They shouldn’t be.

Pandora has always been up front about the fact that royalties are its biggest expense. And that those fees increase in lockstep with the music service’s popularity.

But while spending half of every dollar it brings in on royalties is a burden, it could be worse. A lot worse.

Prior to the summer of 2009, when Pandora and other Web services negotiated a new royalty deal, Pandora’s music bill was more than 100 percent of its revenues.

Check out this table from Pandora’s S-1, which breaks out each line item in its P&L as a percent of revenue. Notice how brutal the first two quarters of 2009 were. And see how much more tolerable (or at least less awful) they became after July 2009, when Pandora got its new rates (click image to enlarge):

See? Now 50 percent doesn’t look that bad.

And while Pandora’s music fees are hefty, the system that generates those bills is really one of the company’s strengths.

That’s because unlike other music services, from Apple’s iTunes to Spotify, Pandora doesn’t have to negotiate with individual labels and publishers to use their stuff.

Instead, it takes advantage of a U.S. law that created a “compulsory license” for Internet radio. That allows anyone to stream any recorded music they want, as long as they’re willing to pay for it. And as long as they’re functioning as a “Webcaster” and not an on-demand “interactive service.”

The advantages of using the compulsory license are huge. It means Pandora never had to ask the big labels for permission to use their stuff, or pay out giant advances or equity stakes to get a deal done.

While the licenses do come with restrictions–that’s why Pandora doesn’t let listeners request individual songs, and limits the number of times users can skip a song per hour, etc.- they haven’t dissuaded some 80 million people from using the service.

Those licenses don’t exist outside of the U.S., which is one reason Web radio services are such a rarity everywhere else, and why Pandora may struggle with international expansion.

And the fees that Pandora does pay will escalate each year until 2015, when it has to negotiate a new royalty agreement with the music industry.

It’s always possible that the rates will get significantly worse for Webcasters then, and that Pandora ends up in the shape it was in prior to the summer of 2009.

But for the next four years, at least, Pandora thinks it can work with the music bills its users are generating. Now we’ll see if investors agree.

That’s my translation of comments from Turner Broadcasting’s Phil Kent today. The head of Time Warner’s cable network told the crowd at a Citigroup investment conference that his company had pulled out of bidding for reruns of “Modern Family” because the show was “a little too prevalent on the Internet.”

The sitcom runs on both ABC.com and Hulu, so I’m not clear if Kent was talking about one or the other, or both. Either way, those comments have to simultaneously please and dismay “Modern Family” creator Steve Levitan, who has complained that giving away streams of his show on Hulu doesn’t do him any good and probably does him harm.

Levitan isn’t the only one who thinks that way: There are plenty of TV people who worry that free streaming on the Web is hurting their business, either by sapping ratings or cutting down on the appetite for DVDs and syndication. In this case, the supposed value shrinkage hurts News Corp., which produces the show and owns the rerun rights, more than it does Disney’s ABC, which airs the initial run. (News Corp. also owns this Web site.)

That’s one of the fundamental tensions Hulu has to deal with, and the primary reason why taking the joint venture public remains such a long shot–until all of its owner/partners are willing to make long-term programming commitments to the site, it’s hard to see the long-term value in the company.

Still, it’s important to note that Kent didn’t abstain from bidding–he simply dropped out. The Los Angeles Times’ plugged-in Joe Flint estimates that Turner was willing to pay about $1 million per episode, which isn’t as much as the winning $1.4 million bid, but isn’t immaterial, either.

Oh. And the winner of the bid? GE’s NBC Universal–one of Hulu’s three owner/partners.

A lot of video! AOL says that 5Min’s library and distribution deals, along with its existing video offering, gave it a total of 493 million video streams in October. Which is a pretty big number–and bigger than any other U.S. Web property except for Google’s YouTube.

Comparing AOL’s homegrown video with the stuff that 5Min offers–content other publishers (including CBS, Hearst and Scripps Networks) make that it syndicates out–isn’t apples and apples: Different video has different costs, and the amount AOL will be able to get for the stuff will vary widely depending on the property it runs on, and the real estate it gets there.

But making all of that work will now be Ran Harnevo’s responsibility. Harnevo ran 5Min up until the sale, and he has now been named senior vice president of AOL Video, a unit that didn’t exist prior to the deal. Harnevo will report to AOL content boss David Eun; he says that all 45 of his former 5Min employees are staying on at AOL, too.

Near term: Expect to hear more from the company about other partnerships designed to get high-quality video on the site, along the lines of deals it has already announced with Next New Networks, Vuguru and Electus.

A federal judge in New York has issued a temporary restraining order against FilmOn.com, which has riled up the U.S. TV industry for a couple of months. The four broadcast networks–News Corp.’s Fox, GE’s NBC, Disney’s ABC and CBS–had asked for the order on Nov. 9.

FilmOn argues that the U.S. copyright act allows it to redistribute broadcast programming; Ivi Inc., a Seattle-based company that offers a similar service, makes the same argument.

