The big story in the media for the rest of the week is the annual National Cable Telecommunications Association Show, or “the cable show,” as its commonly called.

This year’s primary topic looks like it will be how the big, traditional operators in the business will adapt to an age when the Internet is giving people more options to watch shows, and not always in a way that feeds the bank.

Here is our own take on the show from the Reuters wire:

Both sets of companies will be brainstorming on how to cope with or benefit from disintermediation: consumers can now watch decent-quality video online whenever they want, and often for free.

“Last year, cable companies were in a more probelgradetectionist mode but now they’re facing up to the inevitable trend, because online video is really here to stay,” said Tuna Amobi, equity analyst at Standard & Poor’s.

Executives will also have the economy on their minds.

“The current recession has cut into consumer spending for household TV and telecommunications, while also causing most marketers to reduce their advertising budgets,” said Collins Stewart analyst Thomas Eagan.

Longer term, the industry hopes to forge new tie-ups to capitalize on the online trend.

Broadcasting & Cable approaches the same topic, but with the requisite “it’s still early days” comment:

But with online viewing still amounting to a tiny fraction of actual viewing (not to mention revenue), the debate over a viable business model may be a lot louder than it needs to be. Cable networks, however, have to work with their pipelines to protect everyone’s interests.

“We’re constantly looking at evolving our economic models on our shows to ensure that we’re protected well into the future,” says Andrea Wong, president and CEO of Lifetime Networks. “I don’t think anyone has the magic answer yet. I think that we’re all trying to experiment and find new ways to do business together. I think we have to.”

Those last two sentences could have been taken from a newspaper executive.

MarketWatch reports on operators freaked out about the economic recession causing people to simply give up cable and do something else with their time.

Since last May’s Cable Show in New Orleans, the price of cable stocks have dropped by an average of 31%, with most of the declines coming after the September collapse of Lehman Brothers that triggered a worldwide financial meltdown.

The phenomenon of “cord-cutting” has been a concern of some cable executives, most notably Time Warner Cable (TWC) Chairman Glenn Britt, who has voiced his belief that the wide availability of free, ad-supported television shows online through sites like Hulu, Veoh and others has made it feasible to stop paying for cable or satellite service.

Keep an eye on:

• Speaking of cable and the Internet, Google’s YouTube signed a deal with Disney to offer ABC and ESPN clips on its Web video service. Disney might also put full-length shows on the Hulu joint venture betwen News Corp and NBC Universal. This is something that the cable guys mentioned above are watching with some alarm because, as we noted above, this stuff would be free, and no one wants to wind up like newspapers who gave away the store online for the past decade. (PaidContent and The Wall Street Journal)
• Speaking of newspapers, the Journal and The New York Times had the same bright idea: Profiles of the Detroit Free Press and Detroit News on their first day of delivering the news without a print newspaper. It was either genius, dumb luck or just plain dumb, depending on how you lookat it; big events in the collapsing auto industry, not to mention some other noteworthy stuff, made for a huge news day. That either spurred online interest or made readers scream because they had no paper to read about it. (The Wall Street Journal, The New York Times)
• More from newspaper land: The New York Times cut its staff and sought pay concessions on Thursday. Now the axe is swinging at the Times-owned Boston Globe. Thirty buyouts, 20 layoffs. (Boston Business Journal)
  Also, online ad growth “screeches to a halt.” Sigh. (Silicon Alley Insider)
• Google commits $100 million to its venture capital fund, according to unnamed sources, like it’s some kind of scandal. Google also names folks who will run it, fortunately showing its confidence in them by saying so on the record. (The Wall Street Journal, The New York Times)
• Google Maps is good at catching cheating husbands for free, if you can believe this report. (The Sun)

(Photo: Reuters)

The jury is out on whether advertising will ever work for online video sites as they strive to become real profit-generating businesses. Well, it’s worked for Hulu, but not in the profit-generating kind of way — at least not right away.

