The good news: It’s still a really big publishing company, with 23 percent of the U.S. magazine business. And once it is done firing people, it may make money again.

The bad news: It’s a really big publishing company that’s trending the wrong way.

Overall revenue was down 5 percent, to $737 million. Subscription revenue was down 11 percent, and the main reason advertising revenue was up 2 percent was because Time Inc. now has control of Golf.com and Sports Illustrated’s website, which used to be run by Time Warner’s cable networks. And the additional money Time Inc. makes from those sites is basically wiped out by the absence of licensing fees they used to charge the cable guys for those sites. Magazine ad dollars were down.

Time Inc., or whatever the new company will be called, should still be profitable for a while, though. The company lost $9 million this quarter, but that’s because it spent $53 million firing about 6 percent of its workforce.

If you are an optimist, you can imagine a scenario where the new company is able to leverage the cash flow it would normally produce into acquisitions, new lines of digital businesses, or … something to turn the top line around. Stranger things have happened.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Aspen Photo / Shutterstock.com

Heads up, cord-cutters: If you want to watch March Madness next year, you’re going to have to pay up.

The last two rounds of next year’s college basketball tournament, including the championship game, are likely to be broadcast on one of Time Warner’s Turner network channels — TBS or TNT — instead of CBS, according to Sports Business Daily and the New York Times.

CBS and Turner share coverage of the tournament, and the switch for the final games was already scheduled for 2016. No one has explained why the two companies are moving the date up by two years, but it fits a pattern we’ve seen for several years: Big-time sports events migrating from free TV to pay TV.

In 2006, Monday Night Football moved from ABC to Disney’s ESPN. If you wanted to watch much of last summer’s Olympics, you needed a pay TV subscription that gave you access to NBC Universal’s cable channels. And as SBJ’s John Ourand notes, the BCS college championships, the NBA conference finals and some baseball playoff games have all moved over to cable, as well.

The free-to-pay move serves the interests of the TV Industrial Complex in several ways: The cable networks, flush with cash from subscriber fees, can afford to pay big bucks for the rights to what is must-see TV for many people. And because it’s must-see TV for many people, it helps raise the overall value of the cable networks (Rupert Murdoch used the same strategy to turn Fox into a legitimate broadcast operation two decades ago).

And moving big-time sports to pay TV helps pay TV, period. Nielsen figures there are five million cord-cutters, or cord-nevers, and that number would presumably be much bigger if you could get sports online without paying for TV.

Which is why I’ve been waiting for Google, or Apple, or Intel, or some other TV outsider to pony up for the rights to a slate of NFL games, or some other sports franchise that millions of people have to watch, no matter where they are. Hasn’t happened yet.

(Note that if Aereo, which distributes broadcast TV over the Web without paying programmers a penny, wins its court case, then expect just about every big broadcast show — not just sports, but everything — to move from broadcast to cable networks owned by the broadcasters. Big if, though.)

Meantime, if you’re serious about college hoops and you’re serious about not paying for TV, you might still have a legal option next year.

Last year, CBS and Turner offered a $4 package that let you watch the games live on Android and iOS devices, and that option has gone away this year. This time around, you can only stream the Turner games if you’re an “authenticated” pay TV subscriber, though you can still stream the CBS games to your PC without registration.

But Turner/CBS are offering app users a free four-hour “preview” this time around. So if you’re willing to do a little planning — and if the option is still available — you could save up your preview time for the championship game, and at least watch that one for free.

That sounds like a lot of work, right? That’s what the pay TV guys are hoping you think …

Aspen Photo / Shutterstock.com

The two companies announced a new pact today that will move more Time Warner shows to Netflix: Animated stuff from Turner’s Cartoon Network and Adult Swim, along with TNT’s “Dallas.”

As with every other Netflix TV deal, these are all repeats: No one is selling Netflix stuff that they’re still running on their own network.

But, at the right price, the deal is a nice addition for Netflix, particularly the Cartoon Network stuff, which bolsters a kids lineup that’s already a key part of the service.

It also helps buffer Netflix in case Viacom gets itchy and ends up taking away its Nickelodeon programming when that deal ends. And the Adult Swim stuff is great for stoners.

Bigger picture: This is the third deal Netflix has made to get its hands on Time Warner programming. In October 2011, it paid up big for stuff that used to run on the CW Network, which is jointly owned by Time Warner and CBS. Last week, it struck another deal for shows made by Warner Bros. studio, including NBC’s “Revolution.”

Biggest picture: This doesn’t mean that you’re going to get the video stuff Time Warner values the most — its movies and its HBO shows — on Netflix, now or ever.

Jeff Bewkes has made it quite clear that he’s happy to use Netflix as a syndication outlet for stuff he’s already gotten maximum value from. If Reed Hastings thinks he can make money with Bewkes’s leftovers, he is happy to sell them.

Amazon’s Prime Customers can now watch “The Closer,” the crime series that ran for seven years on TNT, and “Falling Skies,” the earthlings-versus-aliens drama that’s still running on Turner’s cable channel.

“The Closer” never got the kind of critical buzz heaped on “Mad Men,” etc., but it was very popular. And “Falling Skies” does pretty well, too.

A press release says viewers can watch “current” episodes of the latter, but that’s a bit misleading — you won’t be able to watch any new shows from the series until at least three months after the end of a new season.

