably taken ABC News just an hour or so.)

Meanwhile, there's also no way for the user to clip out custom segments, as Hulu and other sites currently allow. Enabling this would have been wildly popular among bloggers - and led to lots of viral distribution. The lack of topical clips creates another missed opportunity as ABC could have aggregated comments and video from other sites tightly related to these specific clips in order to create a really comprehensive user experience on a topic-by-topic basis.

Net, net, it's great that ABCNews.com is making the Palin interview available online. But taken as a whole, the user experience ends up being little more than a TiVo-like interview replay, leaving tons of engagement opportunity - and revenue - on the table. I recognize that doing the kinds of things I'm describing requires a robust content management system and staff. Many companies have not yet made these kinds of commitments to broadband - which just provides more evidence of how nascent the broadband medium still is.

What do you think? Post a comment.

More evidence this morning of the Syndicated Video Economy playing out, as Disney is announcing it will distribute both ABC and ESPN programming to Veoh, the broadband video aggregator. This follows ESPN's first and recent syndication deal with AOL.

Last week in "Disney/ABC's Cheng is Confident About Broadband Video Advertising," I explained how Disney places a huge emphasis on its video player, so that it can present a consistent user experience and also control advertising. The Veoh deal is aligned with that thinking. Veoh users are exposed to Disney programming, but once they want to view, the Disney video player launches.

In fact it's interesting, if you compare what's been implemented so far at Veoh vs. how ABC shows come up at Hulu (an aggregator that Disney does not have a deal with), there's not that much difference. Recall that Hulu is just taking a feed of Disney's program-related metadata, but again, if you actually want to view, you'll launch the Disney video player.

I'm guessing the major difference here, and why some money changes hands with Veoh, but not Hulu, is that Veoh must be making some kind of commitment to promote Disney programs. Though you never want to judge a deal by how it's implemented on day 1, for now Disney doesn't seem to getting much visibility. I noticed a Jimmy Kimmel thumbnail rotate through the Veoh home page, but when I drilled down through the "TV Shows" and "Channel" tabs, I didn't see any extra promotion of ABC programs. In fact the only ABC program even listed in Veoh's generic alphabetized directory was "Ugly Betty." I found a few full-length episodes when I drilled down through an "ABC" link I found with the Kimmel video, but couldn't find that link anywhere else.

All of this is a reminder that there's a very interesting minuet going on between established networks looking to broaden their online reach and the big video aggregators that have grown dramatically and raised lots of money, but are still unprofitable. The Disney-Veoh deal shows that aggregators may be willing to agree to networks' desires for online control in exchange for the potential to generate high-margin promotion-based revenue (remember they're not hosting or delivering the Disney video, so for Veoh in this case there's very little expense involved) and incremental on-page ad revenue. Of course too many of these kinds of implementations and the aggregator's user experience will look quite inconsistent.

No doubt there will be many more network-aggregator deals yet to be done, demonstrating how this market will eventually shape up.

Though broadcast TV networks have been aggressively pushing their shows online, there has been simmering angst about what impact this will ultimately have on their traditional economics.

I have explored this issue recently in "Does Broadband Video Help or Hurt Broadcast TV Networks?" and in two posts on Fox's "Remote-Free TV" initiative here and here. NBCU's CEO Jeff Zucker has helped to stoke this concern, publicly calling broadcasters' #1 challenge the risk of exchanging "analog dollars for digital pennies."

Thus I was both a bit surprised, but also encouraged, to hear Albert Cheng, Disney/ABC's EVP of Digital Media tell me in a recent briefing that despite the fact that online revenue per program per eyeball is currently less than it is for on-air, he's confident that online will eventually catch up and surpass on-air. I don't regard these comments as idle boasts. A thick PowerPoint deck covering its online video strategy, which Disney/ABC shared with me, reveals the meticulous thought and in-depth audience research that is guiding Disney's online video initiatives. Not to mention ABC.com is the most-used network web site.