FilmOn offers a free service that’s supposed to work on conventional PCs, as well as on mobile devices like Apple’s iPad. As of Monday evening it wasn’t clear whether FilmOn had actually taken down the streams, or if the service was simply misfiring, as it has been prone to do.

UPDATE: Here’s FilmOn’s response, issued Tuesday morning:

FILMON.COM, INC. ISSUES RESPONSE REGARDING NEW YORK SOUTHERN DISTRICT COURT’S RULING ON CBS BROADCASTING, INC., ET AL v. FILMON.COM, INC., TEMPORARY RESTRAINING ORDER

Los Angeles, CA – November 23, 2010 –FilmOn.com Inc. CEO and Chairman, Alki David today issued the following statement regarding the ruling made by the New York Southern District Court, which issued a temporary restraining order, in effect pending the court’s decision on if it will issue a preliminary injunction.

“We respect the Court’s decision in this matter and have temporarily ceased retransmission of free network television on FilmOn. In the few weeks FilmOn provided free access to basic television on consumers’ mobile devices, it received more than 30 million individual users. We also garnered dozens of positive reviews about our free service’s quality and ease of use. We have, in essence, shown full proof of concept of the FilmOn delivery system–proving that millions of viewers will watch our superior television service online, all with commercials, adding millions of extra impressions that enhance network’s value to its viewers and advertisers.”

“FilmOn has succeeded in securing partnerships with several independent broadcast channels to be able to keep a compelling live offering online in the near future. Coupled with our own library of content and that of our partners, FilmOn will remain open for business. “

We do expect to bring the major networks back to our lineup in the near future, all in a legitimate and collaborative business model. We have already begun very positive discussions with TV networks affiliates and other content owners to provide our delivery service and measurement analytics to stream their live content online.

Scott Zarin, Zarin & Associates P.C., legal counsel for FilmOn added:

“In addressing FilmOn’s argument that it is exempt from copyright infringement liability as a cable system, the court indicated that it was not convinced–on the facts currently known to it–which this is the case. Although the court issued a Temporary Restraining Order, it is providing FilmOn with an opportunity to elaborate upon its ‘cable system’ argument more thoroughly in a hearing on the Networks’ request for a preliminary injunction.

“FilmOn will be drafting papers in opposition to the Networks’ motion for a preliminary injunction in the coming weeks, with which it expects to submit to the court the opinion of an expert on FilmOn’s technology in order to demonstrate that FilmOn is indeed a cable system. If FilmOn successfully opposes the Networks’ motion for a preliminary injunction, the court’s Temporary Restraining Order–which by law can only remain in effect for a short duration–will be dissolved.”

In a bit of coincidental timing, said Gnip CEO Jud Valeski, the filing for the round was posted yesterday on the SEC site (which is where I found it). He confirmed the round amount as $2 million, coming mostly from previous investor Foundry Group and including First Round Capital again. This brings the company to $6.6 million raised so far.

Gnip’s deal with Twitter finally brings pricing clarity to usage of Twitter’s data streams, at least for analytics and monitoring companies. The company has permission to collect significant revenue on the streams. Previously, Twitter’s only paid data option was the Firehose full stream of all user status messages, for which it charged different amounts depending on the size of the customer and what it was doing with the data. While Microsoft paid $10 million to incorporate the Firehose into its real-time search, some start-ups that create Twitter clients were getting the Firehose for free.

As I reported yesterday, Gnip will offer social media monitoring companies the Halfhose (50 percent of Tweets at a cost of $30,000 per month), the Decahose (10 percent of Tweets for $5,000 per month) and the Mentionhose (all mentions of a user including @replies and re-Tweets for $20,000 per month), with the caveat that they can’t publicly display the data.

Boulder, Colo.-based Gnip has gone through a big turnaround in the last year. In September ’09, it laid off seven of its 12-person staff, saying the huge increase in creation of social media data had overwhelmed the company’s self-built database and it needed to start over. In May of this year CEO Eric Marcoullier left the company, leaving it in the hands of his co-founder Valeski. Marcoullier, who had previously founded IGN and MyBlogLog, is now working on another start-up, the “Foursquare for Web sites” OneTrueFan.

But a deal with Twitter–a company that has historically expanded into its developers’ territory much to their dismay, rather than blessing third-party companies with partnerships–is a firm indication that Gnip is back on track.

You can get it right now, by heading to FilmOn.com, where you can get streams of several local L.A. TV stations, which means you can get whatever NBC, ABC, CBS and Fox are broadcasting. You can also get a few cable channels, like Time Warner’s CNN International, as well as a couple of porn feeds.

It’s incredibly easy, and it’s a very high-quality feed, with very little lag. This screenshot of NBC’s “Today Show” isn’t very exciting, but it is current–I took it a few minutes ago.

You can also get FilmOn via a conventional PC, but that requires a download, so it’s not quite as convenient. But it’s still very easy, and while FilmOn has said it would charge for the service, it’s free for now.

