That is, ESPN thinks it can preserve its traditional premium fees from paid TV distributors, while also making money from online offerings.

Where some in television have worried about “turning analog dollars into digital dimes” (I believe that originated with former NBC CEO Jeff Zucker), Skipper said of ESPN, “We take the dollar and we take the dime, as well.”

ESPN viewership is 99 percent live, Skipper said, and it fights cord-cutters by not giving its content away for free. That’s in contrast to NBC, which will be livestreaming this weekend’s Super Bowl online.

“We have a different philosophy,” Skipper said. “We believe that the content we sell to distributors for a lot of money, that we should not distribute it for free to someone else.”

By contrast, Skipper said, “The Rose Bowl is not available for free. You have to have a paid television subscription, and then you can watch it wherever you want.”

Since 2005, ESPN has made sure that all its content deals include rights for every device. As Skipper put it, “We don’t cannibalize ourself, we use those platforms to cross-promote.”

Further, Skipper says ESPN is well worth the money distributors pay (something that draws a lot of grumbles from others in the industry). It brings in strong local ad sales, and has pioneered 3-D and HD content on television.

“The rates we get from distributors are directly correlated to the value we provide,” Skipper said.

A stickler for detail, Dauman noted that while the House of Representatives’ Stop Online Piracy Act was a focal point of online protests, it was the Protect IP Act, the Senate version of the bill, which would have set the legislative precedent.

“I think the bill that would have emerged would have been very reasonable,” Dauman said.

“It became almost religious dogma that any legislation built around the process would have broken the Internet and created censorship around the world,” Dauman said.

Meanwhile, he argued, many technology companies supported a patent bill last year. “There should be a system where patent and copyright are both protected to make these two industries grow,” Dauman said.

Dauman — or “Philly D,” as Snooki apparently calls him — addressed a number of other topics in an onstage conversation with AllThingsD’s Peter Kafka.

Regarding the hefty payments sports networks get from cable and satellite companies, Dauman said he felt they were due for a reduction.

He said Viacom channels account for 20 percent of all viewing on subscription television, and a greater portion for young viewers. Dauman attested that, according to an unnamed distributor’s set-top box data, half of its audience never turns on sports-only channels, while half of its content costs come from sports.

“I do believe that premium content should command premium value, but there’s a fine line,” Dauman said.

We’ll hear more on that topic from ESPN’s John Skipper at the conference later today.

As for developing internal technology and acquiring tech companies, Dauman said, “We prefer to work with partners.”

“Everyone who’s developing a new form of distribution or technology stops by our office,” he said.

But if you watch the game on the Web, your eyeballs are worth a whole lot less. NBC, which is streaming the entire thing for the first time ever, will be lucky to get anything near a million dollars for that same ad when it runs online.

So why is Comcast’s broadcast network putting the game on the Web, period? Isn’t this the classic analog-dollars-to-digital-dimes trade that Big Media strives so hard to avoid?

Nope, says Rick Cordella, who runs digital for NBC Sports. The network assumes that nearly every eyeball — and every ad dollar — that it gets from the Web this week will be a bonus, because whoever watches online is simultaneously watching on a big TV, the way football is supposed to be watched.

This is supposed to be the classic “second screen” experience that Twitter’s Dick Costolo and so many other digital folks are excited about.

And that makes plenty of sense to me. Many TV guys have gotten plenty comfortable with the idea of streaming their most valuable live sports events online, for free. In most of those cases, the general assumption is that anyone who’s watching on the Web is someone who can’t watch the game on a TV to begin with — see the CBS/Turner Sports livestreams of the NCAA March Madness tournament.

And in NBC’s case, it is packing the Webcast full of extra camera angles and other goodies, including a feature that will let you rewatch every Super Bowl commercial once it’s aired. The assumption is that you’re holding the TV remote in one hand, and controlling your laptop with another.

NBC already does a version of this with its Sunday Night Football broadcasts during the regular season, and the network says it draws between 200,000 and 300,000 unique viewers per game (that’s the source of that Vikings-Saints screenshot, above).

Meanwhile, those broadcasts are the networks’ best-performing shows by a long shot, so it doesn’t seem to have slowed them down. The NFL, meanwhile, reports that Web companion streams of the Thursday night games it shows on its own channel averaged 450,000 uniques.

So Cordella argues that putting the biggest TV show of the year online, for free, is really no big deal. But I’m pretty sure that this attitude isn’t shared by everyone in the TV business, and we might hear a bit about that today at the D: Dive Into Media conference. Curious to see what ESPN boss John Skipper thinks, for starters.

Let’s take another peek, courtesy of SNL Kagan and Barclays analyst Anthony DiClemente, who has an updated list of wholesale prices by channel* (the list on the right is for ad rates, which we can ignore for the purposes of this story):

Takeaway from today’s chart: Nothing has really changed — you’re still paying a lot for sports, and you’re paying a lot for ESPN.

