The problem with that plan: The cable guy already controls your living room. He’s not leaving anytime soon.

So, despite what you may have read yesterday, the new Xbox One isn’t TV’s future, today.

If you squint at it, you can imagine that Xbox One can help Microsoft dislodge the cable guy one day. But, for now, Microsoft is simply trying to take up a little more space. More precisely: Its box won’t let you watch live TV unless you have a pay TV subscription.

This shouldn’t be a surprise, as Microsoft has already signaled for some time that it wants to work with the pay TV guys, not boot them out.

Its previous forays into moving TV to the Xbox, via deals with programmers like ESPN and HBO, have only worked for customers who already had pay TV. And while Microsoft has previously mulled creating its own TV service, it has shelved the idea, and insists that it doesn’t want to build a pay TV competitor.

Related: With the exception of Intel, every big outsider that has approached the TV Industrial Complex has reached the same conclusion. Which is why Google Fiber TV looks just like regular cable TV, and why Apple TV has yet to do much more than play Netflix and iTunes.

And Microsoft will be literally tied to cable. In order to get the TV part of Xbox One to work, you’ll end up plugging it into your existing cable box, and performing what the industry calls an “HDMI pass-through.”

[CORRECTION: An earlier version of this story incorrectly reported that Xbox One owners would need an additional piece of hardware to connect their machines with their set-top boxes.]

In essence, Xbox One is acting as a sort of custom remote for your cable box, which will let you change the channel; it is also creating its own programming guide so you can see what’s on TV.

But note that Xbox One won’t give you full control of the set-top box — you won’t have access to the DVR your cable company provides, or any video-on-demand features they offer. If you want to do any of that, you’ll have to switch inputs, and go back to the cable guy’s system.

[UPDATE: As All Things D reader "Taz" notes, Comcast, the country's biggest pay TV company, already provides Xbox 360 users to their video on demand service via an app, and suggests that the company could do the same with the Xbox One. That's true, but so far the two companies don't have an agreement in place.]

And beyond the technical arrangements, Microsoft is being as explicit as it can about the goodwill it has toward the cable guys. While the company’s marketing says its box can do everything, Microsoft’s official communications and fine print make it clear that it can’t do squat — TV-wise — without the TV Industrial Complex.

Here, for instance, is a response I got from a Microsoft PR rep when I asked about the Xbox One’s program guide, and whether they needed permission from the cable guys to build it:

“Information that appears in the OneGuide has been created and licensed by Xbox, and works in conjunction with video services that consumers subscribe to from cable and satellite companies. We value our partnerships with MVPDs (pay TV operators), and our vision is for Xbox One to work in tandem with MVPDs’ services and offer a unique and interactive experience on top of your favorite entertainment.”

Got that? “In conjunction” … “in tandem” … “on top of.” Pretty clear.

What is interesting is that, as far as I can tell, Microsoft hasn’t gotten the explicit blessing from all of the pay TV services to launch the Xbox One. It seems to have told some, but not all, of the TV guys about it in advance, but in any case doesn’t think it needs their permission.

In an interview with my colleague Eric Johnson on Tuesday, Microsoft entertainment boss Yusuf Mehdi said Microsoft would be reaching out to the TV guys to get additional features, like DVR recording and playback. And if Microsoft continues with that kind of tight partnership, then the cable guys won’t be leaving your house for a long time.

That said, if Xbox One really does become the primary way you watch video programming — not just live TV but video, period — then it’s possible to imagine a scenario where Microsoft, with an improved bargaining position, starts trying to push the cable guys closer to the door.

Don’t count on it happening any time soon, though. Those dudes are hard to move.

Hulu’s owners, including Walt Disney Co., News Corp., and Comcast Corp., are considering various strategic options for the site including a sale. Other firms that have bid or expressed interest in Hulu include cable operator Time Warner Cable Inc., Guggenheim Partners, Yahoo Inc. and former News Corp. president Peter Chernin’s investment group.

Read the rest of this post on the original site »

ESPN, which is majority-owned by Walt Disney Co., plans to show video-highlight clips on Twitter of major sports events in the coming year, including from soccer matches leading up to the World Cup, college football and the X Games extreme-sports tournaments. People can watch the video clips on Twitter’s website and mobile apps shortly after the action happens on TV.

The sports network plans to sell ads that will run inside the video clips, and marketing sponsors will commit to buying from Twitter a minimum value of “promoted”—or paid—Twitter posts to circulate their marketing pitches.

Read the rest of this post on the original site »

Netflix is adding “Jake and the Never Land Pirates” and “Tron: Uprising” today; later this month they will be joined by “Handy Manny,” “Special Agent Oso” and “JoJo’s Circus.” As with all of Netflix’s TV deals, this is a catalog pact, which means the service won’t get its hands on shows until after they’ve aired at least once on regular TV.

Netflix has had other deals with Disney for many years, and late last year announced its most significant one, which will bring the company’s most prominent movies, including its Pixar films and its “Star Wars” sequels, to the service. So there’s nothing dramatically different here.

What is of interest is the timing of the deal: It comes as Netflix’s current deal with Viacom, which provides the service with a ton of kids’ programming, is about to expire.

Netflix has already announced that it intends to let the Viacom deal lapse at the end of this month, and wants to replace it with deals for individual shows (just like the Disney deal). Neither company had any comment today on the status of those negotiations. But I’m guessing that Netflix thinks this deal strengthens its hand.

Senator John McCain is going to try, via legislation he is set to introduce soon, perhaps today. McCain’s office has given a sneak preview to some TV industry officials, and while reports about what’s actually in it are still a bit hazy, here are the broad strokes:

• McCain wants to force pay TV operators to break up the programming bundles, by offering channels in smaller groups or on an individual basis.
• He wants to penalize programmers who move their most valuable shows from broadcast networks, which are theoretically free, to paid cable networks.
• He also wants to change the FCC’s rules about sports “blackouts,” which currently prohibit cable channels from carrying NFL games if the local broadcasters don’t air them because the tickets to the games aren’t sold out.

Before you go any further, note that McCain has pushed for similar changes before, without success. And while the Arizona Republican used to be on the Senate Commerce Committee, which oversees the FCC and has a lot of impact on the U.S. media business, he isn’t anymore. So any discussion of what McCain’s bill could mean for TV-land might be completely moot.

That said!

If McCain got his way, and truly forced the TV business to unbundle, you’d see a dramatic shift in the way the industry works. And while you can’t exactly predict how that shift would play out, you can make a couple guesses: Prices for individual networks would increase,  and programming costs would come down.

For instance: Pay TV providers currently pay ESPN, the king of the cable networks, more than $5 per month for each subscriber that gets the service. But, by some accounts, only 25 percent of pay TV customers actually watch ESPN.

So, in an a la carte world, if 75 percent of ESPN’s subscribers melted away, it would need to charge more than $20 per month (wholesale) just to keep its revenue steady. Of course, ESPN is certain to turn around and tell the sports leagues it does business with that it can no longer pay billions to show their games — or at least not as many billions. Imagine that same scenario playing out with all kinds of programming.

As for the broadcast-to-cable component of McCain’s bill, which everyone is describing as “pro Aereo”: Hard to see how McCain would be able to describe exactly which programs, or how much programming, couldn’t move from broadcast to cable.

And as we’ve pointed out before, that’s already been happening for a while, particularly with big-time sports.

So would McCain require Disney to move “Monday Night Football” back to ABC from ESPN? And, in any case, note that threats about the networks moving all their shows from broadcast to cable if Aereo wins all its court battles are just that — threats, which are hard to take seriously. Even News Corp. COO Chase Carey, who first floated that balloon last month, tried to deflate it yesterday during News Corp.’s earnings call. (News Corp. also owns this website.)

According to numerous sources close to the situation, Yahoo CEO Marissa Mayer recently met with top execs at Hulu, the premium video service whose big media company owners have been considering selling it for some months.