So those are nice additions for Amazon. But not game-changers for the service, which doesn’t appear to be attracting many eyeballs right now — at least not compared to Netflix.

The main reason the deal is worth noting is that it’s another exclusive for Amazon and Time Warner, which has held almost all of its streaming content off of Netflix. Earlier this year, the two companies announced a deal to stream “The West Wing,” “Fringe,” and other Time Warner-owned shows on Amazon.

Meanwhile, the only Time Warner-owned content that you can see via Netflix streaming are shows that ran on the CW Network, which is co-owned by Time Warner and CBS.

But it wouldn’t be a shock to see that change sooner than later: While Time Warner CEO Jeff Bewkes used to go out of his way to denigrate Reed Hastings’s service, his newish position is that he’s happy to take a Netflix check — once he’s finished selling his stuff everywhere else.

I’m told the deal, which we told you about in June, closed Friday, and is scheduled to be announced today.

Picking up Bleacher fills a hole for Turner’s digital operations, which lost control of SI.com and Golf.com to corporate cousin Time Inc. last quarter.

The interesting question will be price: Bleacher Report raised a reported $40 million in venture funding, and was angling for an exit above $200 million. But that’s a lot of money for 10 million monthly visitors. More when I get it.

Update: “Just under $200 million”, says Bloomberg’s Edmund Lee.

The pay-TV part, though, is going to seem very familiar: They’ll pay Google $120 a month, and they’ll get a bunch of TV channels, whether they want all of them or not.

Which isn’t to say it won’t be cool. The TV service should offer a bunch of nifty features that will make it easier to find and watch what you want.* And it comes with a free Nexus 7 tablet. And unlike the cable box you have now, it should get better with some frequency, via software updates. Etc.**

But if you were hoping that Google was going to use its fiber project to reorder the TV landscape, you’re going to be disappointed. At least in this incarnation, Google is playing by the TV establishment’s rules.

That is, if you want to get stuff from the cable guys, you have to buy everything they bundle. Discovery’s TLC comes with Animal Planet and the Science Channel. NBCUniversal’s CNBC comes with Bravo, Oxygen and the USA Network. Etc.

And the cable guys are happy to sell Google their shows, because they love having more buyers for their stuff, as long as they don’t break the bundle model they love so much.

Just like they were happy to sell TV to the satellite guys and telco guys. “We view them the way we view [Verizon’s] Fios,” says one programmer who’s working with Google.

Not everyone is in, yet. Time Warner (TNT, TBS, HBO), Disney (ESPN, Disney Channel), News Corp. (Fox News, FX) and AMC Networks (AMC, IFC) don’t have deals with Google. And if Google launches without all of them, the service will look crippled. But the Google folks are saying positive things about getting deals done, and I’ve heard similar murmurs from some of the TV guys.

One exception to the happy talk: News Corp., which owns this Web site, has butted heads with Google repeatedly. The two sides had a particularly unsuccessful discussion about Google TV at CES in January, which led to a Twitter outburst from Rupert Murdoch. So that deal could be extra-hard to nail down.

Then again, Viacom also has problems with Google — you may recall they are still suing them over YouTube. And Viacom has signed on for Google Fiber, too.***

Money solves all sorts of problems, especially when it comes with a promise not to screw up the ecosystem that makes the cable guys fat and happy. Right now, Google’s willing to offer both.

*A lot of these features, by the way, are similar to features Google has been showing off with its latest version of its Google TV software. But this being Google, the Google Fiber service is completely separate from Google TV — they’re handled by different teams, using different hardware, different software. So odd. So Googley.

**You can watch the Google guys pitch this themselves, by checking out yesterday’s demo video, starting at the 25-minute mark.

***Boy, did this dummy get that one wrong. Sorry!

(Image courtesy of Shutterstock/BortN66)

Well-known Silicon Valley entrepreneur and Amazon board member Blake Krikorian is joining the board of directors of FreeWheel, the video tech start-up that helps entertainment companies manage content across digital platforms.

FreeWheel’s customers include NBC Universal, Vevo, Fox, Turner and ABC. It has raised close to $29 million in funding from a number of venture firms, such as Battery Ventures and Foundation Capital.

The San Mateo, Calif.-based company said Krikorian will help with corporate strategy and partnerships.

Krikorian was founder and CEO of Sling Media, the device maker which was acquired by EchoStar in 2007. He’s been an angel investor since then, and became an Amazon director last fall.

In an interview, Krikorian said that monetization and rights management have held back innovation in online video, but that content owners have recently released some promising products, such as Disney’s new Apple iOS apps for watching linear television programming.

“FreeWheel has built a trusted technology platform to manage the money flow for video content providers and distributors as their content is delivered across the Web and on mobile,” said Krikorian. “With these business and technology foundations in place, I can finally see the day coming when every media company will deliver all their programming online, in all of its forms including live linear TV.”

The logic for the deal is that Turner has a small presence in online sports — it manages sites like PGA.com and NBA.com, but doesn’t own them — and Bleacher Report’s nine-million-plus visitors will help fix that.

But it’s worth nothing that, up until this spring, Turner used to have a much bigger presence in online sports, via an arranged marriage that didn’t seem to make either participant very happy: For the last couple years, Turner managed Sports Illustrated’s Web site on behalf of Time Warner’s Time Inc.