Cheng is quick to point out that Disney/ABC has followed a careful and consistent strategy since it moved into online distribution a few years ago (note Disney/ABC was the first network to work with iTunes and first to offer programs for free. Other networks quickly followed). The focus has been on continued learning and refinement.

From a strategy standpoint, Disney/ABC's video player, powered by Move Networks, is the centerpiece. The focus is on delivering a high-quality, consistent user experience in which ads are engaging, but not intrusive. While other networks have received more ink for their syndication efforts Cheng is quick to point out that access to Disney/ABC's player has always been open, allowing other sites to refer their users, if not actually integrate the player.

By making an RSS feed available of its online programs' meta-data, Cheng believes Disney/ABC can achieve much of what others gain through syndication deals (see how Hulu displays results for a "Lost" search below, subtly noting "Watch at ABC" This is the same concept I noted in my recent Hulu vs. Comcast post), while avoiding the downsides of ad sales conflicts, business rules implementation and delivery overhead.

By controlling their own ad inventory, Disney/ABC avoids the sometimes one-sided revenue sharing deals widely-discussed in the industry (Hulu alone is rumored to keep 90%) and the channel conflict that inevitably results from having two sales teams calling on the same media buyers. Cheng does see a role for online aggregators, but mainly for library or off-network product, especially as a backstop for traditional syndication.

Cheng's rationale for broadband's eventual revenue superiority to on-air ultimately boils down to this: since broadband can offer both superior targeting and engagement vs. on-air, by definition it deserves higher pricing. But getting to that vision from today's reality is where Disney/ABC's hard work of evangelizing to advertisers and ongoing testing is key (and where the company's recently announced "Ad Lab" comes in).

What do you think? Post a comment and let everyone know!

Yesterday's article in the NY Times, "In the Age of TiVo and Web Video, What is Prime Time?" was the latest of many about the changing landscape of broadcast network TV. An underlying question that receives a lot of attention, yet little in the way of clear-cut conclusions: Does broadband video help or hurt broadcast TV networks?

The jumble of conflicting data and opinions on this topic (as well as the related topic of DVRs' impact on the networks) is causing plenty of speculation during this important upfront week of when billions of dollars of networks' ads are bought and sold.

Here's a synopsis of how I think proponents of each would defend their answer:

Broadband video helps: The world is changing - consumers are more empowered than ever and it's pointless to resist. Broadband is a great way to catch up on episodes missed, conveniently sample programs, engender interactivity, transform viewers into viral promoters, etc. More exposure will translate into more on-air viewership. Plus as broadband audience size builds ad revenue will as well. Network programming is and always will be the most watched, most valued source of video entertainment and with broadband opening up all kinds of new revenue opportunities, there's ample reason to be optimistic.

Broadband video hurts: Broadband kills networks' success formula, driving profitable on-air viewership to profitless broadband viewership. It's pie-in-the-sky thinking to believe that broadband revenues will ever catch up. Since only a limited amount of ads can be included in online broadcasts, even the higher CPMs received per ad deliver nowhere close to the revenue per episode per viewer as the on-air model does. All the interactivity and engagement in the world will never offset this shortfall. As more programs move online and viewers can eventually watch these right on their TVs, the shift from on-air to online consumption will only accelerate, causing permanent erosion to the traditional economic formula.

So which is it - are networks helped or hurt by broadband? I think the answer is short-term it helps, but long-term it hurts. In the short-term, there is evidence that broadband expands audiences. For example, The Office's premiere last fall 9.7 million people tuned in, but another 2.7 million watched online.

Expanding viewership is great, but what happens to networks' revenues if next fall 7.7 million watch on-air and 4.7 million online? And 3 years from now, 5.7 million on-air and 6.7 million online? You can count on viewers to gravitate to the optimal viewing experience, and if online further improves, expect more eyeballs to shift. Again, since there are fewer ads online, the only way for total network revenues to keep pace are to show more ads online (see ABC's plan on that front), dramatically raise CPMs and/or dramatically raise viewership. My guess is that even the most optimal mix of these three will not deliver enough to offset on-air's revenue decline.

