In a blog post, CEO Jason Kilar blames the shortfall on a “soft advertising market (economy) in the second half of 2011.”

The numbers: Hulu did $420 million last year, via a combination of ad sales and revenue from its Hulu Plus subscription service. But during the first half of 2011, it had told the world — several times — that it was “on pace to approach” $500 million.

In retrospect, it’s easy to see when sales started softening. In July, when Kilar reported his company’s Q2 numbers, he was still offering the same $500 million revenue guidance. But in early October, when he reported Q3 numbers, the guidance had disappeared from his update.

There are a whole lot of people who would like to report 60 percent annual growth. And the fact that Hulu revenue missed earlier projections by 16 percent  – “overall the Hulu ad business grew aggressively and Hulu Plus materially exceeded our plan,” Kilar notes in his post — isn’t going to be the biggest issue for the service by a long shot.

Hulu’s management and its owners — Providence Equity, Comcast, Disney and News Corp. — need to reach a fundamental agreement about the video site’s direction, and how the site fits into today’s entertainment landscape. (News Corp. also owns this Web site.)

But it’s still worth noting the miss, because Hulu is both a digital ad business and a digital ad business that sells very premium video.

It’s an article of faith among digital ad bulls that the industry will keep growing even if the larger economy takes a hit, because ad dollars will shift from old media, anyway. And advertisers are supposed to be clamoring for the tv shows and movies that Hulu sells — which is one of the reasons Google is trying to shift upmarket from dogs on skateboards, with its “channels” strategy.

We’ll start hearing other reports on the state of last fall’s ad market, and the outlook for the future, over the next couple weeks, when public companies start reporting their Q4 numbers.

And we’ll hear a lot more from Kilar himself, who will be appearing at our D: Dive into Media conference at the end of this month. If you want to see him in person, grab a seat.

There are a whole lot of people who want to be in that game, and Blair Harrison is one of them. His Frequency, which launched last year, has gone through an overhaul, but its gist remains the same: It wants to let you pick and choose feeds of stuff you know you like. It wants to show you stuff your friends like, too, by incorporating cues from your social networks.

Harrison, who made his money and reputation building iFilm and selling it to Viacom during the beginning of the Web 1.0 boom, raised $3 million last year, and since then has rounded up another $1 million.

More important, his new Web site is slicker, and now features a dashboard that you can program with feeds you select, along with ones that use suggestions from Facebook, Twitter, et al. And the service now offers an iPad version, as well as one that will be featured on some Samsung TVs. Here’s what it should look like on the big screen:

Harrison’s challenges also remain the same: He needs to convince people that they should use a Web video hub, period. Facebook already does a great job of surfacing cool videos my friends think I should see (thanks for the Wilco clip, everyone), and Twitter is getting better at it.

And if I am inclined to use a Web video hub, chances are I’m already doing it via Google, at YouTube.

Google is particularly interesting for Harrison, since it’s both competition and de facto partner. YouTube is in the process of dividing itself up into niche channels that will work particularly well with Frequency’s new scheme — if you like the indie music that myISH serves up on YouTube, it should be easy to bring that feed right into Frequency.

But Google would very much like to be the program guide for Web video, too, via Google TV. That means, for instance, that some Samsung models will feature Frequency, and others will feature the one from the giant company with enormous resources. Tough fight.

Harrison isn’t asking consumers to fund his fight, either. The Web sites and apps are free, and the only ads that show up on the videos are the ones that the original distributors add in there, so right now Frequency is revenue-free.

Harrison says he needs to build scale and can figure it out later, but there are some obvious sponsorship/customization routes that he can try, just like Flipboard is trying out with magazines for its Web app reader. In fact, if you said that Harrison was trying to build Flipboard for Web video, he wouldn’t stop you.

Anyway! No point in writing about Web video without showing Web video. Here are a couple of clips Frequency tells me my friends think I would like:

Now-65-year-old David Bowie, from way back in 1973, via Facebook:

And, for whatever reason, a weather balloon, via Twitter:

The deal will also give Comcast customers more ways to watch those shows, including the ability to stream some of the programs live, on the go, on laptops, iPhones and iPads.