Sources said Yahoo is “in the process,” although the Silicon Valley Internet giant has not made any kind of formal bid. Other players whom sources said are considering purchasing all or parts of Hulu include: Former News Corp. COO Peter Chernin, who now has a successful and well-funded multimedia and investment company called the Chernin Group; Guggenheim Partners digital arm, which is led by former Yahoo interim CEO Ross Levinsohn; and Amazon.

Sources said Mayer also had an extensive getting-to-know-you meeting, which was apparently not held at Hulu’s offices in Santa Monica, Calif., along with COO Henrique De Castro. The discussion is taking place in the wake of Yahoo’s failed bid — largely engineered by De Castro — to purchase a majority stake in France Télécom’s Dailymotion video service, after a top French government official said Yahoo could not own 75 percent of the company.

Had the deal — which was reportedly valued at $300 million — gone through, it would have been the most significant by Mayer since she took over at the company last July. Thus far, she has limited her purchases to small mobile startup.

While the meetings with Hulu are only preliminary, Yahoo has been to this video rodeo before, having seriously considering buying Hulu when it was previously being shopped by its owners, News Corp., Disney and Comcast. (News Corp. also owns this site.)

Of course, if Yahoo’s interest becomes more serious, Mayer will have to make important visits to top execs at those media giants, since they control the rights to critical content, and thus Hulu’s value.

As Peter Kafka noted in a previous post about Hulu’s possible sale, “much hinges on the licensing rights News Corp., Disney and Comcast would provide for the money-losing site, as well as what happens to the $300 million debt its owners have taken on in the last year.”

Without those rights, Hulu by itself is a very pretty Web site and video platform, but not worth the billions it would be with very long-term television rights, content that attracts users. Currently, sources said its media owners are offering two to three years of rights, with a lot of flexibility over removing content from the site, which is not quite as attractive a deal (to say the least).

But video is a key component of Yahoo’s strategy going forward. Along with mobile efforts, Mayer has explicitly told investors that video was a key to company under her tenure.

Coincidentally, today in an onstage interview at a Wired conference in New York, Mayer broadly addressed the video issue when asked a question about the topic, noting it was important across all of Yahoo’s properties.

“I think video is really important … video is something that we’re all innately designed and born to experience, everyone is born being able to watch and to hear,” she said. “Video is just this amazing format.”

Mayer would know that well, having been at Google when the search giant bought YouTube, ironically snatching it at the last minute from a competing bid by Yahoo, which was then led by Terry Semel. Since then, YouTube has become the most important and powerful player in the space by far.

Yahoo, despite being one of the largest video players on the Web, has mostly been a lackluster competitor in the arena, pinging over the years from creating original content to doing branded deals with media companies, but never establishing a major beachhead with consumers as Hulu did from scratch.

Short of a full acquisition, there may be a way for Yahoo to partner and invest in Hulu, instead of buying it outright that works for all sides — owners get a new owner to foot part of the bill and also increase distribution, and Yahoo can claim that it’s providing users with exponentially more content that would help Yahoo’s long-declining engagement problem.

Sources said News Corp. and Disney have mulled scenarios where one or both companies hang on to the site, while Comcast has no control over Hulu’s fate, having given up its management rights to the site as a concession to federal regulators.

But the strength of the Hulu brand is clear and it has had some success in building a more significant business. While a lot of its video offerings are free, about four million people are paying for a Hulu Plus subscription.

Still, Hulu’s strength might be lagging, especially given after talented founding leader Jason Kilar recently left. Last year, Hulu was a top 10 video site, according to comScore. No longer — in a report in March, it had dropped out of the top 10.

While this likely has more to do with methodology than real decline in Hulu ratings, it does show that while it’s the biggest thing Yahoo could buy or invest in, Yahoo itself has plenty of video views, many more than Hulu.

The question for Mayer then is how much of Yahoo’s multi-billon-dollar cash kitty she wants to bet on a big video play. She might also be considering buying several smaller ones, said sources, with Yahoo having also looked at some smaller video sites, including Blip and Grab Media.

A spokeswoman for Hulu declined to comment and Yahoo PR has not responded to a query for comment (if ever).

EA ended the quarter with earnings of 55 cents per share on revenue of $1.04 billion, coming in below analysts’ expectations of 58 cents per share but nailing the $1.04 billion consensus.

“As we enter a new fiscal year, EA is well-positioned for dynamic growth on next-generation consoles, PCs, and mobile platforms” EA executive chairman Larry Probst said in a canned statement. “With world-class games, a rapidly growing digital business, and top-notch creative talent, we are excited about EA’s strategy for FY 2014 and beyond.”

Despite the earnings miss, however, the Street reacted positively. Shares of EA were up about seven percent in after-hours trading at $19.70.

It could be the reminder that EA and Disney announced a multi-year agreement yesterday in which EA will develop Star Wars games across multiple platforms.

“Our agreement unlocks a whole new future of Star Wars games that will span consoles, PCs, tablets, mobile, and more,” EA President of Labels Frank Gibeau said in a statement.

Or perhaps it could be the strong performance in mobile markets — particularly with iOS devices, in which the company claims to be the top global publisher in 2013 thus far. The Simpsons: Tapped Out was the company’s strongest mobile performer, generating $50 million in revenue since the game’s launch last August.

Update: More subscriber details and information on titles published by EA.

The holiday was first celebrated in 2011, but the phrase and the date itself has an interesting history — on May 4, 1979, Margaret Thatcher became England’s first woman prime minister, and the Conservative Party placed an ad in the London Evening News that read “May the Fourth Be With You, Maggie. Congratulations.”

The date is also shared by MCA Day, a celebration of the life of Beastie Boy Adam Yauch, who died one year ago today, and by Free Comic Book Day. It is not, however, shared by Star Wars Day for the San Francisco Giants, George Lucas’s hometown team — that’s on September 8.

Below, some of the best memes of the day, plus a Star Wars Day attack ad, paid for by the Emperor’s Committee to Destroy May the Fourth:

So how about Hulu Plus, the subscription service that runs ads in the middle of its TV reruns? Turns out it is doing just fine: Hulu says its paid service now has four million subscribers paying $8 a month.

That’s not nearly as much Netflix, which boast some 30 million subscribers for its ad-free service (also $8 a month). But that seems awfully respectable to me, considering that Hulu Plus has been around (in one form or another) for less than three years.

Maybe even impressive, since much of what Hulu Plus offers are TV shows you can see for free on broadcast TV, or even on “regular” Hulu.com. The main selling point for Hulu Plus, I think, is that you can watch the service on a variety of screens, including phones, tablets and your actual TV, via devices like Apple TV.

The announcement comes as Hulu puts on a show for advertisers in New York, part of the week-long “newfront” presentations the big video websites are hosting. (Yesterday: Yahoo! Tomorrow: YouTube!)

While Hulu is still best known as the place to watch last night’s TV (or in some cases, last week’s TV), it is interested in promoting the stuff it has that you can’t see on TV.

Like Netflix and Amazon, it is investing in its own original programming; unlike Netflix and Amazon, its efforts have gotten much less attention, a fact that steams Hulu’s management team. So if you want to help them out, go ahead and look at the preview reel for “The Awesomes,” an “animated show for adults,” co-created by Seth Meyers of “Saturday Night Live”; it seems to be the new show Hulu is most excited about.

The good news for Andy Forsell, Hulu’s acting CEO, is that advertisers are already receptive to Hulu’s pitches, both for the reruns it airs and the new stuff it is showing. It looks like TV and Hulu is selling it like TV, and many ad guys like that a lot, especially compared to Google’s more … Googley approach with YouTube.

The bad news for Forsell is that he’s acting CEO, because Hulu’s corporate future is completely unsettled. It’s entirely possible, and probably likely, that the site, currently owned by News Corp.,* Disney and Comcast, will have a different ownership structure by the end of the year, and may have a different agenda, as well.

I’m guessing that doesn’t come up during this morning’s presentation. What I don’t know is whether that matters to advertisers or viewers.

*News Corp. also owns this website.

A lot to say: The Netflix CEO has written an 11-page essay that lays out his vision for the future of streaming video.

If you’re looking for news, you won’t find much here — nearly everything in the document, published on Netflix’s investor website, is a repeat of things Hastings has said or written in recent years.