In the heat of the Democratic primary, the five major Sunday morning talk shows have recently taken on greater prominence. For political junkies like me, even after a week's worth of endless campaign coverage, it is great sport to watch the candidates and their surrogates put the best face on the week's events, while eagerly trying to tee up issues for the coming week's news cycle.

The Sunday shows are also perfect fodder for broadband video consumption. On-air they are neatly segmented by guests and topics, their archives offer a vivid research opportunity for both editorial and user-driven curation, and the audiences that tune in are upscale and appealing to advertisers.

With all this going for them, I decided to investigate the online presence of the five Sunday morning shows, ABC's "This Week with George Stephanopoulos," CBS's "Face the Nation with Bob Schieffer," FOX's "Fox News Sunday with Chris Wallace," NBC's "Meet the Press with Tim Russert" and CNN's "Late Edition with Wolf Blitzer."

Though all of the sites had their strengths, as a group I found them to be surprisingly average initiatives, especially in comparison to the superb efforts these same networks have mounted for their online entertainment programming. (Note that all I found for "Late Edition" was a brochure page)

"FTN" would have to rank at the top of my list, primarily because it segments the show by its guests and topics and displays them in the user-friendliest manner. This allows the user to quickly zero in on desired segments. "This Week" and "MTP" do some of this as well, though I found their presentation not as straightforward. What's missing from all are related clips across episodes curated in a meaningful way. Presentation is very episode-centric.

While all the sites rely heavily on pre-roll ads, "FTN" gets credit for using some frequency capping. "This Week," seems to ignore the best practices that ABC.com follows in presenting its shows with limited interruptions. Not only does it not frequency cap, it also ran the same 2 ads - one for Intel and one for Verizon Wireless - over and over. Needless to say this became tiresome after clicking to watch several segments.

Meanwhile, navigation and available content on these sites are all over the board. "MTP" offers a link to watch the whole program with limited interruptions, while "FNS" offers a text transcript of the most recent program, but not a video of the whole program. "This Week's" main text navigation has links to pure text stories, text stories with embedded video clips, and video clips alone, but no way to sort the list by media type. Search on each site also yields highly diverse results - some video, some not. One missed opportunity is that none offer any user editing features. Putting together your own highlights reel to be embedded on a blog or social networking site would likely be great fun for many hard-core viewers.

The Sunday talk shows offer dynamite content, highly leverageable for broadband consumption. Hopefully as the political season rolls on we'll see the networks recognize this and continue to invest in new features and improved usability.

What do you think? Post a comment and let us all know!

Yesterday brought the public release of Adobe Media Player 1.0, first announced almost a year ago. AMP enters a very crowded space of other media players including its own Flash player, plus Windows Media Player, RealPlayer, QuickTime, SilverLight and others.

At a time when the broadband video industry in general and mainstream users in particular crave standardization and simplicity, can another media player, with a "walled garden" content strategy to boot, add new value? While it's awfully tempting to say "no," I think there are reasons why AMP could well matter, subject to how well Adobe delivers on its vision. Here's why:

AMP offers 2 things that, in my opinion, the market still needs. First, a widely used downloadable app that specializes in delivering on FREE video content. Before some of you jump up and say, "Will, what about iTunes?" keep in mind that iTunes offers primarily a PAID video catalog (though to be sure there are some free video podcasts). Second, and related, AMP' provides a download environment in which advertising can be properly inserted, measured and reported on.

These are important because together they open up an entirely new consumer use case for broadband video: offline, free, ad-supported viewing. I've been saying for a while that an odd dichotomy has taken root in the broadband industry, particularly for network programs: users can get either free, ad-supported streamed video at lots of places (provided they're online) OR they can get paid, downloaded video (iTunes model) which allows offline viewing. But this has meant that someone who wants to watch a show offline, but isn't willing to pay for the pleasure of doing so is out of luck (one exception is NBC Direct). Having media stored locally in AMP would allow the offline, free use case I'm describing. This would open up a boatload of premium ad inventory that advertisers savor.