Time Warner CEO Jeff Bewkes is famously uninterested in corporate synergy, so I’m not quite sure why he thought having the cable guys sell ads for the print guys would work. And from what I could tell, no one on either side liked the deal. The guys who made the content for the site thought the ad guys didn’t do a bang-up job, and vice versa.*

But that pairing ended in divorce this quarter, and Turner’s sports group has said it was going to create its own “branded digital destination.”

Perhaps they’ve decided that buying is easier than building. As it turns out, Bleacher Report’s traffic matches up almost precisely with SI.com’s, according to comScore. Convenient! (Click to enlarge.)

 
*This dynamic, we should note, also exists at nearly every commercial Web site, everywhere.

(Image courtesy of Shutterstock/Everett Collection)

So it’s a good time to get some perspective on what he learned during the experience, and how he deals with the Web at his newish job at Turner’s TBS.

In some ways, O’Brien told fellow Time Warner employee Piers Morgan at the cable industry’s annual convention yesterday, things haven’t changed that much: In an ideal world, he’d like people to watch his show live, when it airs.

But he also knows it doesn’t work that way, at all. And he’s okay with that, and he’s learned to embrace YouTube, Tumblr, Twitter, etc.:

When I got started in the business in ’93, the obsesssion was: Never give anything away. Don’t tell anybody … you want it to be a surprise when they watch the show. You want to tease them, but get them to watch the show.

And what we have found is true is that this is a different generation. It works differently now. You can show them exactly what Will Ferrell did [on O'Brien's show], and get it out there, so there’s no “surprise” …

The days of, “I only want people to experience me at 11, on TBS” — those days are over. The audience is too fragmented, they’re too distracted, and a whole generation is growing up that doesn’t watch television that way.

You can watch the entire 22-minute interview, which moves along quite quickly, below. Thanks to the NCTA for the video.

Some of the college basketball tourney’s games will only be available to Web users whose cable providers have deals with Turner Sports, or those who pay a $3.99 one-time fee to access the games on PCs, Google/Android and Apple/iOS devices.

Games that CBS broadcasts, though, will still be available to anyone with a Web browser, through the network’s own site.

Here’s the practical breakdown, nicely summarized by BTIG’s Rich Greenfield (registration required):

• CBS will stream the games airing on the CBS Network throughout the country live on CBSSports.com for free. Consumers will only be able to watch on PCs/Macs, with no tablet/smartphone access.
• TBS, TNT and TruTV will stream the games airing on each network live at TBS.com, TNT.tv and truTV.com for consumers who authenticate their respective MVPD service provider (currently all major MVPDs authenticate these network Web sites, except Time Warner Cable). As with CBS, the games will only be available via PC/Mac (no portability).
• Complete access to March Madness on Demand via PC/Mac, smartphone and tablets with interactive features, regardless of whether you have subscribed to MVPD service, will cost a consumer $3.99 (one-time fee for the whole tournament). Streaming online and across portable devices will be available from the selection show through the championship game.

A few more notes: CBS and Turner split the games, so you won’t run into the paywall every time you want to watch — Turner will have 41 of the games. And as Greenfield notes, most pay-TV operators have deals with Turner, which says that means about 75 million homes will have Web access via “authentication.” That said, if you’re planning on watching the games that way, better prepare now, by hunting down your subscriber info, etc. — the process isn’t nearly as easy as it ought to be.

Big picture: This is a switch from the precedent CBS established in 2006, when it started streaming all of the tournament’s games on the Web for free (for three years before that, it had charged around $15 to watch online).

Each year, the network loudly trumpeted the number of eyeballs and ad dollars that Web streams attracted, while arguing that it didn’t hurt traditional TV ratings at all. Last year, you could even watch the tournament on an iPad for free.

But it’s in keeping with the broader move we’ve seen from big media companies, who are pulling back on free Web video. Back when Hulu launched in 2008, it seemed that most big TV networks were going to put all their shows online, but in the last couple of years, we’ve seen the pendulum swing the other way, as networks tie “free” Web TV to pay-TV subscriptions.

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.

That seems like an obvious correlation. But, until recently, that wasn’t the case, for a couple reasons. Some Web video sites had held back a bit from shoving ads in front of users’ faces, for fear of scaring them off. And lots of folks who wanted to buy video ads couldn’t find places they wanted to place them.

This is changing now, and that means the Web video business might finally be catching up to the long-running Web video boom.

Here, for instance, is promising news for ad buyers and sellers, via FreeWheel, a start-up that helps serve and manage video ads for the likes of Turner, Vevo and Fox. FreeWheel says that last quarter, for the first time, the rate of video ad views grew faster than overall video views — 128 percent versus 97 percent:

Just as important is that viewers seem okay with the bump in ads, too. The completion rate for the ads seems to have held steady, even as the number of ads has increased.

That’s particularly true for “long-form” stuff — often TV episodes on Hulu and other sites — which have recently seen ad loads double. The longer you watch a video clip, it seems, the more likely you are to watch the accompanying ads all the way through.

Easy enough to cover this stuff with caveats, the most obvious being that FreeWheel is anything but an unbiased observer here. It’s also important to note that this data goes through the first part of this fall. And, as lots of glum Web publishers will tell you now, the Web ad business has gotten a lot less robust in the last couple months.