That’s why Disney’s sports channel is the most valuable asset on your cable dial. And it’s also why you’ve been hearing increasing grumbling — from both customers and ESPN’s non-sports cable competitors — about ESPN’s drag on your cable bill. (We’ll talk to new ESPN boss John Skipper about this topic next week at Dive Into Media.)

As I’ve noted before, the odds are that this doesn’t change anytime soon: Disney and ESPN can charge that much because the cable guys, like Comcast, think the programming is worth it to their customer base. And they’re signing up long-term deals that will keep that fee structure in place for the next decade.

But there is a chance that a “virtual” cable operator, using the Web, decides to offer a package that doesn’t include ESPN. They could either use that unspent money to lower customers’ bills, or plow it into other programming.

Again, this will also mean that subscribers couldn’t get any Disney programming, because Bob Iger has zero interest in splitting up the bundle. But I know of a few folks who have at least contemplated the idea.

So what about that “over the top” option, anyway? Some industry observers, like BTIG’s Rich Greenfield, are sure that someone — Apple, Google, Verizon, who knows — will offer one this year. Today, Bernstein’s Craig Moffett has a long essay describing why that won’t happen for a long time, if ever. Netflix CEO Reed Hastings said something similar this week, alluding to the fact that Microsoft has reportedly bailed on its Web TV subscription plans.

*The 2012 chart omits regional cable channels, which is why Fox Sports Net has disappeared in the new chart. I don’t know why the new one includes outliers like 3net, a 3-D channel that isn’t widely available (and/or relevant, as best I can tell).

[Image: ESPN]

Instead, I’m focusing on the ones that promise to bring me the TV I want to see, when I want to see it, without charging me a fortune. And without making me pay for stuff I don’t care about.

Try it yourself. See? Things get quiet in a hurry.

All that other stuff that everyone is talking about right now — new ways to get Web video onto your TV set, new ways to chat up your friends while you watch TV, etc. — is sort of interesting. Maybe it eventually turns into something really interesting.

But none of it solves the problem that regular people have with TV right now. Because they actually like TV quite a bit, and watch tons of it every week, and they’re okay paying for it, too, even if they say they’re not. They just want to pay less for the stuff they want.

Making that happen will require a lot more than using AirPlay to throw video from your iPad to your LCD, or making it easier to search the Web via a Google TV. It means fundamentally overhauling the TV business.

And while it can look like the TV business is loosening up dramatically — look at all those shows the networks are putting on the Web, for free! — it’s actually tightening up considerably — it’s getting harder and harder to watch that stuff, it turns out, without paying for cable, or going rogue.

Even the most interesting stuff I’ve heard about — selling TV “over the top,” via the Web — still contemplates buying bundles of channels from the programmers, which means that over-the-top TV will look just like cable TV. Just like satellite TV and fiber TV do.

“I think there’s not a lot wrong with the business models,” says Myspace owner Tim Vanderhook, who wants to launch his own over-the-top service this year. I’m not at all confident that he’s going to pull it off, but I’m sure the programmers are happy to have a chat. They love the idea of more buyers ponying up for their stuff.

One interesting variant you’re hearing more about right now involves keeping bundles intact, but buying less of them. If you don’t pay for ESPN, then you’re not going to get anything from Disney, including ABC Family and the Disney Channel. But if you can live with sports or kids stuff, you could save an awful lot — or put the money into other programming you do care about.

That’s not nearly as sexy as The End Of TV As We Know It, but it is doable. And I’ll definitely holler about that one, if and when we see it.

For 2012, they are focusing on making TVs “smarter” by enabling them to connect to the Internet for apps and video services on the Web.

But that doesn’t mean 3-D is going away. It’s just riding shotgun with smart TVs.

Smart TV is not a new concept, of course. Up until now, it has been defined as Internet-connected television achieved through a separate box or device that connects to the TV and streams Internet content, or via a computer-like processor built directly into the TV.

On the showroom floor in Las Vegas next week, electronics makers including Samsung Electronics, Sony and LG Electronics are expected to show off more television sets that bring Internet connectivity to entertainment centers for the home. Yesterday, Google announced that LG will join the list of companies supporting Google TV; Samsung, Sony, and Vizio Inc. have also adopted Google’s Internet TV technology.

With Apple rumored to have a possible Internet-connected HDTV in the pipeline, TV makers are making all kinds of pushes to bring to market devices that offer consumers a full range of options. For many consumers, the answer for now will still be external devices that offer easy, upgradable solutions, like the Microsoft Xbox, Apple TV, Google TV and even Roku’s latest gadget.

Analysts believe that Internet-enabled TVs will begin to take a larger share of the market by default, eventually becoming a check-off item for consumers, rather than a special feature. Some 60 percent of new televisions being sold in 2012 are expected to have Internet connectivity. According to NPD’s DisplaySearch, connected-TV shipments are expected to reach 138 million globally by 2015, accounting for 47 percent of all flat-panel TVs.

So where does 3-D fit into all this?

TV makers will still be touting 3-D at CES 2012, as many smart TVs will also include 3-D capabilities. Samsung Electronics, for instance, says that more than half of its 2012 TV models will support 3-D. “Our commitment to 3-D is only deepening,” says Ethan Raisel, director of communications at Samsung.