I’ve published the full press release below, but here are some of the quick takeaways:

THE WALT DISNEY COMPANY AND COMCAST CORPORATION ANNOUNCE A LONG-TERM, COMPREHENSIVE DISTRIBUTION AGREEMENT THAT ADVANCES THE SUCCESSFUL MULTICHANNEL BUSINESS MODEL

DEAL PROVIDES XFINITY TV CUSTOMERS BROAD ACCESS TO TOP SPORTS, NEWS AND ENTERTAINMENT CONTENT ACROSS MULTIPLE SCREENS IN AND OUT OF THE HOME

PHILADELPHIA AND BURBANK –– JANUARY 4, 2012 –– Comcast Corporation (Nasdaq: CMCSA, CMCSK) and The Walt Disney Company (NYSE: DIS) today announced a long-term, comprehensive distribution agreement that will deliver Disney’s top quality sports, news and entertainment content to Comcast’s Xfinity TV customers into the next decade on television, online, on tablets and handheld devices. The new agreement enhances the multichannel business model and supports the companies’ mutual goal to deliver the best video content to customers across multiple platforms using the latest technology and cloud innovation. For the first time ever, Comcast’s Xfinity TV customers will be able to watch ESPN, ABC or Disney shows live or on demand and across multiple screens. The companies also agreed to collaborate over the term of the deal to create new, innovative viewing experiences for Xfinity TV customers.

The networks and services covered by the agreement include: ABC, ABC Family, Disney Channel, Disney XD, ESPN, ESPN2, ESPNU, ESPN Deportes, ESPNEWS, ESPN Classic, ESPN Goal Line, ESPN Buzzer Beater, ESPN 3D, ESPN GamePlan, ESPN FullCourt and ESPN3; retransmission consent for seven ABC-owned broadcast television stations (WABC-TV New York, WLS-TV Chicago, WPVI-TV Philadelphia, KGO-TV San Francisco, KTRK-TV Houston, KTVD-TV Raleigh-Durham, and KFSN-TV Fresno) as well as more than 10 high-definition networks. Additionally, Comcast will launch Disney Junior, a new 24-hour basic channel for preschool-age children, parents and caregivers. Comcast will also provide its Xfinity TV customers with broad access to a suite of live Disney networks on an authenticated basis and expanded Xfinity On Demand content through Disney’s comprehensive TV+ initiative. In total, 70 services are covered by the broad scope of this new agreement. License fee schedules for different services under the deal will be phased in over time.

“Comcast was the first video provider to create technology that enabled us to deliver content to customers where and when they want it across any viewing experience,” said Neil Smit, President and Chief Executive Officer, Comcast Cable. “We are very pleased to have reached this unprecedented and innovative, long-term agreement with Disney which embraces the future of entertainment and allows Comcast to continue to bring our vision of TV Everywhere to Xfinity customers whether at home or on the go.”

Anne Sweeney, Co-Chairman, Disney Media Networks and President, Disney/ABC Television Group, added, “This landmark deal is a great example of what can be achieved when programmers and distributors collaborate and innovate together to meet the ever-evolving needs of consumers and enhance the viewing experience. By combining the best news, sports and entertainment content available today with cutting-edge technologies, we’re able to fully realize our comprehensive TV+ initiative, and introduce a brand new suite of authenticated services to Comcast subscribers.”

Added George Bodenheimer, Executive Chairman, ESPN, Inc., “Given the scope of assets Comcast and Disney/ABC/ESPN are making available to consumers, this agreement is unprecedented in our industry. It reinforces the value of the multichannel subscription and takes full advantage of new technologies, which serve all of our viewers.”