Big picture, the Web video business is still very much a work in progress, which you can see at a glance by noting the turmoil at Hulu, or YouTube’s overhaul. And there’s still a long way to go: Video ads grew 42 percent in the first half of the year, but still only make up 6 percent of the overall Web ad business. But if it keeps headed in this direction it’s going to quickly make up ground.

Speaking of YouTube, here’s a clip Google’s site tells me is a new favorite. Involves some standard-issue hip-hop swearing:

J.P. Morgan analyst Doug Anmuth reports back from a recent huddle with Netflix managers, and says he thinks they’re done writing checks for a while: “We believe the vast majority of Netflix’s domestic streaming spend for 2012 … has already been announced or committed. Accordingly, we would not expect Netflix to spend aggressively or announce major new deals until management has better visibility on U.S. subscriber growth.”

Anmuth gives himself some wiggle room in his prediction — it’s possible that CEO Reed Hastings still has some whopper deals he’s signed but hasn’t announced yet — but the winking and nudging seems to indicate that the checkbook has gone away.

Part of the Netflix pitch in recent months has been that it’s going to be spending a lot of money beefing up its streaming video catalog, in part because it won’t be spending it on a Starz deal that gave it access to Disney and Sony movies. And Hastings says that, increasingly, Netflix is going to be paying a premium for stuff you won’t be able to find anywhere else — it’s one of the reasons his content bill is jumping to $3.3 billion, up from $1.2 billion a year ago.

Recent Netflix deals include a new pact to stream DreamWorks Animation movies, which used to run on Time Warner’s HBO, and a deal to grab reruns from the CW, the broadcast joint venture between Turner and CBS. And the company has made one high-profile commitment to original content, via “House of Cards,” the Kevin Spacey/David Fincher miniseries that will run next year.

Are those kind of deals enough to keep Netflix subscribers happy, or to lure new ones back to the service? We may get some hints from Hastings and company in the next few weeks, as they hit the investor-conference circuit. Netflix CFO David Wells will appear at a Credit Suisse gathering on Nov. 29, and Hastings will speak at a UBS conference on Dec. 6.

And semi-privately, Bewkes’ lieutenants have been suggesting that they’re going to pull back on content they supply to Netflix, and may cut it off entirely in the near future.

There’s definitely some theater involved here, put on for the benefit of investors worried that Netflix poses a threat to several of Time Warner’s properties: His Warner Bros. studio, its Turner cable networks, and its HBO premium cable network.

Because even while Bewkes and company have been lobbing spitballs at Netflix, they’ve been talking to the service about new distribution deals, sources familiar with the companies tell me.

In any case, Bewkes has been taking pains to soften his rhetoric recently. Last week, at the Tribeca Film Festival, he sent some verbal bouquets toward Hastings. And today he did much the same during Time Warner’s earnings call.

I’ve transcribed and edited Bewkes comments below. But he’s wordy, so even my abbreviated version runs long. Short version: We’re cool with Netflix because they’re complementary, not competitive. But that means we’re not going to give them our newest stuff, either.

This also happens to be what Hastings himself says. But more on that later. Here are Bewkes’s comments from this morning’s conference call:

Analyst: Can you talk about your relationship with Netflix?

Bewkes: Our view of Netflix has been very consistent. I’ve tried at times to be humorous about it, sometimes to make a point, so let me be clear: We think there’s definitely a role for subscription VOD services, library services, and Netflix in the ecosystem.

What is the role? Clearly it’s a way to give consumers access to a deep library of content that they couldn’t easily get before, particularly older shows. Although they’ll probably be able to get them more easily in other places now.

But it’s been a useful thing to get subscription services for products you couldn’t get before. There’s been some utility for viewers in being able to get serialized shows that don’t play as well on traditional cable networks or in syndication.

And because SVOD monetizes some content that couldn’t be monetized before, and it monetizes some content better than it was monetized before, particularly the older library stuff, then it can add money to the ecosystem. And that’s good for everybody.

But what we’ve always said is that you need to make sure SVOD doesn’t devalue the content and disrupt the ecosystem. So our view has been that it is not usually the right outlet for the newer, higher-value content that is functioning much more powerfully for viewers, on other kinds of networks, in other windows.

We’ve said because of all of that that we do not think it would be a suitable substitute for multichannel TV for most consumers. And therefore, we don’t think it will upend the multichannel TV business.

Q: Can you talk a bit more about cord-cutting, and whether you think Netflix and other Web services encourage it?

Bewkes: We watch it closely, but we haven’t seen it yet.

I think Netflix has around 23 million subs in the U.S. But we believe there are only about 4 million households that have broadband and no multichannel TV. And that number is almost unchanged since Netflix started its streaming service.

So even though people like the service, it has not led to very many Netflix subs cutting the cord. Looking forward, it’s hard to see how subscription TV becomes a replacement for multichannel TV.

Because as far as we can see, it probably won’t be able to economically offer a lot of the current shows, sports, live events, first run things of all kinds, that are available on all the high-value networks. And we don’t think that very many subscribers are going to be willing to give those things up.

We don’t think U.S. consumers want less choice. The record of the last 30, 40 years has been they want more choice.

Just to really acid test that, there are already a number of stripped-down TV packages that are available. And very few consumers take them.

