After parting company with Fox News last year, Mr. Beck took his message of outrage and self-reliance online. He launched an Internet video network called GBTV, where he is on air for two hours a day, alongside six more hours of shows, from “Liberty Treehouse,” a history and news program for children, to the reality program “Independence USA,” where a family explores life off the grid.

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That battle between the old and new ways of watching TV is putting networks and studios in a tricky position — balancing a new, growing online market for shows with a traditional market that is facing new threats and still accounts for the lion’s share of revenues.

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But there’s at least one big, dirty exception.

Time Warner Cable said yesterday that its video-on-demand business dropped significantly in the last quarter. Asked to explain where the drop came from, CEO Glenn Britt came clean, more or less — much of it is because, instead of renting “3 Way Cheating Wives” in HD for $9.98, his customers are getting their fix on the Web for free.

There’s something quite special about listening to buttoned-down corporate chieftains talk about their porn-profit margins. If you ever get the chance, you really should hear for yourself. But this excerpted transcript will have to do for now:

One of the things going on with VOD is that there’s been fairly steady trends over some time period now for adult to go down, largely because there’s that kind of material available on the Internet for free. And that’s pretty high margin. That’s been not just this quarter, but going on for some time period.

To be fair, drooping porn rentals don’t account for all of Time Warner Cable’s VOD decline. CFO Rob Marcus said the porn gap is responsible for about a third of the drop, and that the rest is because there weren’t many big pay-per-view events like boxing matches last quarter, and because regular movie rentals are down, too.

Ah. So maybe iTunes and Netflix, et al, are taking dollars away from cable, right? After all, Time Warner Cable video subscriber totals dropped last quarter, again. “I wouldn’t draw any conclusions quite yet,” Marcus says.

Competitors have complained that the combined powerhouse could stunt the Internet video industry’s growth.
During its eight-month review of the roughly $13.75 billion deal, the agency’s antitrust division has become interested in finding out whether Comcast and other cable and satellite giants are trying to lock up distribution rights to television programming on the Internet, which would block potential competition, according to people familiar with the matter.

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Now, two more set-top boxes have been launched to try to marry the Internet and the TV. Both adapters, from Sony (SNE) and Roku, worked well in my tests, but each has limitations. The problem is that one of the boxes supplies content from a wide range of Internet video sources, but only works on selected models of one brand of TV set; the other works on a wide variety of TVs, but only provides a single source of content.

Sony’s adapter is the Bravia Internet Video Link. This is a $300 module that attaches to certain Sony HDTV models. It can either be set up beside the TV or snapped onto the back of the set. Once it’s connected to your TV and to your home network for Internet access, a new menu appears on the TV allowing you a choice of videos from numerous online sources, including YouTube, Yahoo (YHOO), Blip. TV, Sports Illustrated, AOL, Wired, and the Web sites of CBS (CBS), Showtime and more.

Setting up the Bravia Internet Video Link was straightforward, even though it involved a welter of cables. There is no built-in Wi-Fi — you need either a cable or an add-on wireless adapter to connect to the Internet. The primary hookup to the TV is via a modern type of cable called HDMI, for High Definition Multimedia Interface.

I tested the Sony Link using the company’s most unusual HDTV set — a tiny, very costly model that uses a very thin, very vivid new screen technology called OLED, for Organic Light-Emitting Diode. This TV provided a spectacular picture, but it isn’t required to use the Sony module. The Link works on many larger, more common Sony sets with more common screens. It just doesn’t work on non-Sony TV sets.

Sony’s Bravia Internet Video Link adapter

The Sony module doesn’t have its own remote control. It uses the one that came with the TV. This makes for an awkward experience, because there are no standard play and pause buttons, and various other buttons on the remote meant to do one thing on the TV may do another when watching Internet video via the Link module.

Also, I found some of the Internet content to be disappointing. Many of the items labeled “movies” on various Internet channels were really just trailers, and some content was stale. For instance, some baseball news videos on Yahoo were weeks old.

However, Sony plans to make one of its feature films, “Hancock,” available through the Link module before it’s released on DVD. More important, it will be adding access to Amazon’s (AMZN) forthcoming video-streaming service, which promises to contain a wealth of full-length content.

The Netflix Player by Roku is much simpler. In fact, it was the simplest set-top box I have ever tested. It costs just $100 and does just one thing: It allows Netflix (NFLX) subscribers to view its movies and TV shows via the Internet on a television set instead of on a computer. It can’t get you any other video content from the Internet.

The Netflix player is a small, plain black box that works with most TVs, not just digital or high-definition models. It connects using both old-fashioned cables, like the kind used by many VCRs and older DVD players, or an HDMI cable.

Unlike the Sony, the Roku box includes both wireless and wired Internet connectivity, and has its own remote. While the box is capable of displaying high-definition content, the Netflix service isn’t currently streaming movies and TV shows in high definition, so you get varying quality, depending on your TV and Internet speed, up to DVD-type levels.

There’s no added monthly fee required to use the Roku box, but you must be a Netflix subscriber. The box merely displays the movies or TV shows you have placed in your Instant Queue on Netflix. You have to do this on your computer before viewing the videos on the Roku box. You can choose from around 12,000 streaming movies and TV shows, far fewer than the 100,000 titles Netflix makes available via DVD, but a sizable collection.

In my tests, the Roku box set up quickly and easily, the interface and remote were simple and effective, and the movies and TV shows I tested streamed quickly and without hesitation over my fast home Internet connection.

Both products are meant to promote sales of other things — Sony TVs and the Netflix movie-rental service. They do these tasks well, but neither is the breakthrough solution that will connect most TVs to most Internet video content.

Find all of Walt Mossberg’s columns and videos online, free, at the All Things Digital Web site, walt.allthingsd.com. Email him at mossberg@wsj.com.

In May, Nielsen reports, the average American watched 127 hours and 15 minutes of television, which comes to something just over 4 hours a day. That’s up 4 percent from 121 hours, 48 minutes in May 2007. There are some signs of change elsewhere in the data, however. Those figures include a jump in time-shifted TV to 5 hours, 50 minutes, from 3 hours, 44 minues, an increase of 56 percent. Average Internet usage increased to 26 hours, 26 minutes per month, up 9 percent from 24 hours, 16 minutes last May. The average American watched 2 hours, 19 minutes of video on the Internet in May; mobile video subscribers watched an average of 3 hours, 15 minutes on their devices in May. (Nielsen has no year-ago data on Internet video or mobile video.)

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