But if you’re at all interested in the way Hastings thinks things are going to play out in the battle for video eyeballs, and why he thinks Netflix will win many millions of them, it’s well worth a read.

I’ve embedded the document below so you can scan it at your leisure. If you’re in a hurry, some bullet points:

• The one new nugget here is a Hastings prediction, held by many other people, that we’re moving to a world where “apps replace channels.” Hastings mentions apps nearly 3 dozen times in his essay, and makes it clear that he sees Netflix first and foremost as an app provider.
• Hastings figures that lots of other video services will figure the same thing out. And he goes out of his way to mention others that are already there or close to it, citing ESPN, HBO and the BBC.
• But those who don’t get it are screwed, he says: “Existing networks, such as ESPN and HBO, that offer amazing apps will get more viewing than in the past, and be more valuable. Existing networks that fail to develop first-class apps will lose viewing and revenue.”
• In the past, Netflix has tacked back and forth on whether it is competing head to head with HBO. Now Hastings is back in “we’re coming for you” mode: “The network that we think likely to be our biggest long-term competitor-for-content is HBO … They have global reach and strengthening technology capacity.”
• But while Netflix now has as many U.S. subscribers as HBO — and while Hastings thinks he can eventually double or triple his current 30 million — he figures it will take him a while to truly compete with HBO. “While we are passing HBO in domestic members in 2013, it will be several years before we are peers with them in terms of Original programming, Emmy awards, and international members. It wouldn’t be surprising to us if HBO does their best work and achieves their highest growth
  over the next decade, spurred on by the Netflix competition and the Internet TV opportunity.”
• But Hastings also reiterates his argument that there’s room for lots of streaming video services, just like there are lots of cable channels today. Translation: Don’t worry, Jeff Bewkes: Just because we’re coming for you doesn’t mean we’ll crush you. Also, please keep selling us Time Warner’s content! Thanks!
• Hastings also continues to offer olive branches to the entrenched cable guys, especially those that also sell broadband: “At times we have worried about the strategic motivations of ISPs that are also MVPDs, but the absence of cord-cutting has mitigated this concern. … Internet video services like Netflix, MLB.tv, iTunes and YouTube are not currently a material strategic problem for companies that are both an ISP and an MVPD.” Translation: Hey Comcast, Time Warner Cable, Verizon! It would be pretty cool if we figured out a way for you guys to bundle us along with your other video services! Let’s (continue to) talk!

Lots more below. Well worth your time.

Netflix Ir Letter

“A virtual world is an extremely complex thing. It’s almost as complex as writing an operating system.”

That’s Disney Interactive VP and Club Penguin boss Chris Heatherly on the kids’ Web-based MMO, which has grown steadily since 2005 to become one of the bright spots in Disney’s gaming portfolio. Last week, the company hosted a “media summit” about the game and the social issues surrounding it. Shortly after day one concluded, Heatherly sat down with AllThingsD for a wide-ranging Q&A.

Players may know Heatherly better by the name of his in-game penguin, Spike Hike, who has gained prominence since Heatherly replaced Lane Merrifield at the top of the org chart. He discussed the similarities and differences between Club Penguin and Facebook, his slow-and-steady mobile plans for the game, why kids play, why some stay and how “CP” is different from the more story-driven worlds for which Disney is better known.

AllThingsD: You and others at the summit put forth this idea of Club Penguin as a set of “training wheels” for social media. Is that an idea you’re actively communicating to parents?

Chris Heatherly: We don’t really market ourselves against Facebook, but we are a kids’ social network. Kids socialize around play, while adults socialize around chat, text and photos. It’s something we want to start talking about more, that Club Penguin is a safe start to social. It’s certainly always been the intention, and messaging safety has always been important, but I don’t know if we’d ever want to pit it head to head and say, “Hey, we’re the kids’ Facebook.” We’re a social experience, but a different kind, and the difference is that we create a safe environment for your kids to play.

What are you doing with the game on mobile devices?

Long-term, we want to bring the Club Penguin experience to mobile. No one really owns the kids’ virtual world on mobile. We think we have the opportunity to create the category in the same way that we did on the Web.

It seems like that would be harder to do on mobile than on the Web. A lot has changed since CP launched in 2005.

There are a lot of technical limitations. If you have an existing virtual world, you want to transition that community; you don’t want to say “start over.” Connecting a mobile environment with a flash world, you’re talking about two very different technologies. You’ve also got a difference in play style between the devices.

What sort of difference?

With computers, for the most part, you’re always-on. With mobile devices, you’re often always-on, but sometimes you’re offline, other times you lose the connection, and you can’t always count on the same amount of bandwidth. That said, we’ve made a lot of investments in the past couple years to allow us to make the Club Penguin experience available on mobile. We’re going to start in a humble way, with an app that is a companion experience to Club Penguin — it’s not a walk-around-and-chat kind of “world” experience. You’ll be able to access your avatar, change your costume, play some mini-games for coins, and get things for your coins. Over time, we want to bring more and more pieces to mobile, but we don’t want to just port the Web experience, and we want to be thoughtful as we do it.

You recently announced that 200 million penguins (user accounts) have been made from 2005 to the present day. When do kids start to age out of the game? How does their activity level change over time?

It really depends on who the kid is. Some kids really love a certain mini-game, and come just to play that. Others really love the role-play aspects. There are other kids who come just to take care of their Puffles (multicolored virtual pets). We have a very broad audience, but about 80 percent is between 8 and 12 years old.

You get the most out of the experience when you’re able to type and read. Kids who are below, say, 6 or 7, tend not to be our most engaged kids. On the other end, we have some kids that are 13, 14, 15 years old, who started playing years ago. We have players that play as long as three years, and players that play six months. The kids who stick around after [age] 12 are the ones who are really invested in that community. They feel like it’s their place.

It’s a destination.

Yes, and it’s different, I think, from a social network. I like Facebook, my friends are on Facebook, but I have no particular affection for Facebook as a place. I use it as a tool. For kids, Club Penguin is their alter ego. They’ve invested into a persona there. They know the history, they know about the water party of 2006, all that stuff, and they pass that down to the next generation of kids.

How does that work? Do people just pass it down in chat, or does that oral history happen outside of Club Penguin?

Both. Kids tell each other that stuff in the game. But there’s also a big third-party blog network that surrounds Club Penguin. Some of these kids have maybe 300 readers. But there’s a lot of those blogs. All those kids follow each other, and it spreads like urban myth.

So the memes of the game outlive the life span of an account.

Absolutely. The Rainbow Puffle is something that has been rumored for years and years and years, and yet every kid knows about it. You ask any kid who plays, they know about the Rainbow Puffle. How? Because they found a blog. Or they found something on YouTube.

Why has Club Penguin succeeded where other MMOs have failed?

The community is important, and there’s a unique tone and humor and a quirky style. But there’s a way in which Club Penguin is sort of neutral. You’re neither a boy nor a girl. Everyone’s kind of a silly, funny penguin. It’s a blank slate, and it’s a level playing field. It’s Play-Doh. Kids can make it into anything they want, and they do.

And that’s different from Disney’s usual style.

We don’t want to bring too much story. It’s very different for a company like Disney that has a lot of storytellers. Whenever we work with other parts of the company, it’s something that we talk about a lot. If you create an engaging experience that’s very linear, kids will go play it through. But then they’ll never play it again, because “you already told me that story.”

The open-endedness reminds me of Toca Boca’s kids games, which have no story at all.

I ran Disney’s toy business for many years. The way we thought about play in the toy space is completely different from the way people think about play in the game space, except for Club Penguin and things like Toca Boca. Some of the biggest Disney princess toys were props — things like tea sets, dress-up, those kind of things. The mentality of most of the games business is, “I need to tell a story. I’m going to create some levels. You need to play those levels through. If you do, I’m going to give you a badge and some points.” We’re giving kids those props and letting them create their own play.

And that even extends to the changes that have been made to the game over the years, right?

The kids will find a way to misuse whatever we give them, guaranteed. I am never bored … Club Penguin will never be finished as long as kids keep coming up with funny ideas.