Dish Network has a “focus on value” package, and its lowest-priced package is $24.99. Most people don’t take that, which is why the average revenue at Dish is closer to $70.

And then add the last part of the puzzle, which is you can see it this week at HBO GO: TV Everywhere [which means] VOD availability, for all the networks everybody loves. It’s going to make the current network subscriptions, foremost among them HBO, even more palatable.

So this really suggests that things like Netflix are welcome additions.

One exception to the rule has been the annual March Madness NCAA college basketball tournament, which CBS has been broadcasting for free on the Web for several years.

Which is smart: A big chunk of the tournament occurs during weekday work hours, so giving people the opportunity to stream games to their PCs isn’t a channel conflict, it’s just a chance to collect more eyeballs.

This year is the first year that CBS and Time Warner’s Turner are splitting up broadcast and digital rights, and the two networks have added a new twist: Free streaming of all the games to Apple’s iPhone and iPad. (No luck this year for Google Android fans).

[UPDATE: Several of you have asked when the app will show up at iTunes. March 10, Turner says.]

In the past CBS has offered iPhone streaming, but only via a paid app; this will be the first year the tournament is available on the iPad.

The tournament, which now features an extra four teams and an extra two days of games, kicks off March 15; we’ll see then how Verizon Wireless and AT&T, which is one of the tournament’s digital sponsors, hold up to demand.

Mark Zuckerberg’s company is working hard to win over heavyweight content distributors, hoping to convince them to link their sites up with Facebook, or to make their existing links deeper. The pitch: Connect your site to ours, and we’ll drive you eyeballs and help you hang on to them. And in return, we’d like to know more about your users.

Facebook has been headed in this direction for a while, and made a big move in April when it rolled out its “Like” button to outside sites. Some two million of them have now integrated the social network in some form.

But Facebook has made a point of wooing big media companies in the past few months. It has hired New York-based ambassadors specifically for the task, and is sending top executives out east for schmoozes. It might be working.

For instance: Facebook and Time Warner are now talking about using the social network’s login system to “authenticate” cable subscribers who want to watch online video from cable channels like TBS and HBO. Sources familiar with the companies’ plans say they are in early stages, but that the two companies are hoping to link up first with Verizon’s FiOS TV  service.

The upside for Time Warner and Verizon: It will be easy for customers to sign into Web video sites, and easy for them to tell their Facebook friends what they’re doing. That can drive more traffic and engagement, and ultimately more ad dollars or more subscribers.

And the upside for Facebook: It gets incredibly valuable data.

If that linkup goes through, it will be a big deal for pay TV operators, who have been wary about letting outsiders act as gatekeepers between their subscribers and their content. That’s why Facebook and Time Warner want to work with Verizon, a newcomer to the TV business, instead of established cable giants like Comcast.

The proposed Time Warner-Facebook linkup is a good example of what Facebook is trying to accomplish across the board. It wants to insert itself between media companies and their consumers–with “Share” buttons, “Like” buttons and Facebook Connect logins–but in a way that makes both groups happy about the arrangement.

Facebook COO Sheryl Sandberg and Dan Rose, the company’s VP of partnerships, made a version of that pitch to senior Time Warner executives in a meeting last week. The pair also hosted a presentation and dinner for about 20 other big Web publishers, including executives from ESPN, the New York Times, Condé Nast, CBS and at least one media celebrity. “Tina Brown was actually there, which I thought was sort of hilarious,” says one attendee.

Facebook has also hired two New York-based executives tasked specifically with getting big media companies on board: Andy Mitchell, previously a VP of business development at the Daily Beast, and Nick Grudin, who held the same title at Newsweek.

Executives who’ve attended the meetings say media companies seem reasonably receptive to Facebook’s approach. In part, it seems, it’s because the company isn’t Apple or Google, two heavyweights that can make Web publishers wary.

“Facebook doesn’t attest to be perfect about being perfectly transparent about where they’re going. But they’re pretty predictable,” says one meeting participant. “It’s not like Apple, where they’re closed.”

Add another: “It was very friendly. It wasn’t like meetings we’ve had with Google, where everyone’s arms are crossed.”

But publishers are also realistic–they realize by trading user data for traffic and engagement, they’re helping to build up a company that is already competing with them for ad dollars. “In the end, they’re like the other big guys,” says another attendee. “They’re both friend and foe simultaneously.”

As in Conan O’Brien, the former NBC employee whose brief stint as host of “The Tonight Show” ended badly, and expensively, for the network. It seems to have worked out okay for O’Brien, though–he got a very big severance check, an infusion of online adoration and, eventually, a well-paid gig at Time Warner’s Turner (TWX).

And while it would be a little, um, awkward if O’Brien actually won the Emmy for best “variety, comedy or music series” (he’s up against Jon Stewart, Stephen Colbert, Bill Maher and “Saturday Night Live”), there is some upside for NBC here. The GE (GE) unit is broadcasting the Emmys in late August, and the potential car-crash nature of the award show might bring in some more eyeballs.

Here is where I’d show you a clip of the award-nominated show, but NBC has scrubbed O’Brien off of its site, Hulu and much of Google’s (GOOG) YouTube. So you’ll have to settle for this bit that O’Brien did specifically for YouTube, where he introduces his favorite viral clips.