How is this possible? It shouldn’t be, according to the networks, who are suing FilmOn and founder Alki David. They’re also suing ivi.TV, which is doing something similar with feeds from Seattle TV stations.

Both FilmOn and ivi are arguing that they’re within their rights based on an interpretation of FCC rules that allow “secondary transmissions” of broadcast signals.

The networks, of course, will work very, very hard to shoot down that argument, for obvious reasons. Ivi and FilmOn have been out for several weeks, but a note from industry analyst Rich Greenfield (registration required) this morning is going to increase the attention the two companies have been getting.

Meanwhile, it will be interesting to see how Apple plays this. Steve Jobs has big plans for the TV business, but they generally involve working with the networks and studios so that they can charge money for their shows on his devices.

On the other hand, since FilmOn is getting to the iPad over the free Web, instead of an Apple-approved app, I’m not sure how Jobs could stop the transmission. Even if he wants to.

UPDATE: Ivi’s Hal Bringman wants us to know that in addition to Seattle, his service also offers streams from New York broadcast stations, and will start offering from L.A. this weekend. Up next–Chicago and Philadelphia. Bringman says his company also has an iPad app in the works, but that one will require a $4.95 monthly fee.

Here’s the email that Cablevision sent to its customer base last night, explaining how they can get legal streams of the World Series delivered to their homes on the Web, via MLB.com. It’s a fancier version of the message I delivered two weeks ago, except that this time Cablevision is promising to pick up the $10 fee, too:

Is anyone going to take Cablevision up on the offer? A note from RBC Capital Markets this morning guesses that perhaps 150,000 subscribers may go for it, which would generate a $1.5 million bill for Jim Dolan and company. I’ve asked Cablevision if it can provide any numbers for the offer, which kicked off last night before Game 1 of the Series. UPDATE: “Thousands” of customers have sent in receipts for reimbursement, says a Cablevision rep.

Of course, the real risk for Cablevision isn’t the one-time payout it may have to fork over. It’s that increasing numbers of consumers learn to live without cable and get their video fix over the Web.

But that’s a risk for Fox, too: Like all of the broadcast networks, it wants the cable guys to start paying it for its programming, and if people start cord-cutting in real numbers, then the cable guys won’t have much to hand over.

Which is why it’s surprising that this rights-fee fight has lasted as long as it has–there’s no ideological difference between the two sides here, only a money gap. But the longer it remains open, the more both sides have to lose. (Disclosure: News Corp. also owns Dow Jones, which owns this Web site).

But! It does give us the opportunity to rerun the “how to cut your cable TV” video and guide that Time Warner Cable helpfully prepared last year.

And this time the instructions will be particularly helpful to Cablevision’s customers who live exclusively in the New York area.

They’ll still be able to watch their smug, overpaid Yankees take on the Texas Rangers on cable today, since those games are being carried on Time Warner’s TBS.

But if News Corp. and Cablevision don’t settle by early Saturday evening, Cablevision subs won’t get Fox’s Phillies-Giants game (Halladay! Lincecum!) via their cable box tonight.

Which means they’ll need to either break out the rabbit ears for an over-the-air signal or break out their credit card and pay MLB.com, which is offering live “companion coverage”: $9.95 gets you streams for the rest of the playoffs.

Either way, they’ll want to review the instructions below. (Disclosure–News Corp. owns Dow Jones, which owns this Web site):

TV_to_PC_TWC –

The search giant now has permission from authorities to link Chinese users to an uncensored version of its site in Hong Kong, but its China operations are still at the discretion of the government, a fact which continues to cast uncertainty over its businesses and partnerships here.

Orca Digital Chief Executive Gary Chen said the company, which runs a free, ad-supported music downloading and streaming service in partnership with Google, saw a dip in traffic a few months after Google began automatically redirecting Chinese visitors to Google.com.hk in March. But the decrease wasn’t significant — just about five percent — Chen said, and the company is now serving seven million to eight million downloads and streams a day.

Read the rest of this post on the original site

That was fast!

So fast, in fact, that it had already happened before I typed my first post: GE’s (GE) NBC and News Corp.’s (NWS) Fox have been bumping up their ad load for some time. But now they plan to accelerate that push. Here’s Will Richmond of VideoNuze:

Fox – Fox has begun selling 2 ads per “pod” and when prior 1 ad/pod campaigns expire, this will become the standard according to Bill Bradford, Fox’s SVP of Content Strategy. The pods could include one or two 30 second spots or mix in 15 second spots as well. They could even be a single 60 second spot for sole share of voice…

NBC – NBC has been quietly selling 2 ads/pod online for the last year-and-a-half according to Peter Naylor, NBCU’s SVP of Digital Media Sales, who said that about 30% of its streams now carry 2 ads/pod…

[NBC's target is] 50% of streams carrying 2 ads/pod by the end of this year (it was just 20% a year ago). Peter said that all of NBC’s research shows that the relevant metrics – favorability, recall, purchase intent, etc. – are unaffected by doubling up. I asked Peter whether he could see more than 2 ads/pod at some point and he said NBC would rather see more creativity and interactivity in the ads than push the quantity up further.