If that's AMP's opportunity, then the question is how well are they executing on it? Though it's never fair to judge a version 1.0 on its first day, my experience with AMP shows there's room for improvement. First is the currently thin content selection that needs to be massively built out to be appealing and competitive. Second is an inconsistent user experience in which some shows are downloadable, yet many are not (e.g. CSI, Hawaii Five-O, Melrose Place). Third are getting the basics right. In my case, when I did download some episodes successfully (blip.tv's "DadLabs" and "Goodnight Burbank") they didn't show up in my download section at all. Ugh. I'm hopeful that Adobe will be able to address all of these.

On the ad side, I think there will be plenty of enthusiasm from ad technology firms to integrate with AMP as Adobe proves it can drive millions of AMP downloads (in fact Kiptronic announced its integration yesterday and other will surely follow). Plus, advertisers should be expected to get on board.

It should be noted however, that even for a mighty brand like Adobe, winning the hearts and minds of users to download and use AMP isn't a trivial undertaking. I have some personal experience with this from my early days consulting at Maven Networks, which offered an eerily similar download app as AMP when the company started up. Though that was in the Mesozoic broadband era of 2003 and Maven was an unknown entity, the company never got much traction with its download app and eventually transitioned over to a streaming model. Since then I've come to believe that premium content must drive the download process, not vice-versa. One successful example of this is ABC.com using its shows to drive millions of downloads of the Move Networks player.

Net, net, AMP is a timely product that could well matter. How well Adobe executes on its vision will determine to what extent it does.

Last week I had a chance to sit down with Brent Weinstein, CEO/founder of 60Frames, which is among a new group of companies I refer to as "broadband studios." This is a category that has generated a healthy amount of funding and activity recently, including, among others, Next New Networks ($23 million to date), Generate ($6 million), Revision3 ($9 million), Stage 9 (Disney/ABC's in-house unit), Vuguru (Michael Eisner's shop) and a slew of comedy-focused initiatives. 60Frames itself has raised $3.5 million from Tudor, Pilot Group and others.

The impetus for 60Frames came when Brent was heading up digital entertainment at UTA and observed that many clients wanted to create digital/broadband fare but wanted a partner for the same roles they've come to expect studios to handle (e.g. financing, distribution, legal, creative, etc.). 60Frames aims to differentiate itself from the pack by being "artist-friendly" - allowing greater creative control and more significant ownership and by relying on strong relationships. With an existing staff of 11 and a goal of launching 50 programs by year end, the 60Frames team is no doubt going full tilt.

60Frames is following a traditional portfolio approach, working with great talent (Coen brothers, John August, Tom Fontana, others) but recognizing that results in this new medium will vary - there will be some winners and some losers. The goal is obviously to have the best ratio possible. Traditional studios improve their odds by using collective history and data about what types of projects succeed and which ones don't. But no such lengthy track record or data exists in broadband just yet, so it's a lot more speculative pursuit.

I asked Brent if there's any creative formula 60Frames is using to guide its decision-making. He was pretty emphatic that there's no "formula," but did concede 60Frames is focused on short-form (under 5 minutes), is biased toward comedy where episodes can stand alone more readily, and is mainly looking at niche audiences with a bulls-eye of 18-34 men, where consumption is highest.

Nurturing relationships and developing great content is only part of the equation for these budding studios' success. Distribution and monetization are also incredibly important, as broadband necessitates an entirely different model. Regarding distribution, I was encouraged to see 60Frames is solidly in the syndication camp to the point that it has not even set up destination sites for its 7 launched programs yet. 60Frames has a network of partners including Bebo, blip.tv, DailyMotion, iTunes, MySpace, YouTube and others. Gaining access to all the popular online destinations will accelerate success. Meanwhile advertising is being handled by partner SpotRunner, which has deep hooks in the space.

Broadband studios like 60Frames harken back to the original studio moguls in some ways - taking creative and financial risk to explore what works in a new medium. It's way too early to know if or to what extent they'll succeed, but if they do we can expect a gold rush of imitators.

(Note: This is the first of a series of posts with companies participating in the 2008 Media Summit, a premier industry event which will be held next week in NYC. VideoNuze has partnered with Digital Hollywood, the Media Summit's producer, to provide select news and analysis coverage.)