Tim Alessi, Director of New Product Development at LG, estimates that around 20 percent of all LG TV units will support 3-D, and notes that 3-D is featured in 50 percent of the company’s lineup for this year.

But despite the fact that 3-D TV sales in 2011 showed some encouraging gains — with an estimated 21.5 million 3-D units reported to have shipped last year and sales showing significant gains from quarter to quarter — the forced exuberance over three-dimensional screens has been tempered a bit.

That’s likely because it doesn’t matter how well 3-D TV units are selling — for the consumer, anyway. “It’s not really the penetration that matters, it’s the use,” says Forrester Research analyst James McQuivey. “You’d be hard pressed to find a 3-D TV owner that actually uses it in 3-D mode even once a week. That’s not a formula for building consumer momentum.”

For TV, 3-D presents a three-headed monster: To start, there are the technical and psychological obstacles of those pesky 3-D glasses — and while autostereoscopic (glasses-free) 3-D technology is being worked on in many R&D labs, industry experts all agree that quality 3-D without glasses is at least a few years away.

Secondly, 3-D presents a chicken-and-egg dilemma that doesn’t exist with smart-TV features — the question of where the viewable content will come from. Many content creators have been holding off on making 3-D programs. The Discovery Channel and ESPN made headlines two years ago when they announced 3-D channels; but in terms of sports, 3-D has been relegated to key events, due to high production costs.

An increasing number of 3-D movies are available on DVD, but moviemakers that hopped aboard the 3-D train early — think Pixar Animation Studios and DreamWorks Animation — were likely doing so to plant a flag in the ground for when 3-D finally does hit critical mass in the living room, says Scott Steinberg, head of strategic consulting firm TechSavvy.

Sony Chairman and CEO Howard Stringer even said recently, regarding the company’s 3-D TV push, that he hadn’t realized all of the challenges in getting 3-D content in place.

And the third issue affecting the uptake of 3-D has been the cost of the sets. On average, the cost of 47-inch to 50-inch 3-D TV sets is $400 more than similar HDTVs, according to a 2011 report from Retrevo. And while the entire consumer electronics industry has been hurt by a weak U.S. economy, TV sales have been hit particularly hard.

Steinberg says that for the average American household, television purchasing is about being practical right now. “It’s much more important to have the maximum-value TV with Internet capabilities and apps, than to invest in a still-unproven technology like 3-D.”

A December 2011 report from Parks & Associates on consumer purchasing intent also indicates that smart TVs are what’s grabbing the interest of consumers right now.

Even that report points out that smart TVs won’t deliver the killer blow to 3-D. As smart TVs are punched up with even more features — from apps to motion remotes to voice-command capabilities — more middle-class households looking to purchase smart TVs may buy in to 3-D, whether they’re actively looking for it or not.

Whether consumers actually want to sit in their living rooms and wear 3-D glasses to watch TV remains to be seen. For now, TV makers will still insist that they do.

MORE CES NEWS:

• Complete coverage
• HP’s Former CTO: Ultrabooks Are Nothing New, webOS Still Has Life Yet
• Walt Shows Off CES Gadgets for Fox Business News (Video)
• What Kind of Web Video Plans Does Sony Have? (Video)
• Fujitsu Seeking Way Into Crowded U.S. Smartphone Market
• Why Rhapsody Is (Probably) Bigger Than Spotify — In the U.S.
• Microsoft Beefing Up CeBit Presence Even as It Pulls Back on CES
• Inside the CES Lost & Found
• FCC Chairman Has New Tablet, but Same Script: More Spectrum!
• Verizon Wireless: We Want to Connect Five Devices for Every Subscriber
• Ultrabooks From HP and Lenovo That Are (Kinda, Sorta) Different
• Walt and Katie Take a Tour of CES (Video)
• Schmidt-Storm Alert: The Google Chairman Didn’t Like Your Question
• T-Mobile Expands Bobsled Messaging Service
• Intel Shows Just How It Plans to Get Into Phones (Video)
• Motorola CEO: We’re Going to Release Fewer Phones This Year
• Kinect Helps Keep Aging Xbox at the Top of Its Game
• More From T-Mobile CEO: On Pricing, LTE and That Ever-Elusive iPhone
• Exclusive: New Boss Acknowledges Windows Phone Still Has “Awareness Problem”
• And You Thought Jawbone UP Was Going to Miss the CES Party!
• Interview: T-Mobile CEO Says No Second AT&T Deal Out There
• Grover Is at CES and I Am Missing It
• BlueStacks Bringing Android Apps to Windows 8
• Why the Future of TV Won’t Be Here Soon
• Nvidia’s Tegra 3 Tries to Save Battery in All Sorts of Different Ways
• Dynamic Dual Coverage: Ballmer’s Last Act in Vegas and the BCS Championship in 3-D
• Microsoft Phoning In Its Last CES Keynote
• Myspace — Yes, Myspace — Says It’s Going to Sell You Web TV
• Samsung Unveils “Super” 55-Inch OLED TV
• Nokia Unveils That LTE Windows Phone It’s Been Dying to Share
• Steve Ballmer Gives Ralph De La Vega a Very … Vigorous Greeting (Video)
• Interview: AT&T’s De La Vega on LTE, Tablets and Life After T-Mobile
• AT&T’s De La Vega: Shared Data Plans Still in the Works
• LG: 55-Inch Glasses-Free 3-D Screen Is on the Way
• LG Pushes 4G Smartphone Through Verizon: The LG Spectrum
• Live: AT&T’s Vegas Act Stars LTE and, Making Her Return to the Stage, Nokia
• CES Notebook: The Constant Search for Power and Vegas’ Worst-kept Secret
• Belkin Bringing Mobile TV to Lots of Cellphones, Will Anyone Tune In?
• Acer Introduces “World’s Thinnest” Ultrabook and a “Me-Too” Cloud Service
• There Better Be Some Cool Stuff at CES, Because CE Holiday Sales Data Bytes!
• CES 2012: Snooki and Bieber Are In, Gaga Is Out!
• Coming to a Smartphone Near You: Gorilla Glass 2
• RIM Hopes Next PlayBook OS Will Impress at CES
• Ultrabooks, the Ultra-Fancy New Name for Laptops
• At CES, Expect More Gadgets Telling You to Get Off the Couch
• Intel to Detail Its Phone Plans at CES Next Month
• Microsoft Pulling Out of CES After Upcoming Show
• Intel to Detail Its Phone Plans at CES Next Month
• Dell Will Drop the Flashy Vegas Act for CES This Year
• Ultrabook Conga Line Preps for CES 2012