So there you go. If you’re watching Web video–doesn’t matter if it’s on your browser or on Apple’s (APPL) iPad–expect to see more ads in exchange for the free content.

Of course, paying for it doesn’t mean you’ll get it ad-free, anyway: Hulu Plus will be serving up spots to its $10-a-month customers, too.

The joint-venture video site–owned by News Corp.’s (NWS) Fox, GE’s (GE) NBC, Disney’s (DIS) ABC and Providence Equity Partners–hasn’t uttered a peep about its finances until this week. But now Hulu wants the world to know it is making a profit and that ad sales are booming.

Hulu says it generated “over” $100 million in revenue last year and turned a profit in the last quarter of 2009 and the first quarter of 2010. The company says it will pass the $100 million figure by the middle of this year.

That revenue total is a gross number, so you can subtract more than half the amount from the top. That’s because Hulu gives anywhere from 50 percent to 70 percent of all ad sales to its content partners, who supply its programming. And bear in mind that the company is footing the bill for at least a billion video streams a month.

But I double-checked with the company, and when it says “profitable,” it means “profitable,” as in net income after all expenses, taxes, depreciation, etc.

So even if the number isn’t huge, a profit is well worth bragging about, because I can’t think of another Web video company that has claimed one so far. And that includes Google’s (GOOG) YouTube, for the time being.

What put Hulu over the hump? Getting CEO Jason Kilar to say anything of interest about his company is pretty much a futile exercise, but I tried anyway, and got this response: “We’re a distribution business. And a lot of that is a function of how you manage your business, and getting scale, and we’ve been very fortunate to achieve both.”

And that’s about as candid as Kilar gets in public.

The downside for Kilar is that his network owners are still not entirely comfortable with the company’s model, and are worried that all the free programming Hulu offers cuts into existing businesses. Hence, the push for a subscription plan, which, as I reported in February, will include an app for Apple’s (AAPL) iPad. More on that later.

Maybe, according to comScore: The Internet traffic counter says Americans’ appetite for Web clips actually shrank in January.

ComScore says 173.4 million people watched 32.4 billion streams that month. That’s down from 177.6 million and 33.2 billion respectively, in December.

A minor dip, to be sure. Bear in mind that the number of videos streamed is more than double the total we saw a year ago.

And maybe you can chalk the month-to-month drop on the Christmas holidays, which give people lots of downtime that they tend to spend on the Web.

Still, given that we’ve been consuming ever-increasing amounts of video for quite some time, it’s worth noting.

It’s also worth noting that comScore’s (SCOR) numbers don’t mean exactly what you think they do.

When comScore says that Hulu streamed 903,078 videos in January (down 10 percent from December), it doesn’t mean that Americans watched 903,078 shows. It means they watched some combination of 903,078 clips and advertisements, because comScore counts them both as streams.

In other words, a single episode of say, “The Daily Show,” could count as multiple streams, depending on the number of ads Hulu showed.

There’s nothing wrong with counting this way as long as we all know what the numbers mean. But comScore itself acknowledges that it’s confusing. And the company says it plans to break out ads and content at some point in the nearish future.

ComScore’s competitor, Nielsen, meanwhile, already distinguishes between the two. (If you want more on this, check out Hulucination, an awesomely obsessive blog by Big Money writer Chadwick Matlin).

Back to the numbers. Beyond the dip, pretty much the same thing we see every month: Hulu–owned by News Corp.’s (NWS) Fox, GE’s (GE) NBC and Disney’s (DIS) ABC–streams more video than anyone. Except for Google’s (GOOG) YouTube, which dwarfs everyone.

Meanwhile Vevo, the “Hulu for music videos” owned by two of the big music labels, shows up on the Top 10 list in its first full month of operation.

In other news: Did you know you can choreograph a figure-skating routine to “Smells Like Teen Spirit”?

Gillespie’s old unit, the CBS Interactive News Group, has been folded into a group with the company’s “business brands,” including BNET and MoneyWatch. Greg Mason, who was running the business group, now oversees the whole thing.

This one is literally old news, since it was announced internally all the way back on Jan. 26. But as you may recall, tech and business outlets were under a government mandate that week not to write about anything that wasn’t related to what we then called the Apple (AAPL) tablet. (Remember those days?)

The move would be bigger news if it augured a bigger shake-up at CBS’s digital side, especially since CBS Interactive head Quincy Smith has finally left the company to open up his own M&A shop. But CBS spokeswoman Sarah Cain says that’s not the case.

In a few hours, we’ll get a better sense of how CNET has performed for CBS (CBS) since the company acquired it in a $1.8 billion deal in 2008. CBS is set to announce Q4 earnings shortly, and estimates range widely depending on which analyst you listen to. Anthony DiClemente of Barclays Capital, for instance, thinks Interactive revenue will increase 10 percent, while the unit’s earnings will decrease by 8.8 percent; the consensus calls for an increase of 31 percent and a 36.2 percent drop respectively.