There is but one remedy for the Glass wearer — a bucket of ice water in the face whenever you suspect he has taken you unawares

With the public beta launch of Google Glass, there has been a lot of discussion on why it will or won’t fail. The ultimate benchmark for success is high: After someone has tried Glass, can they imagine life without it?

It’s the wrong question.

Glass is Google’s unintentional public service announcement on the future of privacy. Our traditional bogeyman for privacy was Big Brother and its physical manifestation — closed-circuit TV — but the reality today is closer to what I call Little Sister, and she is socially active, curious, sufficiently tech-savvy, growing up in the land of “free,” getting on with life and creating a digital exhaust that is there for the taking. The sustained conversation around Glass will be sufficient to lead to a societal shift in how we think about the ownership of data, and to extrapolate a bit, the kind of cities we want to live in. For me, the argument that Glass is somehow inherently nefarious misses a more interesting point: It is a physical and obvious manifestation of things that already exist and are widely deployed today, whose lack of physical, obvious presence has limited a mainstream critical discourse.

As a product that is both on-your-face and in-your-face, Glass is set to become a lightning rod for a wider discussion around what constitutes acceptable behavior in public and private spaces. The Glass debate has already started, but these are early days; each new iteration of hardware and functionality will trigger fresh convulsions. In the short term, Glass will trigger anger, name-calling, ridicule and the occasional bucket of thrown water (whether it’s ice water, I don’t know). In the medium term, as societal interaction with the product broadens, signs will appear in public spaces guiding mis/use¹ and lawsuits will fly, while over the longer term, legislation will create boundaries that reflect some form of im/balance between individual, corporate and societal wants, needs and concerns.

So Shoot Me

Of all of the companies and organisations that could bring Glass to market, I’m pleased that Google is the one making a significant investment: A company with a recent record of genuine innovation that stretches/defines social and behavioral norms² with a strong revenue stream and deep enough pockets to have a fighting chance of medium to long-term success. It also helps that the project is considered of strategic importance, and has key executive sponsorship. Less obvious, but no less relevant in this equation, is that the company has a lot to lose, is no longer the media darling, has fucked up enough times in public to know it can do so again (and again), has been humbled by more nimble competitors, has experienced talent drain and understands the impact of this on its culture and its bottom line. Of course, Google can financially afford to fail again: Experimentation and failure is a critical part of its DNA, but while privacy-snafu fines are low, the internal and external cultural costs of Glass failing are high.

All technology challenges the status quo, and if a technology is noticed by consumers/users/constituents at all, it presents for some an opportunity and for others a threat. The perceived and actual threat from Glass comes not from crimes against taste. (Many have commented on the perceived inelegance of the design.) Google’s design team appears to have done a sterling job, if you assume that particular design direction and constraints. Our sense of what is tasteful succeeds or fails as part of a far broader narrative, which they, too, are exploring. Yes, you can find a hundred and one designs of “wearable computing” from the past decade that look similar, but very few are packing the same experience into the same form factor. However, as a connected, sensing object, it is capable of recording and transmitting photos, video and sound directly through content analysis or indirectly through proximate connected devices, other data such as location, temperature, trajectory and so on. In other words, in a worst/best case scenario it could record and measure “everything,” and associate that data to a person. How will this play out?

I want you to try a little experiment. Find somewhere where you can sit and observe people interact with one another. Pick somewhere just out of the throng — the edge of a cafe looking in, a park bench, a doorway close to a market. It’s easier if you choose somewhere you don’t know so well, you’ll have less to unlearn.

Give yourself 30 minutes to view and reflect upon the scene in front of you: Who visits that space, and why; the differences in ritual greetings, and indeed whether or not a person is greeted; how people project who they are; things that signify status and social hierarchy; where objects are placed; the level of interaction with those objects when not in use. What can you see being documented online or off? What can you imagine being documented? Pay particular attention to things that fit your definition of “technology” and reflect upon the things in front of you that once fit this definition but no longer do (my list of were-once-technologies includes the pencil, the wristwatch and the smartphone).

If you’re close enough to other people, you’ll overhear conversations plus bits of conversations that the speakers will allow you to hear, raised, projected, sotto voce and in whispers, combined with body language all serving to emphasize what is said, and the intent of what is communicated. How much of that conversation is directed at the “listener” and how much of it is directed at others in proximity, including you? This rich social choreography is playing out hundreds of billions of times a day across our planet, and is as subtle and delicate as anything appearing in a BBC2 nature documentary.

Of course, people and systems are already capturing (and channeling) content and data in this space in the form of photos, video, background noise on phone or video calls, who is connected to what, and what they are doing. It is likely that Google, Microsoft and Nokia’s Navteq (to name but three) have already systematically mapped this space and are serving up street views online. The difference with Glass is that it threatens surreptitious, unexpected or continuous recording from the perspective of the human-eye/ear view. At this point, it doesn’t matter whether it can support sustained recording for long periods or not; what matters is that the form factor supports this, that it could at some point, and that we all know Google is in the business of selling ads against insight drawn from large volume of data. Continuous, indiscriminate recording in this space is the dragnet fishing of data collection — it’s a destructive technology, a conversation- and privacy-killer.³

Back to our experiment. Take in the scene in front of you. Who owns this space, both legally and figuratively? Who has the rights to do what? By what authority? Who enforces that authority? How do these rights differ for regulars or a first-time visitor? What are the ways people signal the beginning or the end of an activity? And how does that signalling make something more or less acceptable? The obvious clue to activities people have deemed socially unacceptable are often found on hand-scribbled “do not” signs, as in “staff will refuse to serve customers who are on their mobile phone,” or “do not ask for credit.” The more sustained the infringement, the more official-looking the sign.

Today, we falsely assume that our conversations and our images are not by default recorded by other people in proximity.⁴ Not having a persistent record allows us to present a nuanced identity to different people, or groups of people; it provides the space to experiment with what we could be. The risk that what we say will be broadcast, or narrowcasted, to people we don’t know, or may bubble up at some point in the future in the hands of someone serving up ads, fundamentally changes what we want to talk about. The challenge for Glass is that the costs of ownership fall on people in proximity of the wearer, and that its benefits have yet to be proven.

Social Interaction

A number of years ago, while I was working at Nokia, I was asked to explore use cases using an appearance model (a non-working prototype) of a form factor similar to Glass, but clunkier and definitely less refined.⁵ In the first phase of this make-it-up-as-you-go-along-and-see-what-works study, we hired students in Tokyo to act out various scenarios, including content browsing, viewing and game-play using gestures and voice commands, in a range of contexts: At home, on a commuter train, on a long-distance train, in a hotel lobby, in a park, a cafe, and while walking along. The research team then noted interaction issues with the glasses, carefully observing social reactions from people in proximity before finally interviewing the actors/actresses for their own experience.⁶

Fans of Milgram’s New York subway experiment will be happy to note that our actors and actresses felt extremely self-conscious about wearing nonstandard glasses, and awkward about acting out the scenarios, particularly in contexts where there were others in close proximity. A number of the things we learned from this study surprised us:

• Most of what we “see” at any time is out of focus in the periphery where as long as the things going on in peripheral vision don’t trigger a threat response will probably pass the glance test. It will be interesting to see whether Glass is perceived as a threatening object and thus may force others in proximity of a wearer to maintain a hyperawareness of the wearer and their own actions — whereas today they are currently able to relax. This would be, in effect, like a blanket tax on the collective attention of society.⁷
• Spoken interaction is awkward for almost everyone in confined spaces on systems with less than 100 percent accuracy. An interface built around short responses to contextually understood events will be the dominant form of interaction.
• Gesture interaction is just as awkward in close spaces, and in many instances will restrict regular use and/or in a vocabulary of “quiet gestures.” To get a sense of how this plays out, the next time you are on the subway and have people sitting on either side, raise your hands in front of your face or look down and move your hands in your field of vision. Even simple gestures require upper-arm/shoulder movements, which, when you are sitting shoulder to shoulder, impact fellow passengers. A Glass wearer who wants to maintain the social cohesion in that context (and not all will be that self-aware or considerate) can mitigate this by pausing interactions for the moment when they are appropriate, or more likely by avoiding interactions in that context.
• In contexts where social interaction is required — sitting with friends around a table in a cafe, say — Glass will create a situation where people are not sure whether they or the contents of the display are engaging the wearer.
• In-ear or close-to-ear (inductive) audio changes the wearer’s enjoyment of food and drink — a problem for an otherwise prime use case: Watching movies at home, where snacks and beverages might naturally be consumed.
• Humans tend to fall asleep in contexts where they are seated, safe, and there is minimal physical movement — providing opportunities to design for disengagement.
• Humans have a vested interest in tracking changing emotional states of the people around them. This will introduce “Are you lookin’ at me?” moments where others in proximity assume that a smile, tear or frown is triggered by their own presence, and will spur people to send inappropriate content to their Glass-wearing peers, with a weary inevitability that will include this but is far less likely to include this (or is it the other way around?). In some contexts, these moments will lead to confrontation. Read the footnote in this article in the Atlantic, by Ta-Nehisi Coates, and imagine introducing erratic behavior into the equation. Amplify to billions of social interactions a day.