The extensive and expanded rights package for Comcast’s Xfinity TV customers includes rights across multiple platforms for:

· Comcast’s Xfinity TV customers will receive more ABC, ABC Family, Disney and ESPN content through their set-top-box and, at this time, Disney and ESPN content online, including:

o ABC On Demand, ABC’s fast-forward-disabled On Demand service, which currently features a selection of top-rated primetime entertainment programming, including episodes of such popular current ABC shows as “Castle,” “Grey’s Anatomy,” “Once Upon A Time,” “Private Practice” and “Revenge.” Full current seasons will be made available on a number of shows. Additionally, Xfinity TV customers will have access to a variety of ABC News programming as well as some local ABC owned-station content.

o ABC Family On Demand, which features a variety of top-rated full episodes, refreshed monthly, from such popular millennial favorites as “The Secret Life of the American Teenager,” “Switched at Birth,” and “Melissa & Joey.” Full current seasons will be made available on a number of shows. ABC Family original movies like “12 Dates of Christmas” will also be available.
o Disney-branded On Demand offerings, including Disney Channel On Demand, Disney Junior On Demand, and Disney XD On Demand. Refreshed each month, the Disney Channel On Demand offering will include episodes from such series as “Handy Manny,” “Mickey Mouse Clubhouse,” and “Jake and the Never Land Pirates” for preschoolers, as well as variety of episodes from “A.N.T. Farm,” “Good Luck Charlie,” “Wizards of Waverly Place,” and other popular series for older kids. Select episodes featured on Disney Channel On Demand will be available in innovative new offerings, such as playlists and monthly programming blocks, in addition to a number of episodes available in multiple languages. Disney Channel Original Movies such as “Lemonade Mouth,” “Geek Charming” and “Phineas and Ferb: Across the Second Dimension” will also be available. Disney XD On Demand features a variety of episodes from such series as the Emmy Award-winning animated hit “Phineas and Ferb.”
o Disney Channel’s subscription Video On Demand service, which offers on demand access to select episodes before they air, will now be available to Xfinity TV customers who receive Disney Channel, a service that Comcast will offer to these customers for no additional fee.
o Expanded on demand content from ESPN, including content from ESPN Deportes and ESPN’s award-winning original content from ESPN Films.
o The subscription On Demand service “Disney Family Movies,” which features a selection of classic and contemporary feature films and animated shorts from The Walt Disney Studios.
Xfinity TV customers will receive broad access to existing authenticated products like WatchESPN, as well as upcoming authenticated products, including WatchDisneyChannel, WatchDisneyXD and WatchDisneyJunior. These services will give Comcast’s Xfinity TV customers more opportunities to access live and video on demand content, both in-home and out-of-home, on their computers, smartphones, tablets and gaming consoles.
Xfinity TV customers will also receive the recently announced Disney Junior, a new 24-hour basic channel for children ages 2-7, parents and caregivers. Upon its debut in 2012, the new channel will feature animated and live action programming that blends Disney’s unparalleled storytelling and beloved characters with learning, including early math, language skills, healthy eating and lifestyles, and social skills.
Comcast also obtained rights to air certain content from ESPN3, ESPN FullCourt and ESPN GamePlan on Comcast’s Xfinity Sports Entertainment Package.

Notice I said “TV industry.”

Most observers and analysts believe that Siri’s voice commands could eliminate the need for those clunky TV remote controls. With the blurring and exponential proliferation of television and Web content, telling your TV what you’d like to watch, instead of scrolling through a nearly infinite number of program possibilities, makes a lot more sense.

But from my perspective, Siri’s greatest impact won’t ultimately be on users, or on device manufacturers (though they certainly risk losing market share to Apple). It will be on the TV industry’s content creators and packagers. Why? Because a voice-controlled television interface will fundamentally disrupt the six-decade-old legacy structure of networks, channels and programs. And that’s a legacy that — until now, at least — has been carried forward from analog to digital.

There’s an important underlying precedent here.

If the Internet can be generalized to have one effect across every industry that moves online, that effect would be disaggregation. Choices go from finite to infinite. Navigation goes from sequential to random access. And audiences choose content by the item far more than by the collection. We’ve gone from the packaged and channelized to the unbound and itemized. Autonomous albums are fragmented into songs; series into clips; and magazines and newspapers into articles and individual photos.

As much as we may think that has already happened with video, it is nothing compared to the great leveling that will occur in the voice-controlled living room. Voice-controlled TV means direct navigation to individual episodes, programs and clips. And it will almost certainly lead to a discernible deconstruction of the network and channel structure — not to mention the decomposition of even the aggregated marketplaces like Netflix, Hulu and YouTube.