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.

If you’re reading this site, you know who all of these folks are. But just for formality’s sake:

Jason Kilar is CEO of Hulu, the video joint venture co-owned by Comcast, Disney and News Corp.’s broadcast TV units. The site has been a huge hit with viewers and subscribers, who have put it on pace to generate $500 million in revenue this year. But its owners aren’t quite sure what to do with it: They put it up for sale this summer, then decided to hang on to it after all. This will be Kilar’s first major public appearance since that tumult, so we’ll have plenty of questions.

Dick Costolo is CEO of Twitter, which has moved from Web oddity to a service used by more than 100 million people a month. Twitter’s founders didn’t like the notion of turning their baby into a media company, but that’s exactly what Costolo is trying to do now; he is ramping up efforts to attract more eyeballs and sell more ads. And he’s leaning heavily on big media companies — especially TV networks and movie distributors — to make that happen.

Martha Stewart is the founder of Martha Stewart Living, the multimedia empire she built from scratch, which now includes magazines, TV shows, a Web site and multiple lines of branded goods; her newest coup is a big-dollar deal with J.C. Penney. She’ll be joined onstage by Lisa Gersh, the president and chief operating officer Stewart brought in from NBC Universal nearly a year ago. At NBC U, Gersh had overseen the acquisition of the Weather Channel, among other duties; she had previously been chief operating officer at Oxygen Media.

They’ll join a lineup that includes ESPN President John Skipper, YouTube CEO Salar Kamangar, Viacom CEO Philippe Dauman, New Yorker editor David Remnick, Warner Music Chairman Edgar Bronfman Jr., News Corp. Chief Operating Officer Chase Carey, Clear Channel CEO Bob Pittman, Legendary Pictures head Thomas Tull and Vevo CEO Rio Caraeff. And we may still have a surprise or two between now and the end of January.

All Things Digital’s first-ever media conference runs Jan. 30 and 31 at the Ritz-Carlton in Laguna Niguel, an hour south of Los Angeles. See you there.

Greenfield, a very sharp media analyst at BTIG, says that 2012 will be the first time we’ll see a true “virtual” cable-company offering in the U.S., where consumers can subscribe to TV delivered over the Web. This is different than the on-demand services that currently exist, like Netflix and Hulu, which offer up programming that’s already been on TV. This will give you access to “real” TV, in real time.

His summary: “While [quality] will not match what you are accustomed to from your traditional [cable provider] (due to Internet congestion), virtual MSO pricing to the consumer will be substantially lower, subscribers will receive a significantly better user-interface/navigation across a wide-array of IP-enabled devices in the home and service will be accessible anywhere in the US, rather than being stuck in a certain region.”