Meanwhile, for completists: Here’s Interactive boss Neil Ashe’s announcement explaining Gillespie’s move and the subsequent changes.

From: Neil Ashe
To: CBSi-ALL
Sent: Tuesday, January 26, 2010 1:15 PM
Subject: Tech, News & Business Announcement

Team:

We begin 2010 in an exciting position. Our brands are growing, and we continue to attract huge audiences and many of the world’s largest advertisers. As we look to the future, our focus remains on creating great content and experiences for our users, and great marketing solutions for our customers.

To that end, we are making changes today that streamline our division by bringing two business units into one. Tech & News and Business will now operate as a single business unit led by Greg Mason. Dave Morris will directly manage the sales organization for this new business unit while remaining in his role as Chief Client Officer for CBS Interactive. Joe Gillespie will work closely with me, Greg and Dave on making this transition a success. He’ll be with us until the end of March, at which time he has decided to leave the company to pursue new opportunities and his other interests, including a new appointment to the board of Jinni.com.

The creation of this new business unit will let us capitalize on the combined power of some of our biggest and most influential brands including CNET, CBSNews.com, CBS MoneyWatch, BNET, ZDNet and TechRepublic. It will also allow us to create better alignment between properties like CBS MoneyWatch and CBSNews.com where there are natural synergies between the content and audiences. This is good for CBS Interactive, as well as CBS as a whole.

For our marketing partners, this change helps simplify how clients work with us.  Individually, each business unit has seen great success cross-pollinating content and selling programs. Combined, we have the ability to do even more of these types of programs, but even faster and on a much larger scale. Dave will work closely with the sales team to create programs that take advantage of the combined power of these leading brands.  And of course, Dave will continue to be our primary representative in the marketplace for CBS Interactive as a whole.

Those of you that have worked with Greg know that he has an incredible track record of building and operating world-class brands, and repeatedly transforming businesses into success stories. He joined CNET Networks in 2000 and was instrumental in rebuilding our business after the bubble burst. He helped lead the charge to launch the Messaging Plus ad units in 2001, which put CNET Networks on the map in terms of industry leadership and innovation. From 2004-2007 Greg led CNET Content Solutions, which he transformed into one of our fastest growing and most consistently profitable businesses. Since 2007, Greg has been at the helm of our business portfolio, during which time he has launched two important new brands–BNET and CBS MoneyWatch, as well as led the continued success of our storied IT brands–ZDNet and TechRepublic.

Greg’s unique ability to manage large businesses, as well as infuse them with his entrepreneurial spirit will serve this new team well as we build upon our success and look to the future.

During his 6 years at CNET Networks and CBS Interactive, Joe has been a driving force in the continued success of CNET.  Under his leadership, CNET is recognized today as the #1 tech media brand in the world, and CBSNews.com became a site worthy of the legacy of CBS News. In 2008, Joe architected the complete relaunch of CNET, which has resulted in record traffic growth ever since. The site recently eclipsed 100 million users for 3 consecutive months (an all-time record). Early on, Joe initiated the use of video across the site, taking CNET beyond just product reviews and making it the definitive resource for people who love technology and want to get the most out of it. This vision also included broadening the coverage model with new content additions like Car Tech and Crave.

At CBSNews.com, Joe led a major site redesign, which has reinvigorated the site, driving growth and attracting new advertisers with a renewed focus on photos and original content. Since its debut in mid-June, unique users are up 22%, page views are up 12% and video streams are up 28%. Joe and his team were also instrumental in helping Katie Couric launch her online presence, executing her Campaign and Inauguration webcasts, and most recently the @KatieCouric webcast.

In addition to being a good friend, Joe has been an invaluable member of my management team and I want to thank him for all his contributions over the years. Please join me in wishing him all the best in his new endeavors.

I’m excited about the possibilities this new business unit creates for us. We’ve got great leaders in Greg and Dave, and world class brands with exciting opportunities in front of them. I know that this new, combined team will achieve great success and I look forward to a prosperous 2010 with the entire CBS Interactive team.

Best, NA

This year, says Barclays analyst Douglas Anmuth. He predicts that the video site will see revenue jump 55 percent, to $700 million, in 2010, and that it will “start contributing positively” to the Google’s earnings.

Why? Because YouTube is ginormous, of course. But also because the company has become more sophisticated about advertising. (Note that Google content guru David Eun said much the same thing when I talked to him last month, specifically citing the Google’s integration of DoubleClick).

Here’s the relevant part of Anmuth’s note:

Perhaps the main take-away for Google’s display business is that in 2010 we believe YouTube will start contributing positively to EPS. An improving advertising environment certainly helps, but with YouTube monetizing more than 1 billion video views every week, and with strong sell-out rates on its home-page from larger advertisers–we note 90% of the top 50 Ad Age have advertised on YouTube–we believe the site can profitably take share of the branded display & video market. We project YouTube to generate $700 million in revenue in 2010, up 55% Y/Y. Usage continues to grow. In November the total number of YouTube’s videos viewed grew 139% to 12.2 billion in November and unique visitors grew 32% Y/Y to 129 million. As a comparison, Hulu, the second most popular video site by videos viewed according to comScore, recording 923 million videos viewed.