Investors continue to show lots of optimism about the broadband video aggregator category. The latest data point is TidalTV, a new entrant that announced last week it has raised $15 million from NEA and Valhalla Partners. This comes on top of a crowd of well-funded startups: Joost ($45M+), Veoh ($40M+ to date), Building B ($17.5M), Vuze ($32M+), Hulu ($100M) and many others who are attacking this space in one way or another.

To better understand how TidalTV will distinguish itself from the pack, yesterday I had a lengthy briefing with CEO Mollie Spilman. She provided her first extensive remarks about TidalTV's game plan since last week's announcement. (Thanks to my old friend Tom MacIsaac, former CEO of Lightningcast, for facilitating the introduction. Tom recently launched Cove Street Partners and is as smart a player in the broadband video ad space as anyone around.)

The first thing to know about TidalTV is that it is pursuing mainstream users, not early adopters. This targeting pervades all its decision-making: site design is clean and approachable (Mollie said Apple is their role model), content is professional/well-branded only (no UGC), user experience incorporates a traditional linear programming sensibility combined with full on-demand access and advertising mimics traditional pods, while also integrating new broadband-only formats.

In short, TidalTV's making a bet that given how nascent broadband video adoption is among mainstream users, there is ample room to become the brand/destination of choice by providing an experience that feels more similar to traditional TV than to online. Though Mollie says that Apple is TidalTV's heaviest influence, I see clear parallels to AOL from the mid-late '90s. Recall that AOL's pervasive consumer-friendly UI, content and marketing (the Steve Case mantra) enabled it to crush all the dial-up ISPs which had more techie, complicated orientations. Watching AOL's rise made me a big believer that consumer-friendliness can indeed be a meaningful competitive differentiator if executed really well.

AOL is an interesting point of comparison because TidalTV's founder Scott Ferber was a co-founder of Advertising.com, which was sold to AOL in 2004, albeit after the Case era ended at AOL. Mollie was at Ad.com for 6 years as well. Other TidalTV executives come from Ad.com, Joost and Fox. The Ad.com lineage helps explain why TidalTV has chosen to invest significantly in optimizing its advertising capabilities rather than building a lot of its own publishing or delivery features (note TidalTV is all Flash-based streaming with no downloads and no P2P).

TidalTV has some interesting challenges ahead. First is content. It sounds like the company has made substantial progress in deals to obtain content from the "top 50 brands" which includes not only broadcast and cable network fare, but also print, online publishers and others who produce professional video. Yet Mollie concedes that "90% of TidalTV's content at launch could probably be found somewhere on-air or online," as content providers increasingly pursue widespread syndication. TidalTV's opportunity is to pull the content together in a neat, intuitive manner that mainstream users appreciate.

TidalTV will do so by using a "faux linear" presentation, which entails it becoming a "digital programmer," assembling its partners' shows into their own channelized formats (e.g. "The CSI Channel"), with traditional linear air times. For example, if you come to the site at 4pm, you'd see "what's on now" on multiple channels. At launch Mollie anticipates offering 10-15 channels, all on a revenue share basis with providers. This presentation approach is meant to appeal to mainstream users by providing a tangible link to a TV-oriented experience. If a user clicks to start watching, a linear "feed" will start playing, including ad breaks. However, TidalTV will also offer all programs on a full, on-demand basis as well.

But to illustrate how complicated the content acquisition terrain is for 3rd parties like TidalTV, consider Hulu, the NBC/FOX JV. It has insisted that prospective syndication partners take the Hulu player if they're to gain access to popular shows like "Heroes" and "24." Doing so could break TidalTV's user-friendly design. Mollie acknowledged this challenge, but felt confident that in examples like these, there should be adequate incentives to work out an arrangement. Then there's ABC, which to date has not pursued syndication aggressively. If it maintains its ABC.com centric approach, simply not making its programs available to 3rd parties, that leaves aggregators with obvious holes in their offerings. This would be especially challenging for a site like TidalTV, which appeals directly to mainstream users. Speaking generically, Mollie said that TidalTV's neutral "Switzerland" approach (i.e. no investments from media companies) should help in all of its content negotiations.