Who/what/where/when? Greenfield’s prediction post (registration required) doesn’t commit to any of that. But it does sketch out the basic “how” framework:

• The “virtual” cable company will have to cut distribution deals with all or most of the big TV channels/programmers, just like the satellite TV guys did in the ’90s. It’s possible that some of the programmers won’t want to play along, for fear of upsetting their existing deals with the cable guys. But just like in the ’90s, as long as the “virtual” company is paying market rates (and likely higher) for the programming, the cable guys can’t really do much about it. (And if they do, they’ll have a lot of explaining to do in Washington: Note that when the Feds blessed the Comcast/NBC deal this year, they required the company to make its programming available to this kind of competitor.)
• All those deals mean that this won’t be “a la carte” cable, where you can get ESPN but not the Disney channel, or vice versa — these will be all-or-none deals.
• And all of the above means that you won’t be getting these channels for next to nothing. Greenfield figures the pricing will be “substantially lower” than what the cable guys currently charge. But since he assumes that the “virtual” cable guys will have to pay at least $40 a month per subscriber for the programming, it’s going to cost at least that much for consumers — he envisions the new guys selling this stuff at “razor-thin” margins, but not at a loss.
• Getting your TV programming from a “virtual” cable company doesn’t mean you’ll be able to tell Comcast or Time Warner Cable, etc., to pound sand — you’ll still be paying them, or someone, for broadband. Greenfield thinks this could actually be a good thing for the cable guys in the long run, because the margins on broadband are much better than in the TV business. And they’ll probably be able to force many customers to upgrade their broadband subscriptions to a higher tier, so they can stream all of that video.

OK. So who might do this?

Greenfield runs through a laundry list of every potential player, including Amazon, Apple, Google and Microsoft, even Wal-Mart. I assume that the most logical step would be for someone who’s already in the video business, but with a limited footprint — like Verizon or Dish Network — to try this out.

But over the phone this morning, Greenfield said he thinks the first player will be someone who’s not in there already, but wants to build another platform that gives them direct access to millions of consumers. Start speculating now!

The free update will allow users to control the console using their voice and gestures, or even their Windows Phone (if they have one).

In addition, Microsoft will begin to add more than 40 content providers to the console to increase the catalog of live and streamed TV, movies and music.

Microsoft has announced nearly all of these details previously, including some of its content partners, so today’s announcement serves as a reminder now that the final product is ready to go.

Last week, I met up with Michael Suraci, Xbox’s director of marketing, to get a preview of the updates.

According to Suraci, Kinect, the motion sensor that launched last year, is a central part of the update. When it was introduced, it seemed that all it was good for was dance games, but clearly Microsoft had much bigger plans for the camera and the microphone.

Now users can speak naturally to the Xbox, which tears down a number of barriers to family members in the household that weren’t comfortable with the clunky controller. If Microsoft pulls it off, it could teach people that televisions are meant to be talked to, just as Apple has taught people that screens are meant to be touched.

An unknown subset of the nearly 60 million Xbox owners worldwide that have purchased Kinect will be able to use all the new features in the update.

But everyone will have access to many of the updates.

One major improvement is in navigation. For example, the old interface required the user to decide which category they wanted to go into. For example, games, video or music. Then, they had to choose the application, like Netflix, ESPN or Zune.

In the new user interface, the person can search across all of the categories and apps.

As Suraci demonstrates in the video, a user can say: “Xbox: Bing, ‘Fast and the Furious.’”

The results show all of the content that matches that criteria across games, music, video and other categories. The style of the user interface will be recognizable to anyone using a Windows Phone. The format will also be carried over to the upcoming Windows 8 update.

During Suraci’s demonstration, the software got confused a couple of times, but still, searching by voice will be much faster than typing in a string of words, letter-by-letter, using the controller to scroll through the alphabet.

Going forward, the Xbox could replace the need for a second set-top box in the household, but as Peter Kafka has mentioned before, it’s not a service for customers looking to cut the cord. In order to stream live TV, or watch movies, you’ll either have to pay for a subscription — like Verizon FiOS or Comcast’s Xfinity — or pay a la carte.

On Tuesday’s launch, the amount of content that will be available in the U.S. will be somewhat disappointing. But later in December and in early 2012, you will start to see integrations with Verizon FiOS, YouTube, HBO GO and Xfinity On Demand, TMZ, UFC, Wal-Mart’s Vudu service and others.

]]> http://allthingsd.com/20111204/heres-how-microsoft-is-adding-voice-control-and-gestures-to-the-xbox-video/feed/ 0 http://allthingsd.com/20111201/videogame-consoles-still-selling-like-hotcakes-but-how-much-life-is-left-in-the-aging-hardware/ http://allthingsd.com/20111201/videogame-consoles-still-selling-like-hotcakes-but-how-much-life-is-left-in-the-aging-hardware/#comments Thu, 01 Dec 2011 14:30:29 +0000 Tricia Duryee http://allthingsd.com/?p=148663 Microsoft’s Xbox and Nintendo’s Wii sold in record numbers last week as Americans kicked off their holiday shopping.

Experts Give the New Xbox Raves for Control, Creativity
(Dec. 6 2001)
Photo: Mario Tama/Getty Images

Microsoft sold more than 960,000 consoles last week, with a majority flying off the shelves within a single 24-hour period.

Nintendo also said the Wii had the biggest Black Friday ever, selling more than 500,000 units on the day after Thanksgiving.

At one point during the shopping madness, a shopper pepper sprayed a crowd at a Wal-Mart to get her mitts on an Xbox (although reports now say police are investigating the incident to determine the cause of the attack).

Sony declined to release sales figures for the PlayStation 3 last week, but it is likely benefiting from a recent $50 price cut.

Such strong sales are mind-blowing.