As in Conan O’Brien, the former NBC employee whose brief stint as host of “The Tonight Show” ended badly, and expensively, for the network. It seems to have worked out okay for O’Brien, though–he got a very big severance check, an infusion of online adoration and, eventually, a well-paid gig at Time Warner’s Turner (TWX).

And while it would be a little, um, awkward if O’Brien actually won the Emmy for best “variety, comedy or music series” (he’s up against Jon Stewart, Stephen Colbert, Bill Maher and “Saturday Night Live”), there is some upside for NBC here. The GE (GE) unit is broadcasting the Emmys in late August, and the potential car-crash nature of the award show might bring in some more eyeballs.

Here is where I’d show you a clip of the award-nominated show, but NBC has scrubbed O’Brien off of its site, Hulu and much of Google’s (GOOG) YouTube. So you’ll have to settle for this bit that O’Brien did specifically for YouTube, where he introduces his favorite viral clips.

So the bookseller has nabbed a magazine guy to run it. Barnes & Noble (BKS) has hired Jonathan Shar, a 15-year veteran of Time Warner’s (TWX) Time Inc. to lead what it is calling its “Digital Newsstand and Emerging Content, Barnes & Noble.com” unit.

Bad name, good idea. Shar has handled print duties–he ran consumer marketing for Sports Illustrated–and digital for Time Inc. Most recently, he was GM for CNNMoney.com, the publisher’s joint venture with Turner.

The deal to bring Eun on board was finalized last night, Armstrong told employees in an all-hands email (see below). It’s not a huge shock to see him leave–he’s done a lot of heavy lifting there already, and sources say that like many Google (GOOG) executives who have left recently, Eun felt he couldn’t move much higher in the company.

Eun used to have a role that paralleled Armstrong’s at Google: Make peace with traditional content companies. But instead of trying to sell them ads or negotiate search deals, Eun was supposed to hammer out deals to help get their content onto Google. Most recently, he was focused on getting TV networks and movie studios to put stuff on YouTube, which involved new ad-supported deals (see: Turner, ESPN, etc.) as well as the possibility of renting clips by the stream.

Wilson is a longtime AOL (AOL) guy who rose up the ranks and was pushing for the original content strategy that Armstrong embraced even before the last regime change. He seems to be leaving on better terms than other pre-Armstrong executives, as he’ll be staying with the company until May to manage the transition.

By leaving just as AOL has spun off on its own, Wilson is giving up a chance at some significant upside via low-priced stock options. But sources say Wilson doesn’t have another job lined up.

In an interview this afternoon, Armstrong says that Wilson approached him about leaving the company “several weeks ago”. When I asked him if Eun’s last role–developing partnerships with big media outlets–signaled a shift in AOL’s “roll your own–cheaply” strategy, he made a point of saying that’s not the case. Eun’s hire will simply “supercharge” AOL content plans, he said.

Nonetheless, Armstrong did allow that AOL has some significant content partnerships to announce in the coming months.

Here’s an interview I conducted with Eun late last year, focused on YouTube’s efforts to turn a profit and add new content:

And here’s Armstrong’s note to the troops:

As you know, content is at the core of our strategy and we have broad aspirations in this space. We’re focused on scaling our content platforms, production and partnerships to offer quality, original content that will engage consumers and bring them–and their friends–back to our properties time and again.

The fact that we have such a strong foundation in the content space is due to the determination and dedication of Bill Wilson. He saw the opportunity presented by audience fragmentation on the Web and positioned AOL’s content offerings in a number of key verticals. Early in the new year, Bill told me that although he remains committed to the vision and strategy of AOL, he’s ready for a break.

After nine years with the company and after the significant changes we made this year moving from licensing content to becoming a principle in content, he wants to take a step back. Bill built a strong management team and laid the groundwork for the content strategy that we’re now pursuing. While I’m disappointed by his decision, I respect his intent and have asked him to work with me, not only to find his replacement but also to transition with that person to ensure that, as a company, we don’t miss a beat on the execution of our content strategy.

Bill is a talented executive and great person, and I’ll be working with him closely and supporting his transition. Bill cares about AOL, he cares about the content and the products, and he has worked incredibly hard to keep AOL on the media map.

I’m pleased to announce that David Eun will be coming on board in March to head up our content business. Some of you may remember David from his tenure at Time Warner where he helped to oversee AOL as Vice President, Operations, for the Media & Communications Group reporting to Don Logan.

David, who joins us now from YouTube and Google, has had a long career in offline and online content and is the person responsible for managing Google and YouTube’s content partnerships. David brings an impressive breadth of media experience to AOL at an exciting juncture as AOL forges a new future as a high-scale producer and partner in the content space. He will be based in New York.

Bill will be staying on until May 1 to help ensure a smooth transition with David, who begins work March 1.

You may wonder why this topic wasn’t raised during yesterday’s Q4 employee call. My preference is always to share this type of news with you in person, but the facts are that there were elements of this announcement that were not finalized until last night. This drove us to announce this news this morning–to our employees first.