What starts out as a fairly broad set of use cases rapidly starts to narrow.

Tooling Up

I’ve got a confession to make. Frog, the design and innovation consultancy where I work, has recorded thousands of conversations around the world, videotaped many more, tailed people around town and nosed around people’s homes — opening cupboards and drawers, asking personal questions where there were none. All with their permission, and all in the name of research. There are a few things we’ve learned that relate to the broader discussion of what is collected by whom, how and why, and how it is used; you’ll see why these are relevant in a moment.

Any idiot can collect data. The real issue is how to collect data in such a way that meets both moral and legal obligations and still delivers some form of value.

• Ownership. People are naturally suspicious of what they don’t know. The simple act of giving them control over the process or the objects/technologies we carry defuses initial suspicion. A few simple field-research techniques can rapidly build trust. These include handing someone you’ve just met on the street a $5,000 camera and then ignoring them to concentrate on a conversation with their friends. This shows we trust them. And then they trust us.
• Clear On/Off States. Most people have (at least initial) concerns about being recorded. There are numerous effective ways that we in Frog’s design research team emphasize the transition between on and off: From how a camera or other recording device is held when not in use. It is useful to think of a camera as a gun: Understand the impact that bringing it out can have on any given context; only take it out if you’re prepared to use it and be careful where you point it.
• Reciprocity. Today it is easy to maintain a persistent connection between the researcher and the participant — often in the form of a social media account or email address. You’ve asked something of them, and they have the right and now have a channel through which to ask something of you.
• Full circle: We give participants the opportunity to review, delete or own any of the data collected on them by the research team. This is normally carried out at the end of the session, after any reward is handed over (so they are not pressured into letting us keep data) and before any data consent form is signed (so they better understand the implications of what they are signing). A team that knows the data will be reviewed by the participant changes what they collect in the first place; it becomes self-policing. More than any training, this simple principle helps keep teams honest and operating within social norms.

A few simple steps lower the more obviously anti-social aspects of Glass. The evolution of body language that helps communicate Glass’s current state, e.g. pushed above the head to show that it is not in use; a literacy around the spoken commands that communicate the current task that the user is engaged in “take panorama” or “grindr lookup”; and showing whether the camera and other recording mechanisms are in use or disabled.

Glass has four design principles for developers that focus on the Glass wearer’s user experience: “design for Glass,” “don’t get in the way,” “keep it timely,” and “avoid the unexpected.”⁸ As challenging as it is to find a compelling use-case (beyond porn), these principles are aimed at the wrong people — Glass wearers, rather than those in proximity.

Two complementary principles will go some way toward accommodating the concerns of people in proximity and lower social barriers to adoption:

• Proximate Transparency: Allow anyone in proximity to access the same feed that the wearer is recording or seeing and view it through a device of their choosing. Make it easy to identify the Glasses themselves and to trace them back to the wearer. This simple act can help demystify the technology, create a broader sense of ownership of its inclusion in any given space. The reality is that very few people would be interested in jacking in and the act of having an open stream will change the behavior of what is watched. For many this won’t be enough of a step; it is after all an opt-out measure for people who have the technological know how and literacy to — forcing people in proximity to do something for dubious gain.
• Remote Control: allow identifiable people in proximity to control Glass’s recording functionality and have access to the output of what was recorded. Allowing others to demonstrably benefit from the utility of Glass will make it part of the social landscape.

Pedestal or a Pauper’s Grave?

One could argue that the form taken by Glass offers up a lazy futurist’s vision of what might be — take the trajectory of one product (displays becoming smaller/cheaper/more efficient over time) and integrate it with another (eyeglasses), sprinkle in connectivity and real-time access to content and big-data-analytics. Our expectations of what it could be are raised in part because this join-the-dots vision of the future fits neatly into Western un/popular young-male culture, from “The Terminator” through to Halo. Glass has a certain inevitability about it, like the weight of expectation on of child born to a great composer or, if you will, to a middle-aged suicide. As any visitor to Yodobashi camera over the past decade will tell you, the hardware technologies that make Glass hardly feel novel (and for recent competitors, see Sony, Golden-i, or this Telepathy device prototype) but neither do they need to be, because this is all about how they are brought together into a holistic experience.

There are of course alternative visions of this connected future that are far more discrete, taking connected, sensing things and embedding them in the world around us to inform, guide, direct, cajole, tax, enrich us and the things around us. It’s an area worthy of an essay in its own right, but for now, here are a few pointers to people, places and things that have helped inform my sense of this space: Dan Hill at City of Sound; the MIT Senseable City Lab; Design Interactions at the Royal College of Art; Tisch ITP; BERG, Nicholas Nova and Julian Bleecker at the Near Future Laboratory help stretch our understanding of what could be; Curious Rituals in conjuction with students at the Arts Center College of Design in particular is a lovely piece of work; living for more than a decade in Tokyo, Shanghai and frequent trips to the cities that define this century’s urban experience — the Seoul/Nairobi/Mumbai/Rio/Chongqings of this world; products like Nike+, FitBit, Moves (to take one narrow category) through to less well known but arguably more impactful services that for me are at the very center of the internet of things — services like Kilimo Salama and Sarvajal;⁹ through to business units/activities in large corporations such as Cisco, IBM, Disney, and Ericsson with more of a how to make money/make a difference at scale.¹⁰

That Moment in Time

I started this essay by paraphrasing a quote — here is the original in full: “There is but one remedy for the amateur photographer. Put a brick through his camera whenever you suspect he has taken you unawares.” It could be written about Glass today, but is in fact taken from an 1885 edition of “Amateur Photographer”¹¹ magazine, seven years after the introduction of dry plates, a technology that supported more surreptitious photography. (The essay by Bill Jay is worth reading in full.)

The same essay contains another quote from “Amateur Photographer,” twenty five years later, when cameras were becoming smaller, less noticeable: “Our moral character dwindles as our instruments get smaller.” In due course, the technologies to deliver Glass’s emerging functionality will truly disappear from view — this is a window of opportunity for discussion, debate and a reflection.

I’m thankful to Google for putting so much effort into Glass at this moment in time.

That passion? Channel it.

That anger? Channel it.

Jan Chipchase is Executive Creative Director of Global Insights at Frog, a design and innovation consultancy. He has not tried Google Glass, and has no idea whether he has been recorded through one. His first book, “Hidden in Plain Sight,” available from HarperCollins on April 16, explores issues around technology adoption, use and abuse.