People are lining up for — and in some cases fighting over — hardware that is five to six years old. It’s difficult to imagine any other consumer hardware that could attract that kind of demand after such a long period of time.

All three are nearing the end of their life cycles. The Nintendo Wii and PlayStation 3 are both five years old, and the Xbox 360 is a year older.

Nintendo announced that it will release a new console, the Wii U, later next year. Microsoft and Sony have not said anything official, but they are both expected to follow with competing launches in the same time frame.

It has long been a pattern for all three rivals to release new hardware at the same time. A European PlayStation executive recently hinted that Sony’s plan was to continue that trend because it was “undesirable” to be significantly later than the competition, according to IndustryGamers.com.

Despite the odds, there are at least three reasons why sales continue to do well.

The lineup of games is as strong as it has ever been for the consoles; all three have tried sprucing up the hardware with accessories and adding downloadable content; and, finally, consumers don’t have a choice — the only alternative is to wait another year.

First, the games: This year, publishers waited until now to release some of the hottest titles of 2011; hardcore gamers in particular will have their choice of any number of blockbuster hits.

Activision’s Call of Duty game is already a runaway success, grossing $775 million in the first five days it was available, to shatter all entertainment records.

Also in the hardcore genre is Electronic Art’s Battlefield 3, Ubisoft’s Assassin’s Creed, PlayStation’s Uncharted 3 and Rocksteady’s Batman: Arkham City, which are all going head to head this holiday season.

But the consoles don’t just serve the hardcore genre anymore.

Last year, both Sony and Microsoft released motion-controlled gaming systems to rival the Wii’s technology, which has always been considered more family friendly and easy to use.

This holiday season, Sony and Microsoft are offering the most games ever for the Move and Kinect, respectively. Microsoft will have 75 new Kinect games available for the Xbox this holiday, four times last year’s number. Sony said the PlayStation Move is expected to launch 26 titles.

In addition to being used to play games, the consoles are turning into entertainment systems for the living room.

It started with the ability to use the Internet-connected boxes to stream Netflix to TV screens. Now the consoles are turning into media hubs, playing video, music and other content that is readily available over the Internet.

Microsoft and Sony have made entertainment a particular focus between their respective online networks, Xbox Live and PlayStation Network.

Microsoft will make a huge push on Dec. 6, when it rolls out a free update to Xbox Live. Users will be able to conduct a Bing search to find games, music and video across several providers. To make it even more family friendly, the Xbox Live user interface will be controlled with voice commands, rather than by the game controller.

By the end of the year, Microsoft expects that nearly 40 TV and entertainment providers — including Comcast, Netflix, Hulu, ESPN and HBO GO — will be available on its system.

All of these reasons added up could keep the pedal on the gas for what in any other segment would be considered ancient technology.

In an interview, John Koller, director of marketing for Sony’s PlayStation, argued that there’s a lot left in the current generation of consoles.

As an example, he said its predecessor, the PlayStation 2, is 12 years old, but continues to be used in homes around the U.S. as a game player and DVD player. Similarly, the PlayStation 3 substitutes as a Blu-ray player.

Overall, the PlayStation 2 ended up reaching nearly half of all U.S. households.

If that can be used as a guide, then the PlayStation 3 still has a very long way to go. In fact, the goal may be unattainable if new hardware is coming around the corner.

To date, Sony has sold 18.7 million PlayStation 3’s in the U.S. That makes up just a fraction — less than 17 percent — of the 112.6 million households, according to the most recent U.S. Census Bureau figures.

“We are nowhere near where we could be,” Koller admits.

Next year, the true testament will be how the hardware sells as we get closer to the release of Nintendo Wii U and consoles.

]]> http://allthingsd.com/20111201/videogame-consoles-still-selling-like-hotcakes-but-how-much-life-is-left-in-the-aging-hardware/feed/ 0 http://allthingsd.com/20111201/introducing-lauren-goode/ http://allthingsd.com/20111201/introducing-lauren-goode/#comments Thu, 01 Dec 2011 14:00:44 +0000 Walt Mossberg and Kara Swisher http://allthingsd.com/?p=147971

We are thrilled to welcome another strong reporter to the AllThingsD team: Lauren Goode, who will cover consumer tech products and issues. She’ll be based in New York.

Lauren comes to us from the digital arm of our sister news organization, The Wall Street Journal, where she was a video producer and reporter, from 2008 to 2011. She helped launch the Journal’s live-streaming video programming and produced and co-hosted the daily “Digits” technology show, which regularly features our ATD staff along with Journal reporters and editors. (We hope to see her there from time to time as a guest herself now.) She was also a contributing writer to the Digits blog on WSJ.com, and wrote posts on consumer technology products.

Prior to joining the Journal, Lauren worked in cable television from 2003 to 2008, producing and writing shows for A&E Television Networks’ award-winning “Biography” series, after having started her career as a production assistant at ESPN in New York.