As we have discussed, AOL is now in a phase of transition from playing defense to playing offense. As I said on the employee earnings call yesterday, AOL’s back in the game and we’re playing to win. We have a lot of work to do, but we’re going to do it. Please join me in welcoming David back to AOL and in thanking Bill for his dedication and leadership at AOL – TA

And here’s the release:

AOL NAMES DAVID EUN PRESIDENT OF AOL MEDIA AND STUDIOS

Eun Will Oversee All AOL Content, SEED.com and Studio Operations

New York, NY, February 4, 2010 – AOL Inc. (NYSE: AOL) today announced that David Eun will join the company as President of AOL Media and Studios, effective March 1. As AOL’s chief content executive, Eun will be responsible for the company’s more than 80 content sites, its new SEED.com publishing platform, as well as the newly acquired StudioNow video platform and AOL’s NYC and LA studios.

Eun will report to AOL Chairman and CEO Tim Armstrong and will be based in New York. He succeeds Bill Wilson, President, AOL Media, who will transition out of the role after nine years with AOL.

Until 2006, Eun helped to oversee AOL as Vice President, Operations for the Media & Communications Group at Time Warner Inc. In that role, he helped provide operational oversight and develop new businesses, particularly in digital distribution and broadband content and services, for the company’s AOL, Time Warner Cable and Time, Inc. divisions. Eun joins AOL from Google, where as Vice President, Strategic Partnerships, he was responsible for managing global content partnerships with Google and YouTube.

“David brings an impressive breadth of media experience to AOL at an exciting juncture for the company as we focus on scaling our content platforms, production and partnerships to offer quality, original content that will engage consumers and bring them–and their friends–back to our properties time and again. I’m delighted to welcome him back to AOL as we continue to pursue our strategy and mission in digital content and journalism,” Armstrong said.

“Bill Wilson has been a driving force for content at AOL and under his leadership the quantity and quality of our premium branded and niche offerings have expanded significantly. On behalf of AOL, I want to thank Bill for the energy and dedication he has brought to the role. Bill has been an outstanding leader at AOL,” Armstrong added.

“AOL has a unique opportunity to bring together its core strengths in the key areas of content and journalism, distribution, and advertising to engage its users, partners and advertisers in a way very few companies can. These three elements will be fundamental to success as the media and technology industries evolve and converge,” Eun said. ”And after nearly 15 years of seeing this convergence approach, I couldn’t be more excited to be returning to AOL to help Tim and his team capture that great promise.”

AOL is one of the largest producers of original content on the Web, with more than 80 official AOL and custom-built sites including more than 20 which rank in the top five in their U.S. comScore Media Metrix category. Approximately 80 percent of AOL’s content is originally produced by a growing team of staff and freelance journalists, including nine Pulitzer Prize Winners. AOL also produces more than 50 original video productions a month at state-of-the-art studios in New York and Los Angeles as well as through a network of freelance video producers.

SEED.com, AOL’s premium content management system, assigns, buys and distributes work for all of AOL’s properties.  StudioNow, which AOL acquired in January, allows the company to integrate a fully functional video creation platform into SEED and leverage a national network of creative professionals to develop and produce quality video in a way that is rapid, efficient and scalable.

Before joining Time Warner, Eun was a partner at Arts Alliance, a venture capital firm focusing on digital media, information technology and business services. He started his career in media at NBC, where he led some of NBC’s first cross-media initiatives involving television programming, the Internet, and retail consumer products. He is a former management consultant with Bain & Co., and attended Harvard Law School and Harvard College, where he graduated magna cum laude in government.

]]> http://allthingsd.com/20100204/another-googler-goes-to-aol-youtube-boss-dave-eun-replaces-bill-wilson-as-content-boss/feed/ 0 http://allthingsd.com/20091203/live-comcast-pitches-nbc-deals-to-investors-with-charts/ http://allthingsd.com/20091203/live-comcast-pitches-nbc-deals-to-investors-with-charts/#comments Thu, 03 Dec 2009 13:35:57 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=13480 Comcast investors have been upset with the company ever since its plans to acquire control of NBC Universal from GE appeared in September. Now’s the time for the company to start wooing them back (at least publicly).

On the call: Comcast (CMCSA) CEO Brian Roberts, COO Steve Burke, CFO Michael Angelakis

CEO Brian Roberts: The deal will make us “strategically complete.” [Translation: We promise not buy anything else!]

Obligatory praise for Jeff Zucker for “completely transforming NBC into one of the premier cable operators in the business,” which is the same way Zucker likes to describe himself.

This deal is so incredibly easy for us to finance that we’re increasing our dividend by 40 percent. [Also, we're doing this with both hands tied behind our back!]

CFO Michael Angelakis: If you get confused, there’s an appendix at the end of our presentation.

Did you know that Fandango is a “female-oriented” site? Me either.

Comcast has a “clear path to control” the joint venture by buying out GE’s (GE) interest, but future payouts are capped at $5.75 billion.

Debt ratings agencies have signed off on this, so don’t worry. They never get this wrong.

Roberts: Can’t stress this enough: We’re not buying a faltering film company and a flailing broadcaster; we’re buying a bunch of profitable cable channels. Cable channels. Cable channels.

Also, we’re buying at the bottom of the cycle, so some of the duds that we’re buying may end up having upside.

[Roberts is right about this, by the way: Networks really do rise and fall over time, almost independently of what management does. Remember ABC's peril in the pre-“Lost" era?]

Oh yeah. There are some theme parks, too.

Okay. Back to the deal: Cable channels, cable channels, cable channels. They are great. We love them. Affiliate fees are growing 12 percent a year, ad sales are up seven percent a year. Check out the awesome slide on page 19. “I think this is a wow slide” (see below).