Hulu jumped to become the fourth most-watched video site in the United States last month thanks to a major advertising spot during the Super Bowl, according to Internet audience measurement firm comScore in this Reuters story. Those spots featured Alec Baldwin telling viewers about Hulu’s “evil plot to destroy the world” by turning people’s brains to mush.

Comscore said Hulu’s viewership grew 42 percent to 34.7 million unique visitors watching around 333 million videos.

The irony of Hulu’s “ratings” success on the back of a TV advertisement during one of the most watched events on the planet is not lost on us. Like many other Web video sites Hulu isn’t quite bringing in millions of dollars in profits for its owners yet, but this might be a start.

Google’s YouTube is also on the hunt for revenues and profits to match its huge popularity. We’re not sure if advertising on national television will help as it already has three times the number of viewers that Hulu does. YouTube’s issues might have more do with the reluctance of mainstream advertisers to make major commitments to advertising on its site which is dominated by user-generated clips rather than professionally made ones. Hulu, which only features TV shows and archive movies, has had more success with advertisers.

Even if YouTube decided to advertise during the Super Bowl, it might not have the same return on investment. As the New York Times explains here, Hulu paid next to nothing for Super Bowl ad spots worth nearly $3 million as this year’s football extravaganza was broadcast by part owner NBC.

Keep an eye on:

• MySpace, BT to offer Web contract domains to users (Reuters)
• Investor supports Comcast’s buyback strategy (NY Post)
• Houston Chronicle cuts 12 percent of staff (Reuters)

Video streaming Web site Hulu.com marked its one-year anniversary on Thursday by announcing new social networking features, as the site seeks to gain ground on other Internet entertainment hubs.
    
The Web site, a joint venture between General Electric Co.-owned NBC Universal and News Corp., launched "Hulu Friends" which integrates functions from social networking sites MySpace and Facebook, as well as e-mail providers Gmail, Yahoo! Mail and Hotmail, and allows users to see what their friends are watching, share new videos and leave notes for each other.
    
Hulu, which allows visitors to view television episodes and movies on their home computers, still has a long way to go if it hopes to catch up to video sharing giant YouTube.com. Internet tracking site comScore reported this month that YouTube accounted for about 43 percent of all videos viewed over the Internet in January. By comparison, Hulu.com had only a 1.7 percent share of all videos viewed. The Google-owned YouTube has reached out to mainstream entertainment companies, including Universal Music Group, as the site seeks to add more premium entertainment on its site. But unlike YouTube, which mostly has short video clips, Hulu allows users to view entire episodes, and it has positive trends in its favor.

Research firm Knowledge Networks reported in February that use of third-party video hosting sites such as Hulu to access network television shows doubled since 2007 among Internet video users age 13-54.

After jumping to become the sixth most viewed online U.S. video site in October, Hulu managed to keep its spot in November despite not having the benefit of a Sarah Palin/Tina Fey boost from Saturday Night Live. 

Hulu is the new star of the rapid growth of online video as a mainstream media in U.S. New comScore data shows more than 77 percent of all U.S. Internet users watched online video.  

YouTube is, of course, the most watched video site by quite a stretch, with more than 12 billion videos watched. Fox Interactive Media (mostly MySpace) stands at No.2 with 439 million; Viacom Digital has 325 million and Yahoo next with 304 million. Microsoft had 296 million.

Hulu had 227 million videos viewed and maintained its highest position even though several commentators had expected Hulu’s boost would fade after the election. It’s also interesting because unlike YouTube, Hulu has managed to populate most of its mix of TV shows and old movies with advertising. This may be annoying to some online viewers but it is widely admired in the digital advertising world.

The slick site, owned by News Corp and NBC Universal, keeps winning friends and fans across the board. The New York TImes on Sunday, for instance, professed its love thus:

On Hulu, you can also watch full-screen, in nice, rolling high-resolution. After years of watching YouTube, I thought I had stopped caring about glamorous presentation. But man: the neatness and elegance of Hulu — where you can watch hundreds of whole shows from NBC, Fox and other networks, as well as movie and news clips — is so relaxing.