The addition of Lauren to AllThingsD is just the latest move in an expansion that has seen our staff more than double in the past year, including adding new reporters, editors and developers. This has allowed us to broaden and deepen our coverage, to break more news and also to begin doing different types of stories than many other blogs offer, such as our recent series on Facebook’s smartphone effort.

We have more new coverage and staff expansions planned, so stay tuned. And, as always, thanks for your readership, which has been increasing strongly quarter after quarter. We aim to keep earning your loyalty and trust.

Going forward, Lauren can be reached at lauren@allthingsd.com, and you can read more about her bio and ethics statement here.

– Walt & Kara

]]> http://allthingsd.com/20111201/introducing-lauren-goode/feed/ 0 http://allthingsd.com/20111129/game-on-espns-new-boss-john-skipper-debuts-at-d-dive-into-media/ http://allthingsd.com/20111129/game-on-espns-new-boss-john-skipper-debuts-at-d-dive-into-media/#comments Tue, 29 Nov 2011 13:30:51 +0000 Peter Kafka http://allthingsd.com/?p=148002 Time to introduce another D: Dive Into Media speaker, and this one’s very timely: John Skipper, the new head of cable sports giant ESPN.

Disney CEO Bob Iger tapped Skipper to take over his company’s most important asset just a week ago. But Skipper, who had been ESPN’s content boss, has been a rising star there for years, hopping from print (!) to the Web to TV programming. We’ll have his first onstage interview in his new role.

At a time when the value of Big Media’s content is in flux, ESPN’s lock on sports — DVR-proof, pirate-resistant programming that draws mass eyeballs in a niche age — is more valuable than ever. Can Skipper keep it that way?

We’ll ask him in January, as he joins a lineup that includes: YouTube CEO Salar Kamangar, Viacom CEO Philippe Dauman, New Yorker editor David Remnick, Warner Music Chairman Edgar Bronfman Jr., News Corp. Chief Operating Officer Chase Carey, Clear Channel CEO Bob Pittman, Legendary Pictures head Thomas Tull and Vevo CEO Rio Caraeff.

All Things Digital’s first-ever media conference runs Jan. 30 and 31 at the Ritz-Carlton in Laguna Niguel, an hour south of Los Angeles. See you there.

]]> http://allthingsd.com/20111129/game-on-espns-new-boss-john-skipper-debuts-at-d-dive-into-media/feed/ 0 http://allthingsd.com/20111010/playdom-readies-a-dozen-games-a-year-after-disney-acquisition/ http://allthingsd.com/20111010/playdom-readies-a-dozen-games-a-year-after-disney-acquisition/#comments Mon, 10 Oct 2011 13:00:49 +0000 Tricia Duryee http://allthingsd.com/?p=127869 After taking five months off from launching new games, Playdom has a dozen releases planned for the upcoming fiscal year, several of which will finally leverage Disney’s big brand names.

In an interview in Silicon Valley, Brad Serwin, the COO of Playdom’s social games unit, said the company has finally started to come out of hiding after being acquired for $563.2 million, plus a $200 million earn-out, more than a year ago.

One reason it took so long, according to Serwin: The general pains of integrating a small company into a larger organization.

Since the acquisition, Playdom has moved to new offices in Palo Alto, Calif., which it shares with Disney Mobile (which was formed through the acquisition of another Silicon Valley start-up, Tapulous).

Both have been learning to work with a parent company that is headquartered 350 miles away.

“A year after the acquisition, we are successfully transitioning into an operating division within Disney,” Serwin said. “We are 100 percent back to work.”

It took long enough, especially given the radical change the industry has undergone since Facebook launched its third-party application platform in May 2007. [More on how the industry has changed  in an interview today with Rick Thompson, a founder of Playdom.]

Since then, games have become the most popular applications on the platform, and have evolved from simple and inexpensive time killers to graphically rich applications.

Facebook has changed the rules, too.

This has impacted everyone in the space, not just three-year-old Playdom. Two of the biggest challenges emerged when the social network shut down its viral channels: When it became difficult to acquire new users by posting messages on users’ pages, and when Facebook implemented Credits, a virtual currency that requires developers to cut Facebook 30 percent of all revenues.

Playdom execs believe the company has finally reorganized, and are planning on making a big splash in what many worried was a dead pool.

Of the dozen titles slated for the next year, two games will come as soon as this month, and up to three games — coming in January, March and August — will leverage Disney brands.

Playdom’s next game is called Secret Agent X. For now, it is only available in beta in some international markets, but it is coming to the U.S. in the fall. In the game, a player leads a dual life as an average citizen who at night becomes a secret agent, exploring new locations and completing missions with the help of high-tech gadgets.

In the trailer for the game, seen below, a suburban housewife manages to save the world, all the while keeping her cover by making sure dinner is on the table on time.

As the seventh-largest app maker, according to AppData, Playdom falls below Zynga, Electronic Arts and even such new entrants as Germany’s Wooga.

That said, Playdom’s recent launch of Gardens of Time was considered a breakthrough hit that used game mechanics rarely seen on Facebook. The social game falls into the category of “hidden objects,” where players try to find a list of items in a room, similar to “Where’s Waldo?”