Of course, the standard caveats that Google (GOOG) uses when people generate less flattering estimates for YouTube also apply here. It’s very difficult to get a handle on how many pages/views Google is selling and how much it gets for each one. It’s also tricky to guesstimate how much Google is spending to serve more than a billion video streams a day. So at best, this is an educated guess.

Still, it will be interesting to see if Google concurs with Anmuth. We’ll hear from Eric Schmidt et al in a week when the company reports fourth-quarter earnings.

What exactly did Adconion buy? Some of Joost’s technology, as well as its trademark, and about a dozen of the company’s remaining 25 employees, a spokeswoman says.

So what does that leave? Does any part of the original Joost survive as an operating company? “I believe so,” says the spokeswoman, who is going to get back to us about that.

Price? Your guess is as good as mine. But I’m guessing it’s not going to be very much, and nothing close to what investors like Sequoia, Index and Viacom (VIA) were hoping when they plowed $45 million into the company more than two years ago. Index, by the way, is also an investor in Adconion and led an $80 million C funding round in February 2008.

In any case, this is all a matter of “i” dotting and “t” crossing, as Joost has officially been in hospice mode since June, when the company laid off most of its employees and replaced CEO Mike Volpi. Prior to that, Volpi and his investors had been trying to broker a sale of the company, hoping that they could convince a big infrastructure player like Comcast (CMCSA) or Time Warner Cable (TWC) to bail it out.

No dice, though Time Warner Cable did end up hiring some technical help from Joost.

ADCONION MEDIA GROUP ACQUIRES JOOST ASSETS

New Capabilities Provide Advertisers, Content Owners and Publishers with an End-to-End
Cross-Channel Video Solution

SANTA MONICA, CALIF. – NOVEMBER 24, 2009 — Adconion Media Group (www.adconion.com), the largest independent global audience and content network, announced today that it has acquired certain assets from privately-held Joost, the online video service. Terms of the transaction were not disclosed.

“Video is a top priority for our company, and through the acquisition of the Joost assets we will be able to provide advertisers, content owners and website publishers with an end-to-end global video platform and cross-channel video and display ad-serving solution,” said Tyler Moebius, CEO, Adconion Media Group. “This acquisition immediately brings additional scale and content to the Adconion video pre-roll network for clients who are looking for a safe, cost-effective alternative to achieve the maximum value of online video advertising. We’ll also continue to operate Joost.com, providing clients with a destination site to showcase and distribute their branded entertainment content.”

In June, Joost announced a change in its business strategy to focus on providing white-label video platforms, and Adconion plans to pursue this strategy. On Friday, Adconion announced its first long-term licensing partnership as the exclusive display and video ad-serving solution for the Goldbach Media Group in Europe.

The acquisition of Joost assets adds many dimensions to Adconion’s existing video services and further will solidify its position in the online video and content syndication market. Prior to the acquisition, Adconion offered targeted distribution of content, including video and television commercials, to audiences around the world via Adconion.TV; as well as customized branded entertainment solutions for clients through its exclusive relationship with the digital studio RedLever. Through the Joost acquisition, Adconion.TV will add to its library of professionally-produced video content available for targeted pre-roll advertisements across 2,000 premium publishers.

Janus Friis, co-founder of Joost, said, “Over the past few months we have been actively exploring strategic options for Joost, and have concluded that the sale of certain of its assets to Adconion is in the best interests of Joost. Adconion has a strong technological platform and a compelling business model, and we believe that both businesses will benefit as a result of this acquisition.”

A leader in advertising innovation, targeting and distribution, Adconion reaches nearly 300 million unique users on a monthly basis. Prior to the Joost acquisition, Adconion was serving more than 80 million video streams per day to targeted audiences across 2,000 global websites.

Comcast did have reasonably good news to deliver this morning. It signed up more new customers than Wall Street expected, though it had to cut prices to do so. We’ll see if that mollifies investors, who really have been salty–look what’s happened to CMCSA shares since news of the GE (GE) transaction broke:

Since Comcast barely addressed the NBCU deal during its earnings call this morning, it had more time to tackle other topics. A recurring theme: How would increased Web video consumption affect the company?

The answer: No one knows, exactly.

On the one hand, there’s the threat that consumers will be less likely to pay for cable TV if they’re getting their shows over the Web, whether it’s through illegal streams or legitimate “over the top” services like the one Apple (AAPL) is trying to assemble.

That’s why Comcast CEO Brian Roberts described his company’s “authentication” efforts, which are in a beta test now but are scheduled to go nationwide next month, as an effort to make sure that people who consume Web video do so “in a way that secures the existing model.”