Here’s the simple reason: No one is going to sit on their couch and say, “Siri, show me NBC’s ‘Community.’” In a voice-activated world, monikers like “NBC” become useless. They don’t stand for anything meaningful to the consumer. They’re just remnants of a decrepit channel structure that’s unraveling. And, in the end, they’ll simply connote the fast-fading allure of mid-20th century mass appeal.

To be sure, the TV majors will lose much of their ability to realize network effects. Already, you’re hearing less about “lead in” and “lead out.” What you are hearing more about, however, is disconnected videos. A program on YouTube, for instance, will sit on a level voice-controlled playing field with an NBC show, and that field will soon become even more level, because Siri will eliminate the menus that structure the artificial hierarchies of content collections.

So how will we be able to get network effects back in video? Let’s look at four possible ways:

• Branded Content — Players can build a strong brand that stands for something with their audiences. Break.com, Discovery and Oprah are all meaningful and build long-term customer loyalty. (“Siri, show me new TED Talks.”)
• Curation — Brand the collection with a curation strategy so that the curator’s name and stamp of approval means something to the audience. (“Siri, show me Jason Hirschhorn’s latest movie suggestions.”)
• Social — In the fully social world that we expect to see, focusing on the virality of content means you tap the human distribution network and social operating system. (“Siri, show me what videos my friends are watching.”)
• Personal — We’ve already seen the extraordinary value of well-tuned personalized recommendations, with Netflix’s notable prize and other famed stories of the benefits of great recommendations. Increasingly, our own patterns of individual videos and the brands we affiliate with, along with recommendations from friends, will be combined into personalized recommendations we won’t even have to ask for. I have no doubt that Siri will be as good a “Genius” as iTunes is at recommending what else to watch. Ultimately, in the age of data, whoever knows the most about us will be able to give us the best experience.

Beyond disaggregation, personalization is ultimately the most powerful consumer value of digital media. My mother’s TV experience was to walk over to her TV set and turn a dial to select among three channels to satisfy her individuality. But in the next generation, no two people will receive the same recommendations from the millions of content choices available.

Before he died, Jobs now famously told Walter Isaacson, his biographer, that he had finally cracked the TV code. It’s unclear what Jobs meant, what this entailed or what he thought it would lead to in the years to come. So, barring further posthumous disclosure, Jobs’s own predictions of his ripple effects will be a media mystery for now.

One thing that’s clear, though, is that Jobs’s Siri will start the dismantling — or creative destruction — of the TV industry as we’ve known it for the last 60 years.

This post originally stated that Siri was unveiled the day after Steve Jobs passed away. It’s been corrected to reflect that the announcement actually occurred the day before.

Ben Elowitz (@elowitz) is co-founder and CEO of Wetpaint, a next-generation media company that is reinventing the media model on the social web. Ben is also author of Digital Quarters, a blog about the future of digital media. Prior to Wetpaint, Elowitz co-founded Blue Nile (NILE).

The change comes as YouTube beefs up its offerings to compete with broadcast and cable television, complete with original, professionally produced videos. Last month YouTube announced the creation of around 100 online video channels, featuring original programming from A-List talent such as Madonna, Jay-Z and actor Ashton Kutcher.

Read the rest of this post on the original site »

Google won’t comment on his promotion, and people I’ve talked to who know about the site’s org chart aren’t sure whether it’s formally considered a promotion. But here’s the gist: Kyncl, who used to report to Global Head of Content Dean Gilbert, now reports directly to YouTube CEO Salar Kamangar. Chris Maxcy, who handles music partnerships and deals like Google’s linkup with Vevo, now reports to Kyncl instead of Gilbert.

Gilbert is still onboard, but I’m told his role is now more “operationally focused.”

Meanwhile, for a quick summary of what Kyncl has been up to over the last 12 months, see last month’s rollout of YouTube’s “channels” strategy, or today’s Disney tie-up.

That number is in line with some of DiClemente’s peers, but it’s still notable for two reasons:

• If it’s true, it means the video site’s revenue has now synced up with the price Google paid for it five years ago.
• Much more important, by DiClemente’s estimate, it means YouTube commands a staggering 80 percent of Web video revenues — he figures the whole market is worth $2 billion.