Top U.S. Online Video Properties* by Videos Viewed November 2008

Total U.S. – Home/Work/University Locations

Source: comScore Video Metrix

Property                    Videos        Share (%) of

                             (000)           Videos

Total Internet            12,677,063         100.0

Google Sites               5,107,302          40.3

Fox Interactive Media        439,091           3.5

Viacom Digital               324,903           2.6

Yahoo! Sites                 304,331           2.4

Microsoft Sites              296,285           2.3

Hulu                         226,540           1.8

Turner Network               214,709           1.7

Disney Online                137,165           1.1

AOL LLC                      115,306           0.9

ESPN                          95,622           0.8
*Rankings based on video content sites; excludes video server networks.  Online video includes both streaming and progressive download video.

Everyone wants to save money in these troubled economic times. For those of you craving a flat-panel TV, Bernstein Research suggests you might be able to afford a “nice” LCD model if you cancel your cable bill and utilize free Web video sites like Hulu.com for a year.

In the report “The Nouveau Broke - Hitchhiker’s Guide to a Free LCD TV,” analyst Jeff Evenson says IP video will eventually account for at least 80 percent of all video viewed globally as college students, recent graduates, and young adults — equipped with computers and broadband Internet — find cable less necessary.

The economic crisis could accelerate Web video adoption, he writes:

Some consumers may decide to reduce expenses by canceling video subscriptions (e.g., cable) and viewing content over the Internet … we conclude that making the switch could easily pay for a “nice” LCD TV in under a year if consumers utilize advertising-supported content and 3 years with reasonable use of “for fee” downloads.

Using the simplest option of buying a 32″ HD LCD TV using only free IP Video content, the payback period is 6 months and the consumer would save $1,300 over a three year period

With many top-rated network TV shows now available for free online, plus the likes of Netflix, Evenson says the cost of buying an LCD TV, a box to connect it to your computer, and content, is now less than the cost of basic cable packages.

As for where you can find your favorite shows online? Bernstein provides this table:

Keep an eye on

• Sumner Redstone recently proposed to sell National Amusements’ 1,500-screen theater chain to help pay off debt, but it may not be enough to placate his bankers because there’s no agreement on what the theaters are worth (New York Times)
• Blockbuster said it will roll out a new digital media player that brings fewer, but more recent titles from the Internet to consumers’ televisions than a six-month old offering from rival Netflix (Reuters)
• Warner Music Group’s quarterly earnings beat Wall Street estimates but the company said results in early fiscal 2009 may look worse than later in the year due to its music release schedule and the global economy (Reuters)
• New York’s Tribeca Film Festival, founded by actor Robert De Niro after the Sept 11 attacks, plans to stage a new festival in Qatar next year (Reuters)

(Photo: A worker cleans parts of the Samsung exhibition stand at the International Funkaustellung consumer electronics fair in Berlin, 27 August 2008. REUTERS/Fabrizio Bensch)

Hulu is going global. Maybe.

The video website owned by News Corp and NBC Universal is apparently thinking of expanding to Britain, France, Germany and Japan. But don’t get too excited. Peter Smith, president of NBC Universal International, told a conference that while Hulu would love to push out its boundaries, there aren’t yet any concrete plans.

He didn’t say this, but it seems that given what’s happening with the global economy, this may not be the best time to expand a service that depends on advertising revenue. Speaking of which…

The Financial Times has a story out today that suggests Hulu could match Google’s YouTube in US revenue next year. The article cites Screen Digest, and certainly other researchers may disagree. Still, it’s interesting that Screen Digest figures both online video cites will bring in about $180 million. Should we interpret this as a Hulu success? Or a YouTube failure?