The concept behind hidden objects is not new to gaming, but it is new to Facebook, and was recently identified as a niche worth pursuing. Today, Playdom’s game is garnering nearly three million daily active users, which registers slightly below Zynga’s new Adventure World.

Playdom hopes it will prosper by bringing new concepts to social gaming and also by leveraging Disney’s big brands to catch players’ attention.

As a recent test, Playdom renamed its game GnomeTown as Disney’s GnomeTown. Serwin said the game performed much better with the new name.

Playdom’s close competitor Playfish is also relying on the intellectual property of its parent company, Electronic Arts. It has seen its Sims Social title climb the charts to become the second-most-popular game.

On the other hand, Zynga, which is the largest social games maker, has made up all of its own properties, ranging from FarmVille to its newest property, Adventure World. More recently, it has used name-brand promotions within its games to garner attention, such as Lady Gaga in FarmVille, and more recently, Enrique Iglesias in CityVille.

“Competitors have chunks of IP, but we have a lot to choose from,” said Serwin, adding that it’s not as if Playdom alone needs intellectual property: “Everyone needs IP.”

Serwin said the Playdom division’s plan is to work closely with Disney; it has hired a liaison who works in Burbank every day to make sure Playdom’s plans are on course with what Disney has in mind.

Still, Serwin can’t deny that the lull in game making has dragged down the results of Disney’s Interactive Group. Disney reported $21 million in accounting adjustment in the third quarter and $34 million in the second quarter tied to Playdom alone, and the losses are expected to continue.

In the second-quarter earnings call, President and CEO Bob Iger tried to explain its multimillion dollar charges to analysts:

“We thought it would be wise to improve the quality of the games that we’re going to release. So, we took a five-month hiatus, which had not been planned, from releasing games, to build a higher-quality game, and then also to re-stack our technical capabilities to deal with volume or to deal with scale, which we are hoping to achieve.”

Iger declined to say when the group would hit break-even, but that it was expected to get into the black by 2013.

Iger gave Gardens of Time as an example of a game that is monetizing well. “We feel good about the direction of Playdom, particularly with this new hit game in the marketplace,” he said, adding that new games in the pipeline will be based on Disney, ESPN and Marvel brands.

It has taken more than a year, but Serwin believes Playdom is ready.

“We’ve made a connection with people at Disney to get it done,” he said. “Whether it should have happened faster or slower, I don’t know, but it’s happening and it’s great.”

]]> http://allthingsd.com/20111010/playdom-readies-a-dozen-games-a-year-after-disney-acquisition/feed/ 0 http://allthingsd.com/20111004/microsoft-puts-more-tv-in-your-xbox-as-long-as-you-keep-paying-for-cable/ http://allthingsd.com/20111004/microsoft-puts-more-tv-in-your-xbox-as-long-as-you-keep-paying-for-cable/#comments Wed, 05 Oct 2011 01:39:53 +0000 Peter Kafka http://allthingsd.com/?p=128657 Microsoft is readying a long slew of announcements for tomorrow about new features it will cram into its Xbox, according to people briefed on the company’s plans. Of interest to many of you: The ability to use the game system as a cable box/streaming video service.

Which sounds cool!

But let’s be clear about what this is: An extension of the “TV Everywhere”/“authentication” concept that lets cable subscribers watch programming via alternate delivery systems.

And let’s be clear about what this isn’t: A tool for cable cord cutters or cord shavers.

Bloomberg laid most of this out last month in a story previewing tomorrow’s announcement. Steve Ballmer has been “promoting the Xbox 360 console as a way to switch easily between games, DVDs and pay TV” — not as a way to ditch cable. Which is why cable providers and programmers like Comcast and Verizon are working with him.

Another way to think about it: Look at the iPad and iPhone apps we’ve already seen from the likes of Comcast, Time Warner Cable, Cablevision and ESPN. They let subscribers watch some (though usually not all) of what they can get from their various cable packages on a different device. The Xbox deals should work the same way.

A more direct analogy: This will be an extension of deals Microsoft has already put together with the likes of ESPN, which gives some cable subscribers access to the network’s ESPN3 digital channel via their game boxes. (UPDATE: Readers note that the ESPN3-Xbox deal doesn’t require a cable subscription, but a broadband Internet subscription from particular providers. So it’s theoretically possible for an Xbox owner to get Comcast broadband — but not cable — and still get sports beamed to his TV.)

There’s always a miniscule chance that one of Microsoft’s partners will stray way outside the reservation and actually offer cable-like programming without requiring a cable subscription. One day, for instance, I could see Time Warner finally giving its HBO unit the go-ahead to start selling a la carte subscriptions to the pay service, at the same rates that it’s charging the cable guys.

The cable guys wouldn’t like it, but they didn’t like when HBO, et al, did the same with the satellite guys in the ’90s. There’s not much they can do about it.

But given that Time Warner CEO Jeff Bewkes is the chief proponent of the cable-protecting “TV Everywhere” plan, I don’t see it happening anytime soon.

More tomorrow, once Microsoft makes it all official.

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