Driving traffic is another key issue. With other players in the market already, they've had a chance to build their traffic, though not necessarily in TidalTV's core target audience. For instance, Veoh alone says it's getting 20M+ unique visitors per month. To jumpstart traffic, Mollie said that TidalTV is prepared to fund an aggressive marketing plan, testing direct marketing, search, offline ads, outdoor, SEO, viral, PR and other tactics.

Disney/ABC Television Group's official announcement this morning of Stage 9 Digital Media, an experimental new media content studio, is another key milestone in the fast-moving broadband video industry.

I got a short briefing about Stage 9 late yesterday from Disney/ABC because it asked me to provide some analyst context to the LA Times' Dawn Chmielewski, who's done a great piece here. Stage 9 is Disney/ABC's key initiative to reach the coveted 18-34 audience in synch with this audience's unique media consumption patterns. Programming will be short, funny, well-produced, episodic, and widely distributed through popular broadband sites, social networks, mobile and download services.

I interpret Disney/ABC's move, when coupled with recent initiatives by other big media companies into original broadband video production, as further evidence of two key trends: that broadband video has come of age as a key priority for the largest media companies and that it is impossible to appeal to today's younger audiences simply by hewing to the traditional rules of the media game.

Also of significance is that Disney/ABC announced that "Squeegees," which is Stage 9's first release, will be co-exclusively premiered on ABC.com and YouTube starting today and sponsored by Toyota. Yes, you read that right. YouTube! The scruffy user-generated phenom that big media was threatening to sue out existence not so long ago, and which of course is now owned by Google, big media's most anxiety-inducing "frenemy," has been elevated to launch partner status for Stage 9's first program.

The "Squeegees" co-premiere is quite an accomplishment for YouTube. It shows that YouTube's methodical efforts to gain legitimacy (and a business model!) by establishing partner channels with media companies are beginning to pay off. David Eun, Google's VP of Content Partnerships has repeatedly explained this game plan to me, and others over the last year. The Stage 9 launch partnership should certainly be regarded as a major win for the young company. It is also another data point I'd use to support my contention that in the broadband age, traditional conceptions about copyright monetization need to be radically re-thought (Viacom, are you listening?).

I'm enthusiastic about the Stage 9 initiative, as I believe it holds lots of potential for Disney/ABC. It gives the company inroads to the elusive 18-34 set, offers the prospect of innumerable and invaluable insights about how to effectively program in the broadband age, provides a whole new internal breeding ground for developing new on-air programming (a possible double win, as this might help fix the broken and expensive traditional pilot process, though my enthusiasm on this point is tempered by news today of Quarterlife's NBC ratings fiasco) and creates new and exciting multi-platform sponsorship opportunities.

Microsoft grabbed the early PR spotlight at the Consumer Electronics Show (CES), now underway in Las Vegas, announcing a variety of deals across the broadband video spectrum. The deals, announced by Bill Gates in his traditional night 1 keynote, reinforce Microsoft's intentions to play multiple roles in what Gates calls the "first true Digital Decade."

Here's a look at Microsoft's deals and why they matter:

NBCU 2008 Olympics on MSN, using Silverlight

Microsoft and NBC, which has the broadcast rights to the '08 Summer Games from Beijing, announced that MSN would be the exclusive partner for NBCOlympics.com including thousands of hours of live video coverage, and that Silverlight, which is Microsoft's "Flash-killer", would be used. As I mentioned in my "6 Predictions for 2008", the '08 games are going to be the biggest broadband video event yet. The deal gains MSN lots of traffic and Silverlight lots of exposure and downloads, not to mention serious validation as a live streaming platform if it executes well.