That is–he’d like them to keep paying Comcast for a TV subscription even though they’re watching shows online. Tough sell.

On the other hand, even if you stop paying for cable TV, you still have to pay someone to connect you to the Web, and it’s very likely that company will be Comcast. And if you’re not paying Comcast for TV, there’s a very good chance you’ll pay more for your Internet connection.

“I’ve been saying for a long time that I think video over the Internet is more friend than foe,” Roberts said this morning. Let’s see if Wall Street agrees.

Why? As research house Jefferies & Co. explains in a research note to clients today, if Twitter hasn’t yet managed to transform its popularity into significant revenue, how will Microsoft (MSFT) or Google (GOOG)?

“While we believe Microsoft pulled off a little bit of a media/PR coup by announcing the Twitter deal and forcing Google to rush into a similar deal, we do not believe Microsoft will be able to capitalize on its first mover advantage in the short run since neither search engines nor Twitter have figured out how to monetize the data streams from Twitters (affectionately known as Tweets),” Jefferies analysts wrote.

“We believe that users focused on real-time data would be less tolerant to advertising,” the research note adds. “That said, we can see new business models emerging down the line where the realtime tweets blended with local information (traffic conditions, flight arrivals, etc.) could be more easily monetized and where ‘premium’ tweets from celebrities could be included for a premium subscription. For now, the real-time data integration would mean more refreshes from the users to get up to the minute updates, which should translate into higher query volume, all else equal.”
 

The search giant is working on a new service that will provide searchers with streaming music, which sounds a whole lot like a content play at first blush. But Google will only be offering limited bits of music, and it will be relying on other companies to actually provide the tunes.

Sources describe the service, which they refer to as “One Box,” as a refined set of answers for music queries. The idea: Punch in, say, “Madonna,” and you’ll be presented with one or more songs, which may be partial clips or full-length versions, then guided to other sites where you can purchase the music.

That is: If you’re looking for Google (GOOG) to launch a rival to Apple’s (AAPL) iTunes or to music streaming services like iMeem and MySpace Music, this isn’t it.

In fact, Google is actually partnering, in a way, with News Corp.’s (NWS) MySpace: iLike, the music start-up that MySpace purchased earlier this year, is one of the two services providing music to Google, industry sources tell me. The other is Lala.com, which has a novel streams-plus-cheap-songs concept. (This is presumably one of the “big announcements” Lala founder Bill Nyguen was referring to yesterday when I spoke to him).

UPDATE: Streaming music service imeem will also be providing songs for the new service, I’m told by people familiar with Google’s plans. It’s unclear to me whether the company will provide full streams in search results. No comment from Google, Lala, MySpace or Imeem. Or the labels, for that matter.

At this point I’m not clear how Google and the labels will determine how much of a song a searcher will be able to listen to. Last I time I checked, iLike didn’t have the ability to provide full song streams at all. And Lala’s licenses only allow the service to provide listeners with a full song once–after that, they have to purchase the track from the service.

One other note: “OneBox” is the name of an existing Google feature that offers up not just links, but actual answers to certain queries. (Think of weather, or stock results). So while it’s possible that Google intends to brand the service with that name, I wouldn’t be surprised if this was the term the company has been using internally and with the labels, and that the service will have a different name when it launches.

TechCrunch first reported about the service this morning.

Check it out (click tables to enlarge):

Note that these numbers are actually all down from August. Apparently some of you spent your last days before returning to work or school in front of your Web browser.

Meanwhile, Nielsen’s Top 10 list has the usual suspects. That is–Google’s (GOOG) YouTube and then everyone else. Interesting to note the disparity between total audience and total streams on Hulu compared to Yahoo (YHOO) and Microsoft’s (MSFT) MSN. Hulu is attracting a smaller but much more engaged audience than the big portals.

At some point, this could be a problem for the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC Universal and Disney’s (DIS) ABC since advertisers ultimately want reach. But it’s still astonishingly early for the site–recall that it only went out of beta in March 2008, and doesn’t have a major portal promoting it.

One caveat: Note that for whatever reason, Web video publishers tend to push the numbers they get from comScore (SCOR) more than the Nielsen numbers. But directionally, they tend to say the same thing.

Allrighty, then. If you’re going to spend so much time watching Web clips, best to make sure you’re watching something excellent. Like this clip from last night’s “The Daily Show”–a classic evisceration of CNN. Jon Stewart and crew often go after the cable channel and its brethren, but this one is particularly good. Warning! It is more than 11 minutes long!

Depending on your perspective, this is either interesting news or heartening news: Michael Jackson’s funeral and memorial were indeed a giant Internet event. But they don’t seem to have been as big as Michael Jackson’s death, and they weren’t as big as Barack Obama’s inauguration.

So let’s call them the third-biggest Web event of the year. To date.

That sounds more like what I was thinking this morning: Everyone had to watch Obama’s inauguration or read about Jackson’s death, but not everyone felt compelled to see his burial or memorial.