¹ This sign did the rounds but is closer to advertising for a pleasantly seedy bar than a warning sign. The suspicion can be real, but the true test comes from reactions to a wider deployment.
² Eric Schmidt’s quote, “Google policy is to get right up to the creepy line and not cross it,” is an interesting reflection of company culture. It’s refreshing to have a CEO that is this frank about the business they are in and the way they operate, and it’s an interesting assumption that the best way to institutionalize an understanding of creepy is to measure it and place it on a line.
³ If you want to extrapolate the argument around wholesale recording through Glass, it’s actually highly inefficient, particularly once much of that space and context is known. There are other, emerging technologies with far more processing power and unlimited power supply that are in a better position to continuously record.
⁴ There are many examples of what we say and do being recorded: From the obvious conversations in an interrogation room through to corporations tracking employee emails and IM chats, all the way to state agencies. When conducting research in Iran and making a call to the U.S., I assume it is being recorded by both Iranian and U.S. agencies. The only question is who else is listening and what is their motivation, today and at some point in the future.
⁵ I’ve not done a full write up of the research, but it was shared publicly a few years back.
⁶ After the Tokyo study, my then colleague Raphael Grignani ran a comparable study in New York City, with broadly analogous findings.
⁷ The physical toll of having to maintain a state of hyper-awareness is touched on here and here, and while these are extreme examples it is an interesting topic to further explore.
⁸ As Bruce Sterling pointed out, take each of those design principles and flip them to understand the actual experience.
⁹ We are running a study around water consumption and Sarvajal and will be sharing more on the project in due course.
¹⁰ Full disclosure: This list includes both personal and Frog clients.
¹¹ “The Amateur Photographer,” 18 September 1885, p. 871.

“We believe Club Penguin is a safe start to social,” said Chris Heatherly, Disney Interactive’s VP and GM, who replaced Club Penguin founder Lane Merrifield last October.

Heatherly and other Club Penguin employees described the site as a social destination, similar in some ways to Facebook, which officially does not allow users under the age of 13 (not that that has ever stopped anyone).

Facebook’s 13-plus rule derives from laws like the Children’s Online Privacy Protection Act, which outlawed the online collection of personal information about the under-13 set. So, for Club Penguin’s primary audience of 8- to 12-year-olds, moderators manually screen out usernames that contain players’ real names and ask for parents’ email addresses — not players’ — during registration.

The company announced an upgrade to its “Safe Chat” technology, which screens out words, phrases and slang, not to mention players’ “dictionary dancing” attempts to circumvent the filter by combining words that sound like banned words. For example, to prevent bullies from saying “you’re gay,” the company also blocks out phrases like “you’re grey.”

But the effectiveness of auto-moderation based on whitelisted and blacklisted words is limited, company reps said. Social tech director Marc Silbey gave the example of the word “beach,” which some players have tried to use in lieu of the banned word “bitch.” Trying to censor phrases that sound like “you are a beach,” Sibley said, can also ensnare harmless sentences like “you want to come to the beach?”

The new upgrade, officially called “dynamic validation,” feeds the entirety of what kids type into a real-time search engine that tries to divine meaning and appropriateness. Silbey said about 80 percent of what Club Penguin players type is ultimately ruled “safe,” and that the new technology can automatically validate 90 percent of that without the need for a human moderator’s judgment.

Humans are still a necessary part of the puzzle, however, and CP has more than 200 moderators stationed worldwide round the clock, Heatherly said.

Since the game launched in 2005, more than 200 million penguins have been created, though that number includes inactive accounts of players who have “aged out.” Some players, however, come back to the game even when they’re well beyond the normal age demographic because they want to participate in Club Penguin’s annual charity events or special “parties,” which can have themes based around holidays like Halloween or in-game story events.

Club Penguin makes its money via paid subscriptions and merchandise based on the characters: The titular multicolored Penguins; their enemy, Herbert, the polar bear; and their fuzzy pets, called Puffles. Subscriptions give players the ability to dress up their penguins, buy furniture for their homes and adopt pets using virtual currency that is earned from minigames.

In addition to the blend of human and automated chat moderators, Club Penguin’s safety team outlined its response plan for times when players say or do things that suggest they have more serious problems than potty mouths. For instance, when the words “I want to kill myself” popped up in a moderator’s auto-”blocked” chat list, the moderator traced the player’s IP address and contacted the local police, who tracked down and helped the troubled child.

“I wouldn’t be here if I didn’t believe this company was doing the right thing,” online safety head Gerard Poitras said.

Poitras echoed Heatherly’s sentiment that Club Penguin can prepare children for the rest of the Internet: “Kids need to utilize this as a set of training wheels,” he said.

“We’ll never be done [with safety],” Poitras added. “We’ll have to change with the environment. As society changes, we change with it.”

BTIG analyst Rich Greenfield crunches those numbers (registration required), and concludes that this makes Netflix the equivalent of the most-watched cable TV network: He figures there are 28 million U.S. Netflix subscribers watching an average of 87 minutes of Netflix per day, or 43 hours per month. That puts it on par with the Disney Channel.

Presumably some of those hours were spent watching “House of Cards,” Netflix’s first big-budget foray into original programming. Which leads us to the maybe-not-such-good-news for Netflix: Its next show may be a dud.

You can’t say the reviews are in for “Hemlock Grove,” a horror series from director Eli Roth that debuts next week. But one prominent review is in, from the Hollywood Reporter’s Tim Goodman.

And it is not good at all.

“Here comes the company’s first truly bad series,” Goodman writes, then goes on to complain about the show’s writing, acting, casting and everything else.

Even people who are really, really high may not be satisfied with this one, Goodman says: “Is there a bong big enough for this show?”

If you want to spin this positively on Netflix’s behalf, you can point out that this is a single review. [UPDATE: An eagle-eyed tipster directs me to a much more positive review from People magazine, which gives the show three out of four stars: "Imagine "True Blood" directed by Sofia Coppola". You can see a screenshot of the review below.]

And if you want to keep going, you can argue that there are lots of popular TV shows that critics don’t like (though no one was making this argument when “House of Cards” got raves).

Want more? Okay. Even if “Hemlock Grove” is a real stinker, Netflix gets more chances, just like any other TV network. A new season of “Arrested Development,” up next month, is almost certain to succeed, based on the show’s rabid fan base, much of which was cultivated on Netflix in the first place.

* Don’t worry! The SEC has now blessed this form of communication, which is a good thing, since it’s 2013. Phew.

Here’s that People review:

That’s very cool, and that’s a reason to cheer on Google as it starts to expand its Fiber project outside of Kansas City — if Google really does prompt other pipe guys to improve their product to compete, you can’t ask for more.

But again, a reminder: When it comes to the TV part of Fiber, Google is acting just like any other pay TV company — you give it a bunch of money, and it gives you a bunch of channels, no matter which ones you actually watch.

That’s the bundle concept that ties together the entire TV Industrial Complex, and while lots of people are always talking about breaking the bundle, no one’s done it yet. And Google doesn’t seem interested in trying to do it here.

Google is annoyingly vague about the TV channels it will have in Austin (and any other details about its offering). But it’s reasonable to assume that it’s going to look a lot* like the ones it offers in Kansas City.

At least some of the programmers it works with in Kansas City have deals that will allow Google to roll over the same offering into new territories, industry executives say. (See, Google? Not that hard.)

And there’s no reason for the channels not to support the move. Google gives the cable programmers what they want, which means deals to take all of their networks, at rates that are as least as high as the ones they negotiated with AT&T and Verizon, the last two big guys to enter the pay TV world.

Note that when Google announced its Kansas City rollout, it didn’t have programming deals with all of the big programmers nailed down. But since then, News Corp., Disney and Time Warner’s Turner channels have all signed on; the only real glaring holes are AMC’s networks, including AMC and IFC, and Time Warner’s HBO premium channel.

*One Austin channel Google is bragging about today that should be available is ESPN’s Longhorn Network, a must-have for University of Texas football fans. (Correction: An earlier version of this story incorrectly stated that Longhorn was not available via Google Fiber in Kansas City.)

Pres Panayotov / Shutterstock.com

Is News Corp. really going to yank Fox off the airwaves in response to Aereo?

Snap consensus judgement from the various corners of the TV Industrial Complex: No way. At least, not anytime soon.

People I’ve talked to who work in TVland think that News Corp. COO Chase Carey’s comments are just that — comments, not a plan.

It’s possible that over time, if broadcasters do think that Aereo or Aereo-like technology really threatens the fees they get from pay TV operators for their over-the-air programming, they’ll move more of it to cable networks. And, in fact, programmers have already started moving lots of high-profile sporting events from free TV to pay TV.