ABC/Disney and MGM content on XBox LIVE

In a further move to bolster the premium-quality content available in XBox LIVE (the content offering that accompanies XBox 360), Microsoft announced that both ABC/Disney and MGM would now be providing both SD and HD content. These moves bring XBox LIVE's catalog closer to parity with iTunes, while keeping up the competition with Amazon Unbox and other stores. Separately, Microsoft said that XBox racked up 17.7 million units sold during the '07 holiday season.(correction, Microsoft press release misstated this number. Holiday sales were actually 4.3 million units, bringing cumulative units sold to date to 17.7 million, thx Karl)

XBox users have been remarkable active purchasers and downloaders using XBox LIVE, and previous briefings I've conducted with XBox executives suggest that the initiative has been particularly successful with HD. Since Xbox is purchased primarily as a gaming platform, it serves as a great Trojan horse opportunity for Microsoft to gain broadband access to the TV. Meanwhile, XBox LIVE has served as the deal unit for Zune's library as well, so these moves are important to watch as they benefit Microsoft's efforts to dislodge iPod from its perch as the leading digital media player. Only disappointment here is no ad-supported counterpart was announced for ABC programs, leaving AOL as ABC's only announced broadband syndication partner, as best I can tell.

BT and XBox 360 Integration

Microsoft leveraged Xbox 360 for another convergence play, announcing with BT that the company's "BT Vision" IPTV service would be available for XBox 360 owners as an integrated service offering. This means that no separate set-top box would be required for BT Vision subs. Though the box won't roll out until mid '08, this concept has compelling upside for both sides and could be a nice blueprint for future IPTV deals. It eliminates set-top capex for BT, while providing strong marketing benefits to both parties, helping drive broadband/TV convergence on the back of the popular XBox gaming console.

Showtime, TNT and CNN with new apps on Mediaroom, Samsung supporting Extender

Elsewhere, Microsoft announced that Showtime, TNT and CNN would be creating new apps for Microsoft's Mediaroom IPTV platform, which it says is now installed on 1M set-tops globally. And lastly, that Samsung will support Extender for Windows Media Center, which means that HD content can be sent over wired or wireless-N networks from PC to TV. Extender hasn't caught on yet, but Microsoft is continuing to push it as a bridge device. I've yet to test it, but have that on my list of to-do's.

Taken together, these announcements from Microsoft show the company's vast resources allow it to play a role in all aspects of the broadband era - software, devices, services, content, gaming, etc. Less pronounced in these deals was the company's recently added online advertising prowess, which will soon be applied to broadband video as well. Stay tuned for news on this front as '08 unfolds.

Last week a journalist interviewing me for a story asked: "Which industry or industries are potentially threatened the most by the rise of broadband video and on-demand usage?"

It's a tough question to answer because there are so many different variables at play. However, if pressed, my answer would have to be local broadcast TV stations. Taking aside the current WGA strike which exposes yet another industry vulnerability, local TV stations find themselves on the short end of just about every macro trend being driven by broadband and on-demand adoption. To thrive in the future, stations are going to have to radically reinvent their business models. It's by no means an impossible task, but it is going to require savvy and aggressive strategic moves.

Consider the perfect storm local stations are up against:

1. Broadcast networks (ABC, CBS, FOX, NBC) are avidly pursuing broadband distribution of their hit shows, creating competition to the traditional model of geographic programming exclusivity for local stations. Initiatives such as Hulu and CBS's Audience Network can be thought of as 'digital replicas" of the old analog affiliate model. Networks have gotten broadband religion; notwithstanding their finessed protestations, they're only going to be increasing their digital bets, leaving their affiliates with new competition for eyeballs at every turn.

2. On demand viewing is shattering prime time viewership and the all important "lead-in" to late news broadcasts. Between DVRs and VOD, more and more of the world is habituating itself to watching programs when they want to, not when they originally ran. So appointment viewing is out and along with it the concept of audience aggregation. Strip out prime time and the local station needs to build audience for its own shows and newscasts by itself.

3. Local news, weather and sports content are the mainstays of local newscasts, yet the availability of this kind of content is becoming pervasive and conveniently accessible. Remember when you had to stay up late to find out what the scores were? Doesn't that seem quaint now? These days every spec of information about these key categories is just a click away, further undermining local newscasts' value.