It also explains why the Akamai people were so uncomfortable with my earlier reading of their traffic stats this afternoon, when I concluded that the events were responsible for the content delivery service recording more visitors per minute than any other time in the last year. Though I’d still love it if someone could explain why that did happen. (Jennifer? Anyone?)

Statistics are tumbling in from different sites and services (if you’d like to share yours with me, I’m all  ears).

Here’s what I’ve got for now:

• Akamai (AKAM) says it delivered 2,185,000 “live and on-demand streams” today. If I’m comparing apples to apples here (Jennifer?), that’s much fewer than the seven million simultaneous streams the content delivery network delivered during Obama’s inauguration. Akamai also compares the number of visitors on its “Net Usage Index for News” and says that number peaked at 3,924,370–that’s nearly double average traffic of 2,000,000, but fewer than the 4,247,971 visitors who were looking for Jackson info when he died on June 25.
• Facebook, which integrated its service with live video feeds from CNN, E! ABC and MTV (why wasn’t Twitter doing this?), says that one million users posted 800,000 status updates during the event, with the overwhelming majority coming through CNN. There were 1.8 million updates with the word “Obama” in them during the inauguration.
• CNN says it served up 781,000 concurrent live streams during the event; during the Inauguration it served up 1.3 million. It served a total of 4.4 million streams during the event, and 10.4 million for the day.
• MSNBC claims three million live streams–which are different from concurrent streams–and says that is its second-highest total, after…well you can guess. More if they roll in.

One way to think about this is as a timeline–or a stream. As people share more, the timeline gets filled in more and more with what is happening with everything you’re connected to. The pace of updates accelerates. This creates a continuous stream of information that delivers a deeper understanding for everyone participating in it. As this happens, people will no longer come to Facebook to consume a particular piece or type of content, but to consume and participate in the stream itself.”

A heavyhanded explanation for a simplistic concept, but perhaps there is a deeper meaning to be found in our collective tweet of consciousness mutterings–“John is stuck at SFO,” “Beth is all liquored up,” “Adam is reminiscing about his days on the Newton”…“Mark has a laughably grandiose vision of his social-networking service.”

Or perhaps the deeper meaning here is to be found in another tweak Facebook is making to its service. As part of this redesign, the company is making profiles and pages the same thing. What that means is that pages created by public figures, organizations and companies will now look, feel and behave just like any other profile. Now their proprietors, too, can join “the stream.” “These folks will now be able to share status updates, videos, photos or anything else they want, in the same way your friends can already,” says Zuckerberg. “You’ll be able to keep up with all of their activity in your News Feed. This means that you can find out that Oprah is reading a book backstage before a show, CNN posted a breaking story or U2 is working on a new song, just as you would see that your friend uploaded new photos from her trip to Europe.”

Presumably, that also means folks like Microsoft (MSFT), BlockBuster (BBI) and Coca-Cola (KO) can also tip you off to the fascinating things they’re up to. So in the end, this redesign isn’t about the continuing evolution of the “social graph” or whatever the hell Facebook calls its network these days. It’s about developing a new advertising program that allows businesses legitimate access to the 175 million Facebook members the company has so far failed miserably to monetize.

TweetDeck, a one-man company that makes a very helpful piece of free software that organizes your Twitter streams, is raising an angel round led by Betaworks, the investment company with a hankering for all things Twitter. The round, which hasn’t closed yet, will eventually end up somewhere south of $500,000, I’m told.

When it does, the financing will make 34-year-old programmer Iain Dodsworth a paper millionaire. Nice work for a Brit who built TweetDeck just last June because he was following 30 people on Twitter and wanted a better way to organize their Tweets.

Dodsworth says TweetDeck has been downloaded 250,000 times since then and that users are sending out 120,000 messages a day using the software. That places it above other free Twitter clients like Twitterific and twhirl, both of which are cranking out 80,000 to 85,000 messages a day, according to tracking service TweetRush.

All of them are part of the burgeoning ecosystem that revolves around Twitter, which powers all of their companies by letting them plug into its data stream. In exchange, all of these companies make Twitter more successful, by bolting on frills and features to its bare-bones service.

And no money changes hands at any point: Twitter doesn’t charge for use of its data, and its partners do all their development work for free. That could change at some point. As Twitter casts about for a business model to support its service–it is, famously, just about revenue-free at this point–an obvious solution would be to start charging a fee to the likes of TweetDeck.

No problem, says Dodsworth, who says he’d be happy to pay Twitter, particularly if it gave him even more access in exchange. Oh. And what about his business model? It’s coming, Dodsworth says–he’d like to start selling a pro version of his software, targeting power users and corporations.

That strikes me as a fairly small market, but then again TweetDeck is a very small operation. Dodsworth says he doesn’t plan on hiring any additional help in the near future, even as he preps new features like a version for Apple’s (AAPL) iPhone.

I’ll let him explain himself, via a short video interview I taped with him yesterday–just as soon as the Internet cooperates and lets me post the clip. In the meantime, you can also track Dodsworth on Twitter here or here.