It’s possible that DiClemente’s numbers are a bit off. Hulu has said it will do more than $500 million in 2011, with the majority of that coming from advertising. So if both of those numbers are accurate it would mean that there was essentially no other video ad spending anywhere in the world in 2011, which seems like a bit of a stretch.

[UPDATE: Barclays analyst Perry Gold clarifies that the $1.6 billion YouTube estimate is a global number, but the $2 billion figure is its estimate for the U.S. market video market. Gold suggests that the global video market may be $2.5 billion to $3 billion, which would make the math a little easier to digest. But the other wildcard here, as some readers have noted, is that YouTube's revenues come from both video ads and display advertising, which means we're not comparing apples to apples.]

Still, point taken: YouTube is finally a big business that makes serious money. Perhaps it’s even profitable!

And if that’s the case, why is it pressing ahead with this Hollywood/“channels” strategy?

The big idea behind that one, after all, is to create stuff that advertisers will be happy to pay a premium for. But if YouTube is already generating $1.6 billion a year for non-premium stuff, why bother?

One possible answer: The channel strategy is a big focus for YouTube, but it doesn’t mean the site is abandoning what’s already working.

And while people who type stuff like to mention the $100 million YouTube is investing in the project (guilty!), bear in mind that the number is almost meaningless to Google. In fact, Google has already spent close to double that in the first nine months of this year — $173 million — on “content acquisition costs … primarily related to content displayed on YouTube,” and I’m reasonably sure that number doesn’t include the channel deals, most of which were only recently finalized.

So while the channels plan may augur Google’s intention to “take on TV” and “disrupt cable” and other storm-the-barricades metaphors, right now it’s just a toe-touch for YouTube head Salar Kamangar and his team. Turns out that what they’re already doing could be working just fine.

The Google-owned site is getting closer to finding out.

The video giant is finalizing contracts for its first of more than a dozen “channels” featuring regularly scheduled content on big broad themes such as fashion and sports, according to people familiar with the matter.

Read the rest of this post on the original site »

The company is planning changes to the homepage that would highlight sets of channels around topics such as arts and sports. YouTube is looking to introduce 20 or so “premium channels” that would feature five to 10 hours of professionally-produced original programming a week, one of these people said. Additional channels would be assembled from content already on the site.

Read the rest of this post on the original site »

IntoNow users can “check in” to a particular episode once it’s been recognized, like one would check into a restaurant on Foursquare. The goal is to enable conversations around the watercooler and on social networks by helping users connect around what they’re watching and discover new things to watch.

It’s common knowledge that the only thing people love more than watching TV is talking about it, but none of the many “social TV” start-ups–GetGlue, Miso, Philo, Comcast’s Tunerfish etc.–has emerged as a clear leader. Unlike the competition, IntoNow isn’t trying to provide a platform for conversations, but rather to show what people are watching.

Still, it’s not clear people want to download an app to tell themselves and their friends what they’re already watching on television.

IntoNow can recognize both live television and five years of archived U.S. TV airings. It constantly analyzes satellite feeds and matches them to TV listings to have current data.

Adam Cahan, the CEO of IntoNow, says his company’s TV recognition technology–which it calls SoundPrint–is akin to a GPS, which takes the hassle out of figuring out exactly which restaurant you’re at and matching it to something like Foursquare’s database.

Cahan’s company was very recently spun out of Auditude, a company where Cahan was also CEO. IntoNow’s seven employees and its technology were all formerly part of Auditude, actually. That company, which just raised $11 million from investors including Greylock Partners and Redpoint Ventures, has shifted away from video identification to video advertising management. IntoNow has yet to raise its own funding, but Greylock and Redpoint already have equity in the start-up.

In addition to creating a feed of what episodes they’re watching, IntoNow users can share on Facebook and Twitter, look up programs on IMDb, add shows to their Netflix queues and purchase episodes on iTunes.

The name “IntoNow” comes from the expression “What are you into now?” IntoNow hopes other companies will build SoundPrint audio recognition into their own social TV products. SoundPrint has 2.6 million airings in its catalog, is constantly recording 130 channels and needs four to 12 seconds of audio to make a match.

While it’s only iOS for now, IntoNow and SoundPrint are in development for Android and Web-enabled televisions.