4. Advertisers have more options than ever and are gradually going to move spending to approaches that are both more ROI-centric (e.g. Google) and a better match for their customers' media behavior. Think about it - if you're a Honda, Scion or Volkswagen dealer targeting younger demos, is local TV really the best way to reach this audience? The range of options for local advertisers is already robust and is only going to become more so in the future.

All of this said, however, all is not lost by any stretch. With the right leadership, I happen to believe that local stations can find ways to manage their way through the chaotic days ahead. Tops on my list would be embracing broadband as a new programming platform to leverage their local expertise, blasting their content out through every possible distribution path, radically re-training their ad sales teams to be Internet-literate, cross platform-obsessed warriors and re-creating their brands' perceptions for the broadband and on-demand era.

Broadcast TV stations need to look no further than their cross-town rival newspapers to understand the gale-force competitive winds coming their way. Hopefully with these examples plainly visible, they'll prepare themselves appropriately.

Not breaking news now, but Hulu lifted the veil of secrecy a bit today, releasing some screen shots and setting up a private beta (I'm trying to yank some strings to get access), in advance of a planned public launch early next year.

Hulu's been surrounded by a bunch of naysayers from the beginning, though much of the nay-ing has been based on little else than cheap shots about the name, delayed launch, etc. Things that in the grand scheme of things mean virtually nothing in my opinion and only serve to distract attention from the real question at hand: can Hulu become NBC and Fox's (for now) formula for success in the broadband video era?

Now it's time for Hulu to silence the rabble. Until I get my own hands on it, I'm going to reserve in-depth commentary. But at least several things that look intriguing:

• Shorter commercial breaks and overlays - Looks like the tension between user focus vs. advertiser focus is skewing toward users. A welcome change from traditional media thinking.
• Widespread distribution - I've been a big fan of this from the start. Deals with AOL, Yahoo, MySpace, Comcast, etc. ensures that Hulu content is widely available where users already are.
• More content deals - One of the knocks on Hulu was that neither CBS nor ABC joined up front. However, recent deals with Sony and MGM show Hulu continues to gain traction with other premium providers.
• Features - Beyond the standard range of embed, full-screen, send-to-friend features, it looks like there's an interesting "custom clip" capability to let users crop out scenes from favorite shows to pass along. This user control could enable massive new short form video inventory and could be a precursor to more interesting and creative user-generated mashups. All of this is highly monetizable.

More thoughts on Hulu to come.

Today I had the privilege of speaking to a top broadcast TV group's senior executives at their annual offsite. Their president has seen my presentation at the NAB Futures Summit 6 months ago and invited me in to speak.

It's important to recognize there's a bit of a schism happening in the broadcast TV industry, fueled by broadband. One the one hand, broadcast networks (ABC, CBS, FOX, NBC) are rushing headlong into broadband distribution. It's hard to remember, but it's been less than 2 years since Disney/ABC did its first digital distribution deal with iTunes. Since that time all networks have struck iTunes and other download deals, have put made most of their hit shows available for streaming, and more recently have plowed into new ventures (Hulu, CBS IAN, etc.) meant to dramatically broaden their digital reach. In short, the networks have smelled the coffee - they are moving to create what I've called a "digital replica" of the traditional broadcast industry.

None of this is good news for local TV broadcasters, until recently the only place to go for networks' hit programs. Naturally these digital alternatives will further fragment audiences jeopardizing lead-ins for late news and undermining ad revenues. On the bright side, many broadcasters aren't sitting still. In recent research Broadband Directions completed, we found that 46 of 50 (92%) stations we've been tracking now offer broadband video at their web sites. And of the 46, 39 (85%) are selling some kind of ads (pre-roll, display, sponsorships) against their video.

While this is encouraging, there's a long way to go. By and large local broadcasters' broadband video is a collection of newsclips, offering little personalization, targeted ads or widespread syndication. These and other areas offer broadcasters ample opportunity. Broadband is a real game-changer for local broadcasters, who need to gird themselves for its coming onslaught. But with sufficient willingness to adapt their models, they should be beneficiaries as well.