Keep an eye on:

• General Electric may be interested in buying more media assets (FT.com)
• TV broadcast networks are now cutting development costs in the face of perhaps the most challenging economic environment the TV industry has ever experienced (NY Post)
• Has Rupert Murdoch, who oversees the News Corp media empire, gone soft on liberals? (NY Times)

There’s a little something for everybody in the media industry in Frank N. Magid Associates’ annual study of user/viewer/reader behavior. We got a look at some of the findings and took especial note of stats on online video usage, research sponsored by video sharing site Metacafe.

Boiled down, YouTube is still king of online video watching, according to nearly 2,000 web users aged 12 to 64 surveyed by Magid Associates. But as online video becomes a part of our daily routine, corroding wholesome activities like watching TV and going to the movies, there should be plenty more room for sites like rival Metacafe or slick Hulu.

Here’s some of the data on the overarching trends. Magid managing director Mike Vorhaus attributes them to a growing appetite for “snack-sized content.” Now try to make some money off it:

* Half of those surveyed watch some type of online video weekly, more than 10 percent watch it daily.

* More male users aged 12 to 24 say they expect to watch online video more often in the next year.

* Comedy and music videos are the most commonly viewed web video content. News stories rank fourth, full-length movies come in 10th.

* More than 40 percent of online video viewers say they’d rather watch video content on their nice TV sets rather than a PC screen.

* 30 percent believe the Internet is the future of video viewing and 28 percent say they watch less TV because of their web video habits. 44 percent say they consider ads within online video clips as similar to ads in TV shows.

(Photo of prisoners in Manila dancing during an exercise program, an act made famous by a video circulated online. Reuters)

In one of the busiest weeks for network TV executives, NBCU’s Jeff Zucker nonetheless stopped by an Avenue A/Razorfish event for a question-and-answer session with the ad company’s vice president of media & entertainment, Domenic Venuto.

Not surprisingly, given it is upfront week, one of the first questions put to Zucker centered on his media company’s rather untraditional upfront.

(A quick refresher: NBC unveiled its lineup for 2008-09 last month, and Monday skipped its usual splashy upfront presentation at Radio City in favor of what it called the NBCU Experience over at 30 Rockefeller Center. For more details click here). 

Zucker said that while the Experience wasn’t perfect, it was certainly a success and accomplished what he had hoped, namely showing off the company’s businesses beyond the NBC network.

“I feel very, very good about how we did on Monday,” said Zucker, before joking that it was unlikely someone would roast the event to his face.

“Nobody ever wants to tell me the truth,” he cracked. “On Monday, what most people said, and many were probably drunk, is thanks and congratulations on doing something different.”

“But, really, the feedback was really positive,” he told the crowd.

He said the same thing on another topic: the reaction to video sharing site Hulu. 

“The user experience is fantastic,” he said. “That has been the No. 1 goal.”

But success comes at some cost, Zucker said.

“Frankly, all of our internal sites have a lot to learn from what Hulu has done.”

(Photo: Reuters)

NBCU is not for sale. Got that?GE Chairman Jeff Immelt plans to put to bed persistent rumors that the industrial conglomerate is considering courting buyers for its broadcast, cable and movies division after the Beijing Olympics, according to the New York Times, citing Immelt’s note to GE investors in its annual report that will be filed on Wednesday.NYT quotes from the letter:“Should we sell NBCU? The answer is no!”"I just don’t see it happening. Not before the Olympics, not after the Olympics. It doesn’t make sense.”Immelt tells investors NBCU earnings are also expected to jump 10 percent this year.Speculation gathered steam last October after the Financial Times reported about Immelt considering NBCU’s fate only after the Olympics in August, citing unnamed sources. That set the chatter mill abuzz with scenario-spinning with potential suitors for pieces, if not the whole.But who really wants a broadcast network — and who doesn’t already have one — these days?(NYTimes)Keep an eye on:

• Hulu launches, finally. (Reuters)
• Spitzer, from all angles. (HuffPost)
• Disney sees $1 billion from online content revenue in 2008, up from $700 million in 2007. (paidContent)
• AOL replaces head of Platform A after just seven months. (NYPost)

(Photo: Reuters)