IntoNow eventually hopes to help content owners validate that their watchers are participating with live content, and help the TV industry measure advertising and viewership metrics without relying on a panel.

At a very first glance, some of the new rules imposed by the feds might seem like they require the new company to offer up programming to any online player that wants to pay up.

And technically, they do. But the new rules have plenty of conditions and limits. So the bottom line is you’re not much more likely to get access to “30 Rock” via YouTube, or CNBC via iTunes, then you were before.

The new FCC and DOJ rules do give, say, Google the ability to buy access to some of NBC U shows or channels. But it would require Comcast’s competitors to do the same thing, first.

That is: Unless the people who are reluctant to put their stuff online because they don’t want to upset Comcast go ahead and put their stuff online, Comcast doesn’t have to, either. So it’s theoretically possible, but not probable.

And if it happens, it will happen haltingly. If Viacom sells someone online access to its MTV lineup of reality shows, that might require Comcast to offer up its reality show lineup on Bravo. But it wouldn’t entitle an online outlet to the police procedurals on USA.

The government also gives the option to, say, Netflix, to set up shop as another cable operator, and buy access to all of NBC Universal’s programming. But it would have to buy all of it–just like Time Warner Cable and Cablevision do when they make a carriage deal for NBC U’s shows.

And again, Comcast wouldn’t have to do that unless its peers did. Which means that if Netflix really wanted to set up shop as a direct competitor of the cable guys, it can do so. But it would have to operate exactly like the cable guys, just like the satellite guys did when they entered the market a couple of decades ago.

So if Netflix, or Apple or whoever really wants to offer a full suite of cable programming, at cable prices, it could. But that would be very, very expensive: Analyst Rich Greenfield estimates that the bill for NBC U’s programming alone would run a new entrant $1 billion a year.

Just as, or even more, important, is that those kind of bundled, take-it-or-leave-it deals are exactly the kind of thing that the cord-cutting crowd complains about.

They don’t want to have to pay for USA and Bravo and Syfy and MSNBC–they want to pick and choose channels, or shows. And pay a lot less.

“I don’t think cord-cutting was a major focus” of negotiations, Comcast EVP David Cohen said during a press conference this afternoon. And that may be true!

But the net result reads very much as if Comcast wanted to make sure the government didn’t force it to break its business model. And if that was the case, it got what it wanted.

“We’re pleased to announce that we’ve agreed to acquire Widevine,” the company said in a post to its blog. “The Widevine team has worked to provide a better video delivery experience for businesses of all kinds: from the studios that create your favorite shows and movies, to the cable systems and channels that broadcast them online and on TV, to the hardware manufacturers that let you watch that content on a variety of devices. By forging partnerships across the entire ecosystem, Widevine has made on demand services more efficient and secure for media companies, and ultimately more available and convenient for users.”

For Google, which ramped up its video efforts with the launch of Google TV last month, the acquisition is an important one for bolstering its streaming video offerings. The Seattle-based Widevine specializes in digital video optimization and digital rights management, and its services are used by everyone from Netflix and NBC.com to AT&T.

Interesting to see Google snapping up a video DRM company (Widevine did Flash DRM before Adobe), considering its purchase of On2 last year and its subsequent release of On2′s VP8 video codec as an open standard (something that did not go over well at MPEG-LA, the consortium that controls the AVC/H.264 video standard).

Today, well, not so much.

For those who have already forgotten what the smartbook even was, the idea was to have a low-cost device that looked a lot like a netbook, but offered far better battery life and instant-on capabilities.

But once Apple released the iPad, everyone started focusing on tablet devices rather than on little notebooks.

“Obviously, tablets are the flavor of the day,” Jacobs said in an interview on Tuesday, ahead of his panel discussion at the Churchill Club.

The good news for Qualcomm, Jacobs said, is that the tablet requirements are basically the same as those for a smartbook.

“We probably did ourselves a little bit of a disservice by using [the term] smartbooks because people then thought notebooks and therefore it was a clamshell form factor,” he said. “We always thought about them not in terms of form factor but in terms of what they did, meaning always on, instant on, always connected, always downloading–the tablet designs that are out are doing that.”

Jacobs said we will probably see some devices with a physical keyboard, but said that next year we’ll continue to see far more slates than clamshells. The same, he notes, is also holding true for the phone.