Some more praise for Zucker.

COO Steve Burke: Cable channels. Cable channels. Cable channels. We love the ones we own, but they’re “subscale” compared to what we’re buying from GE.

We’re going to cross-promote the heck out of these and figure out how to make G, Style and Versus more valuable, like NBCU does with Bravo, etc.

[We're about 40 minutes into the call, and this is the first discussion about the Web.] The JV will be a Top 10 company with 82 million uniques.

At least for now, Comcast is still talking about “On Demand Online,” not XTREME ONLINE RAWKS or whatever the company is supposedly going to call it.

Q&A:

Can you give us more color on new businesses you may create once you combine? Also, what are you going to sell off?

Burke: There are “literally dozens of innovative ideas that come out of this combination.” Like interactive advertising. Targeting, etc. (via cable, not Web). We can launch new channels, new video-on-demand packages, more windows. A lot of opportunities.

Roberts: We don’t plan on selling anything. But “we have a long time between signing and closing” to learn about the assets we’re buying.

A lot of people have tried vertical integrations like this and they haven’t worked. What’s going on here? Also, how are you going to work with businesses like Hulu, which threaten your business?

Roberts: Some of these have worked. Think of [Liberty Media Chairman] John Malone’s deals. Or Time Warner (TWX) buying Turner. Or even News Corp. (NWS) and DirecTV. Anyway, that’s the past. Let’s look to the future. More important is that we believe this deal works with zero synergy benefits. [That's for you, Jeff Bewkes.]

[Um, anyone else get bumped off the call? Nope, just me. Apologies, will go get the Hulu the rest of Roberts's answer later, but I'm guess it was something along the lines of "we love Hulu and have no intent to crush it like a bug, and besides, we're one of three networks that will own it."]

Please explain how you’ll negotiate for, say, the Olympics and other assets when you don’t actually own NBC yet.

Roberts: [GE CEO] Jeff [Immelt] and Jeff [Zucker] will have to run their business until the deal closes.

What about regulatory hassles?

Roberts: No worries. This is a “pro-consumer transaction.” And check out all the things we said to that effect earlier this morning.

Burke: Both local advertising and national advertising are recovering. An analyst notes that GE has never told us much about NBCU because it hasn’t had to. So we’re going to get a much better look at how the business works going forward.

Why are you sticking your regional sports deals into this joint venture? Also, why not just hand the money you’re spending on this deal back to investors, via share buybacks?

Burke (I think): When you think of sports, its hard not to think of NBC Sports and Dick Ebersol [ahem]. Also, we think there’s some synergy with some of NBC’s local broadcast stations.

Angelakis (I think): We’ve already bought back $14 billion worth of stock in six years, and we’ll keep buying back stock. Also, check out our dividend. But we need a balance. This deal gives us financial returns and long-term strategic returns.

Roberts (I think): The timing is good. Size is appropriate–we can handle it. “You gotta like the business….We think it’s a reasonable risk. That’s what we’ve always done at Comcast.”

As for regulatory risk, if Washington wants us to make a really really serious change that blows up the rationale for doing this, we have the ability to back out. But we don’t think that’s going to happen. “Is there a break-up fee?” the questioner asks. Answer: No.

What does this mean for TV Everywhere/On Demand Online? (and Hulu)?

Burke: NBC has been careful not to put too much cable content on the Internet. We think that’s a smart strategy, “not that they asked us.” We think that going forward, you’re going to continue to have free broadcast stuff on Hulu, and cable stuff on TV Everywhere.

Roberts: Windows in general, our focus has been on expanding offerings, putting them on multiple platforms. All of those things are more likely to occur in a way that benefits distributors, content owners and consumers. “What about Hulu premium?” the questioner asks. Answer: “That’s certainly not in the cards.”

Here’s Comcast’s pitch in chart form:

ComcastNewPDF_12.3.09 –

]]> http://allthingsd.com/20091203/live-comcast-pitches-nbc-deals-to-investors-with-charts/feed/ 0 http://allthingsd.com/20091105/youtubes-newest-partner-will-ferrell/ http://allthingsd.com/20091105/youtubes-newest-partner-will-ferrell/#comments Thu, 05 Nov 2009 13:19:39 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=12825 Slowly but surely, YouTube has been able to bump up the number of “premium” content creators willing to hand over some of their stuff to the world’s biggest video site. Here’s yet another one: Funny or Die, the comedy site backed by Will Ferrell, Sequoia and HBO, among others.

You’ve been able to get Funny or Die clips on YouTube before, of course, but only with some effort–until now, the site has tried to keep views on its site or with its proprietary player.

That only worked in limited doses, though, so it makes plenty of sense for the site to expose its videos to a much larger audience. But note that even Funny or Die is trying to preserve a “windowed” approach to video distribution: Its clips will still premiere on the Funny or Die site before moving over to its YouTube channel.

This isn’t nearly as important as deals Google’s (GOOG) site has already struck with providers like CBS (CBS), Disney (DIS), Time Warner’s (TWX) Turner, and Sony (SNE).

But it does provide me with a chance to run a YouTube clip featuring Will Ferrell. Warning–Mark Wahlberg drops a couple F-bombs in the last 30 seconds of this one:

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