Near-term, however, people seem to think that both practical and legal restrictions — for instance, deals that Fox and CBS have with the NFL for football broadcast rights — would prevent this from happening. More important: There isn’t any reason to do so right now, since only a handful of people are actually using Aereo to get broadcast TV for free.

All that said, Wall Street seems to like the idea.

Earlier this year, Bernstein analyst Todd Juenger gamed out a scenario where all four broadcasters moved from over-the-air to pay networks, and concluded that it wouldn’t be a terrible idea, at least financially. By Juenger’s thinking, the lost “retransmission fees” and advertising dollars the broadcasters would lose from over-the-air programming would be replaced by even higher “affiliate fees” and advertising dollars they could get on cable.

And Juenger thinks that move might benefit pay TV distributors, too: “There is enough logic here to suggest it wouldn’t be completely crazy for a cable operator to make a pre-emptive offer to broadcast networks in a given market to convert to a cable model.”

In any case, for whatever reason, TV investors are cheering Carey on. Look what happened to shares at Fox owner News Corp. (which also owns this website), ABC owner Disney and CBS this afternoon after 1:30 pm ET, when Carey made his remarks at an industry conference:

The outlier here is NBC owner Comcast, whose shares also moved up after Carey’s remarks, then down again. Perhaps some investors are less comfortable with what this means for America’s biggest pay TV operator.

(Image courtesy of Pres Panayotov / Shutterstock.com)

For our readers who are not inclined to constantly hit the refresh button, here’s a quick look back at the Top 10 stories that drove AllThingsD this week:

1. Disney Shuts Down LucasArts
2. Here’s Why You Hate Your Cable Company
3. AT&T: Oh, Wait … About That Samsung Galaxy S4 Pricing
4. Samsung Says Apple’s Patent Damages Could Still Exceed $1 Billion
5. HD Voice Will Start Coming to AT&T Later This Year
6. You Still Can’t Resell Your iTunes Songs, Court Rules
7. Elissa Murphy, One of Yahoo’s High-Profile Tech Execs, Heads to Go Daddy as CTO
8. Henry Blodget Is Quietly Planning a Stunning Return to Wall Street
9. What’s Dell’s Bidding Process Really About? (Clue: It’s Not About Fixing Dell)
10. Windows Phone Gaining a Toehold in Some Markets

For more of the week in review, you should follow us on Facebook and Twitter.

Multiple sources say Chernin, via his Chernin Group holding company, has made a formal bid for the site, which is owned by Disney, Comcast and News Corp. (News Corp. also owns this site).

Reuters, which first reported Chernin’s interest in Hulu, says he offered $500 million for the site; two years ago, when Hulu’s owners put the site on the block, they were looking for $2 billion.

A source familiar with the bid says Reuters’ $500 million number is low. In any case, it’s likely to be the starting point for a negotiation, which would hinge on the licensing rights News Corp., Disney and Comcast would provide for the money-losing site, as well as what happens to the $300 million debt its owners have taken on in the last year. (UPDATE: Here’s a bit more clarity: Someone else familiar with the bid suggests that Chernin’s initial bid is for Hulu, along with a limited set of rights to programming from its three owners, but says that the bid could increase if those rights increased. That makes more sense.)

That is, if its owners decide to sell it. Though Hulu’s owners are talking to other would-be buyers, including Ross Levinsohn, the former News Corp. executive who once managed the site, News Corp. and Disney are still discussing scenarios where one or both companies hang on to the site (co-owner Comcast gave up its management rights to the site as a concession to federal regulators a few years ago).

If Chernin ended up with Hulu, it’d be an excellent full-circle story, if nothing else. During his News Corp. tenure, Chernin was one of the site’s primary architects and boosters; many people think that his departure from News Corp. was a huge blow for former Hulu CEO Jason Kilar.

Also interesting: Chernin has a big slug of funding from Providence Equity Partners, Hulu’s initial investor, which sold its stake in Hulu last year. If Chernin ended up buying the site, Providence would essentially end up as a Hulu backer again.

Chernin has also mused in the past about what it would take to create an online competitor to HBO, starting from scratch. Perhaps a well-known video property could help him jump start those plans.

Here’s a highlight reel of a chat I had with Chernin at our Asia:D conference in Hong Kong in 2011; we spent some of that time talking about Hulu’s past and then-present.

]]> http://allthingsd.com/20130405/peter-chernin-wants-hulu-too/feed/ 0 http://allthingsd.com/20130404/chernin-comcast-investing-in-youtube-tools-startup-fullscreen/ http://allthingsd.com/20130404/chernin-comcast-investing-in-youtube-tools-startup-fullscreen/#comments Thu, 04 Apr 2013 22:16:22 +0000 Peter Kafka http://allthingsd.com/?p=309441
Old media companies keep lining up to invest in YouTube. Here’s the latest: The Chernin Group and Comcast are putting money into Fullscreen, a startup that’s supposed to help video makers manage their presence on the world’s largest video site.

Sources say the two companies are part of a $30 million round that gives Los Angeles-based Fullscreen a pre-money valuation of $110 million.

I don’t know if any of the money is coming from secondary sales; I’m told the deal hasn’t closed yet but is supposed to soon.

No comment from Chernin Group, led by former News Corp. COO Peter Chernin, or Comcast, which is investing in the round via its Comcast Ventures arm. I haven’t heard back from Fullscreen CEO George Strompolos.

The round follows other recent Big/Old Media bets on YouTube startups, including Time Warner’s investment in Maker Studios and Bertelsmann’s investment in fashion network StyleHaul.

Like those two companies, Fullscreen generates revenue by representing a pool of semi-pro video makers on YouTube. Unlike those “multi channel networks,” though, it also has a software service it sells to content owners who want to navigate Google’s video site; customers include Disney Interactive, Comcast’s NBCUniversal and News Corp.’s Fox (News Corp. also owns this website).

Strompolos started Fullscreen a couple years ago; prior to that he had worked at Google and YouTube, where he worked with many of the YouTube content makers he represents now.

You can get a brief sense of what Fullscreen is up to in this video Strompolos made for how-to video maker Howcast; you can see the full series of his clips here.

]]> http://allthingsd.com/20130404/chernin-comcast-investing-in-youtube-tools-startup-fullscreen/feed/ 0 http://allthingsd.com/20130403/disney-shuts-down-lucasarts/ http://allthingsd.com/20130403/disney-shuts-down-lucasarts/#comments Wed, 03 Apr 2013 18:19:11 +0000 Eric Johnson http://allthingsd.com/?p=308937 Disney has shuttered LucasArts, the games publishing and development division of Lucasfilm, which Disney acquired in October. However, the company said in a statement that, “after evaluating our position in the games market,” it still plans to license “Star Wars” characters for future games. Kotaku reports that about 150 people have been laid off as a result of the company closure. In addition to the many Star Wars videogames LucasArts had released over the years, the studio was also known for games like Sam & Max, The Secret of Monkey Island and Afterlife.

]]> http://allthingsd.com/20130403/disney-shuts-down-lucasarts/feed/ 0 http://allthingsd.com/20130401/barry-diller-and-aereo-win-another-legal-battle/ http://allthingsd.com/20130401/barry-diller-and-aereo-win-another-legal-battle/#comments Mon, 01 Apr 2013 15:41:48 +0000 Peter Kafka http://allthingsd.com/?p=308155 Another legal victory for Aereo, the Internet video startup that wants to upend the TV industry: A Federal appeals court has rejected a request from broadcasters and TV station owners to halt Aereo’s TV-over-the-Web service.

By a vote of 2 to 1, the Second Circuit appeals court denied a preliminary injunction motion filed by big media companies including Disney, CBS and News Corp. (which also owns this website), upholding an original decision from last summer. You can read the entire decision at the bottom of this post.

In essence, the court said that Aereo’s technical architecture — which pulls down broadcast TV signals from the air, stores them on a computer and retransmits them to its users over the Web, without paying broadcasters for the rights to do so — may well hold up to further legal scrutiny.