“Keyboards on smartphones have become less and less evident for most of them,” he said.

For its part, Qualcomm is working on making its processors faster and more power efficient. A dual-core chip, due in the first half of the year, will offer five times as much performance or provide the same oomph as the current chips while using only a quarter as much power.

Since Jacobs has a good view of all the various devices coming to the market, I asked him whether he thinks that a couple of years from now we will still see five or six competing smartphone operating systems.

“A couple years from now I think we will,” he said. “Five to 10 years from now, I think there will probably be some winners and some losers although it’s pretty hard to say who those are going to be because different companies bring different things to the table.”

The carriers will bring some pressure, he said, given they have to provide support and shelf space to all the different operating systems. However, he also said it’s likely that some alternate channels will emerge beyond just sales from the carriers.

“It’s hard to put a time frame on when more consolidation will happen,” he said. “I think right now we are in a period of expansion. You are going to see more stuff….Everybody is chasing [Google] Android and Apple right now, but I think there’s room for a lot of diversity, at least in the near term.”

The deal is the latest in a string of pacts that are fast transforming Netflix into a true Web-based movie channel. With streaming rights to films from Paramount, Lionsgate, Sony, Disney and MGM studios, and a new streaming-only service priced at $7.99 a month, the company is increasingly becoming more competitive with the cable incumbents.

But if that’s the case, how are you going to decide what to watch? The world of Internet video is exponentially bigger than the 500-channel universe you already have, and usually ignore, via your cable box. Who’s going to help you navigate that?

Lots of people, it turns out. In fact, that’s one of the most popular ways to attack the Web video business: Try to create what will turn out to be the Web’s version of TV Guide, and make money by selling content or advertising once you’re big enough.

That’s really what Boxee is up to, if it can get scale. Ditto for Clicker. And Google TV and Apple TV, really. And really, if you think about it, that’s what Hulu would like to do, if Jason Kilar could get his way. Etc.

Here’s yet one more competitor: Shufflr, a newish start-up run by Bangalore-based Althea Systems. Althea has rounded up $3 million via a Series A round from Intel Capital, and is using the money to build out its product, a browser that works on laptops and, soon, phones running Google’s Android platform.*

Shufflr’s pitch is pretty simple: They sort through lots of video feeds–from everyone from YouTube to Comedy Central to Blip.TV–and offer up suggestions about what you’d like to see.

They’re based in part on what you’ve said you like on Twitter and Facebook, and in part on what your friends have said they like, by forwarding a link. And Shufflr plays the video for you–using the original distributors embedded advertising–on its own player.

It’s an interesting concept, but the problem with all of these machine-based recommendation engines is that they’re more clumsy than you’d like.

Shufflr, for instance, can figure out that I like “comedy,” but then it spits up everything that anyone has ever thought is funny. And there’s a whole lot of not-funny stuff there. At least in my humble opinion.

I think that’s not that much of a problem when you’re sitting on a laptop, idling for a few minutes between meetings and just want to watch…something. If you don’t like it, you flip away very, very quickly

But on your couch, which is the use case Shufflr is pushing here, I think your standards are higher. Or different, at least: I’m happy to flip through dud channels on my own, but if some software suggested stuff that I didn’t want to see, I’m not sure I’d stick with it very long.

And I’m sure that, statistically, I’m much more likely to enjoy something that one of my Facebook friends likes, or that someone I follow Twittered about. But that’s a very big group, and the truth is, I probably only care what a very small number of them say about what to watch on the Web. (I’m still angry at Clicker CEO Jim Lanzone, for instance, for raving about “Kick-Ass,” which I ended up renting on VOD. You owe me $4.99, dude.)

But that’s the problem that most recommendation sites and engines have, no matter what the topic is: You really don’t care what everyone you know says about everything–you care what a few people say about something very particular.

In any case, Shufflr is less than a year old, so they’ve got a bit of time to get better. But they’d best do it quickly: Plenty of other folks are trying to crack the same code.

Here’s a demo video, followed by a video Q&A I did with co-founder Rajnish (that’s his full name):

Shufflr – A Social Video Browser from Shufflr on Vimeo.