The ruling doesn’t mean Aereo’s court battles are over by any stretch, but it is another win for a company that knew from the outset that it would spend a lot of time and money on lawyers. Aereo is specifically designed to fit a legal precedent established by Cablevision, the cable TV company that won the right to create a “cloud-based” DVR for its customers a few years ago. So far that plan seems to be working.

If Aereo, backed by Barry Diller’s IAC, does end up winning in court, it doesn’t ensure that the company will succeed. But it would most definitely affect the bottom line of the broadcast TV networks, which pull in huge fees from pay TV providers for the right to show their programming. Aereo has already received overtures from pay TV providers like Dish Network and AT&T that are intrigued by the notion of bundling the company with Internet-only broadband packages, as the Wall Street Journal reported yesterday.

It is worth noting the dissenting opinion from District Court Judge Denny Chin, who doesn’t buy the Cablevision argument at all: “The system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act and to take advantage of a perceived loophole in the law.” We’ll have plenty of time to watch the two sides hash this out some more.

Meanwhile, if you want to see Aereo CEO Chet Kanojia demonstrate how his service actually works, here he is in action at our D: Dive Into Media conference from February.

AEREO decision –

]]> http://allthingsd.com/20130401/barry-diller-and-aereo-win-another-legal-battle/feed/ 0 http://allthingsd.com/20130325/hulu-isnt-for-sale-yet-but-buyers-are-asking/ http://allthingsd.com/20130325/hulu-isnt-for-sale-yet-but-buyers-are-asking/#comments Mon, 25 Mar 2013 20:56:08 +0000 Peter Kafka http://allthingsd.com/?p=306515 Two years ago, Hulu’s corporate owners put the video site up for sale — and then took it off the block.

New version of a similar story: Hulu’s corporate owners still aren’t sure what they want to do with the site. But they are starting to hear from would-be buyers, anyway.

One of those potential purchasers is Ross Levinsohn, who worked hard to buy Hulu when he was running Yahoo in 2011.

Now Levinsohn is working for Guggenheim Partners, the $160 billion fund manager that owns the Los Angeles Dodgers and media assets like the Hollywood Reporter, and industry sources say he has talked about buying the site again.

Other companies that have kicked tires — or indicated an interest in kicking tires — include Yahoo and Amazon, sources say.

No prospective buyer has made anything like a formal offer, though. And no one can buy anything until Hulu owners Disney and News Corp. (News Corp. also owns this Web site) figure out a plan for the video hub.

They’ve been trying to do that for a couple years, and in the interim there have been some significant changes at the site. Last year early backer Providence Equity Partners sold its stake, and in January CEO Jason Kilar announced his plan to depart.

But Disney and News Corp. still haven’t agreed on whether the site should focus on an ad-supported model or a subscription one, and while both have talked about buying out the other partner, those discussions are still “fluid,” according to people familiar with the negotiations. (Comcast’s NBCUniversal also owns a stake in the site, but gave up its management role a few years ago in a concession to federal regulators.)

And just like 2011, the key issue for any Hulu buyer would be the content licenses Disney and News Corp. are willing to extend to an outsider.

In the past, the two companies were unwilling to offer long-term deals for their content, which meant anyone who bought Hulu was really buying a Web site and a chance to renegotiate for new content deals in a couple years — that is, they weren’t buying much.

Maybe that will change when and if Disney and News Corp. resolve their differences. If not, hard to see anyone buying the site this time around, either.

]]> http://allthingsd.com/20130325/hulu-isnt-for-sale-yet-but-buyers-are-asking/feed/ 0 http://allthingsd.com/20130319/espns-cunning-plan-to-stream-march-madness-head-to-bill-simmons-house/ http://allthingsd.com/20130319/espns-cunning-plan-to-stream-march-madness-head-to-bill-simmons-house/#comments Tue, 19 Mar 2013 19:01:43 +0000 Peter Kafka http://allthingsd.com/?p=304857 Turner and CBS paid a gazillion dollars for the March Madness tourney, so the only way you can watch/stream the games is by heading to one of their channels/sites.

But ESPN, which isn’t paying a penny for the games, has figured out how to get in on the action, too. Bill Simmons, the sports network’s star columnist/podcaster/broadcaster/editor, will be offering up commentary during the tournament’s first two days, live, via a YouTube link.

Simmons will host the video stream from his house, along with a cast of characters from his Grantland universe, including ESPN analyst Jalen Rose and writer Rembert Browne.

The idea isn’t to compete with the games themselves, but to offer up pre- and post-game commentary at preset times, along with the option of breaking in live if something merits a pop-in.

I don’t know if this will work, but it certainly sounds intriguing. And a lot more promising than most “second screen” efforts, which seem designed to fulfill some business development goal without ever considering what a bona fide human might want to do while they watch TV.

And I’ve seen at least one version of the idea that seemed to work pretty well: For the last few years, the New York Times’ David Carr and A.O. Scott have been livestreaming their own commentary during the Oscars. If you tuned in to the show last month, you got to see stuff like this.

Here’s Simmons’s vision for his experiment, via email:

We want this to feel like a looser, more irreverent studio show. Like a live podcast where people feel like they are hanging out with us while watching basketball. I have no idea if this will work but we like trying new things at Grantland. … the only way we know if something will be successful is by trying. We will talk about things that I assure you none of the traditional shows will be talking about. Office pools, gambling picks, what we are eating, etc. I can also promise you no other studio show has their mother cooking all day Thursday an Italian feast for everyone to eat on Friday’s shows.

At the end of the day this really is just a convoluted way of getting ESPN to pay me to watch basketball with my friends. Oh — and now I can write off part of my man cave on my taxes.”

(Simmons’s rep would like us to stress that he’s joking about the tax dodge. Though it seems reasonable to me.)

ESPN isn’t attaching ads to the streams, but I can imagine that if it works out, they might try that down the road. Meantime, this isn’t an ESPN stream that requires a cable subscription or any other prerequisite — point your browser to Grantland.com/live and you should be good (not quite sure if the YouTube-hosted stream will play on mobile devices, though).

Here’s the tentative schedule for the shows, to be repeated Thursday and Friday:

• 11:30-12:15 am ET
• 1:30-1:45 pm ET
• 6:10-6:50 pm ET

]]> http://allthingsd.com/20130319/espns-cunning-plan-to-stream-march-madness-head-to-bill-simmons-house/feed/ 0 http://allthingsd.com/20130318/global-platform-head-carroll-departs-yahoo-for-go-daddy-while-yahoo-news-head-leaves-for-nbc/ http://allthingsd.com/20130318/global-platform-head-carroll-departs-yahoo-for-go-daddy-while-yahoo-news-head-leaves-for-nbc/#comments Mon, 18 Mar 2013 21:26:01 +0000 Kara Swisher http://allthingsd.com/?p=304413

As I noted in a piece last week about the departure of Yahoo Mail head Vivek Sharma for a new job at Disney, the Silicon Valley Internet giant is likely to see a lot more execs unhappy with the new regime of CEO Marissa Mayer take off after annual bonuses start being handed out in March.

Today, it’s James Carroll, SVP of the consumer and global platform group at Yahoo.

In the job, the former Microsoft exec has been in charge of the company’s global R&D centers in China, India and the Middle East and been “responsible for Yahoo’s content, social and membership platforms and the international delivery of all Yahoo! products and services worldwide.” That has included all its efforts at internationalization, international infrastructure development and localization.

Sources said he is leaving to head international at Go Daddy, one of the world’s biggest Web hosting and domain registration companies. Go Daddy is led by former Yahoo product head Blake Irving, who had hired Carroll at Yahoo in 2010.

And, as NBC announced earlier today, editor in chief of Yahoo News, Hillary Frey, has taken a job there as editorial director of news at NBCNews.com, which is undergoing a major refurbishment. She had been at Yahoo since late 2011.

Many more to come, I am told, as execs either decide to depart or Mayer continues to clean house. It’s still unclear who will be taking over these key jobs at Yahoo.

One thing for sure: I don’t expect a comment from Yahoo PR on the changes.

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