It’s not a big surprise that the giant and perpetual-motion online news site would do this.

After all, in the new age of media, newspaper Web sites are turning more toward streaming and on-demand video, attempting to take text-driven reporting and present it in rich, feed-it-to-me news packages.

But whether consumers want to tune in on schedule or call up news videos when they feel like watching is still up for debate.

In the HuffPost’s case, the video will be streamed to its flagship site, as well as to other AOL Web sites.

Jeff Bercovici of Forbes had the scoop on this a couple weeks ago, laying out Arianna Huffington’s ambitions to meet the increasing demand — at least, on the part of advertisers — for good video content.

Ambitious is probably the right word, since the Huffington Post and AOL plan to stream 12 hours a day, five days a week, with eight hours of content produced in New York and the rest out of Los Angeles.

Eventually, Huffington Post founding editor Roy Sekoff said that the network is aiming to reach 16 hours a day of live daily programming. With 2012 elections looming, the network will also feature lots of political reporters from Washington, he added.

The plan will also be costly — with the AOL media unit putting a hundred employees behind the streaming video effort, culling from the current HuffPost-AOL editorial staff of 320, as well as new hires with video-specific skills.

Will it work?

There’s little question that Web video viewing is on the rise. According to a 2011 Nielsen report, U.S. consumers now spend an average of four hours and 20 minutes per month watching video on the Web, an hour and 10 minutes more than the amount they watched in early 2010.

But Huffington and Sekoff believe that, despite the fact the HuffPost is mirroring the cable TV model and a lot of the programming will be live, consumers still aren’t all that interested in watching on a set schedule.

What Huffington Post is doing is not unlike what the Wall Street Journal Digital Network has been building over the last few years.

(Full disclosure: The WSJ, for those who aren’t aware, is owned by News Corp.’s Dow Jones, which also owns this Web site. I also previously worked at the WSJ’s video unit.)

Like WSJ’s video product, HuffPo will offer on-demand clips in addition to the live-streaming, deploying in-house staff as talent, plus Patch local reporters and sources in from the field using Skype video. It will also distribute the news video content on mobile phones and tablets.

The New York Times has also gotten into the streaming video game with its latest effort, Business Day Live, which launched yesterday.

Sekoff dismissed the idea that HuffPost was mimicking other news organizations, or even cable.

“No offense to the WSJ, but I think we got more comments this month than the WSJ did last year,” Sekoff said, referencing the more than six million comments on the main HuffPost site in January alone. “People don’t want to be talked to when they get their news; they want to converse with.”

And he said that HuffPost has no plans to become a cable TV network, although they’re open to potentially sharing the video content with interested networks. In terms of revenue generation, Huffington Post currently doesn’t have advertisers committed to the streaming network, but is seeking a handful of partners for launch.

Right now, there are no plans for a set schedule of programing, said Sekoff, because he feels that Web video consumers ultimately don’t care when the video is on.

“People don’t come home from work and say, ‘Oh it’s 9 pm, I think I’ll watch sports on the Web now,’” he said. “We just don’t think it’s there yet.”

Huffington concurred and said her own casual Internet video-watching habits — which include bouts of “Saturday Night Live,” Comedy Central and “The Good Wife” — reflect this.

“We don’t think Web video is about appointment-watching.” she said. “But just because people are watching Web video one way, doesn’t mean it’s the end of other kinds of consumption.”

Last week, I talked to Punit Soni, who runs games and mobile for Google+, to get an update on Google’s plan for social games. Since the conversation took place before Facebook’s filing, Soni has no direct responses to the numbers.

But he addresses in general how Google expects to challenge Facebook’s dominance in social gaming, and the big opportunity in front of them to do something different.

“There’s no point in being in this game if we are a ‘me-too,’” he said. “We want to be different.”

Yesterday, in Facebook’s IPO filing we learned that substantially all of the company’s payments revenue is coming from virtual goods from inside social games, and that one game publisher alone — Zynga — is contributing 12 percent of the company’s revenue, payments and advertising included.

At those rates, it’s easy to see why Google is emphasizing games and wooing developers to its platform.

It started off with a bang in August, when it launched games. In talking to reporters, Soni announced the company was sharing 95 percent of the revenue from virtual goods with developers, and was keeping only 5 percent for itself.

That was, and remains, much more generous than the 30 percent cut that Facebook takes.

Still, with only 36 games on its network, and far fewer users (however you want to calculate it), Soni was pretty honest about how far they still have to go. He was also extremely enthusiastic, and at times looked as if he wanted to leap out of his chair to get going on some of the projects Google had planned.

First, and foremost, he said they are working hard to get virality right; and second, they want to nail cross-platform, so that games worked seamlessly across the Web and mobile.

Viral channels are the most common way for people to learn about a game, and also one of the most controversial.

More than a year ago, Facebook was forced to dial back those channels, because users complained about receiving too many unwanted messages.

“We err on the side of caution,” Soni said. “We are slowly giving more options to do things.”

Soni said they also see a big opportunity to differentiate by offering a multiplatform approach, and letting developers build games that work across Google+, Google’s Chrome Web Store and mobile. Of course, it has an advantage because of the millions of Android users, whereas Facebook’s mobile efforts are still nascent.

Already, there are some examples of cross-platform play.

Today, you can play Rovio’s Angry Birds and Bubble Witch Saga across both Google+ and the Chrome App Store, and can pick up where you left off between the two.

“These are not Google+ games, but games that are on Google,” Soni stressed. “A lot more is coming on mobile.”

Google has also focused on getting a number of games as exclusives that launch a few weeks on Google+ before they show up on Facebook. To date, it has scored at least three titles — including a major title, Kabam’s Godfather — and there are more coming.

Asked why the game developers are willing to go exclusively on Google+, Soni said there’s some marketing that Google is willing to put toward it, but otherwise, “they are betting on us.”

He says it’s mostly the potential of the platform, and the fact that he’s receptive to feedback, that helps him understand exactly what developers need. Developers also acknowledge that supporting more platforms is helpful in reaching more players and diversifying their risk.

“If they say it’s because the platform is the best ever — no, it’s not true. But the plans we have and the sensitivity that we have for our users and developers, we will be very good sometime soon. … That’s why you are seeing exclusives.”

Soni wasn’t wiling to spill specific plans about what was launching next, but said a lot more is coming.

“We are a start-up platform. We are humble and know our flaws. As we grow, you’ll see new things. My work has barely started,” he said.

Many Internet companies and boldfaced names in tech have in recent weeks been vociferously opposing the passage of the bills, saying the provisions that would thwart piracy would also create an environment of censorship and unfairly target certain sites as being compliant in piracy. Supporters of the bills, meanwhile, say that the laws are necessary to clamp down on sites that circulate copyrighted content outside the U.S.

For those protesting the bills, some Web sites and developers have created options to help other Web users who want to black out all or portions of their sites.

SopaStrike.com is offering “blackout code” for Web users to copy and paste into the theme section of Web sites to protest SOPA/PIPA. The site says the code will only be available today.

The site encourages visitors to join the strike, sign up online and send letters to Congress. It also has a full list of confirmed participants in the strike.

CloudFlare is offering a “Stop Censorship” app that blacks out intermittent words on your site (you have to have a CloudFlare account to access the app). Visitors to your site will see the black bars only the first time they visit; after that, they’ll see a black “censored” label in the upper left corner of the site. CloudFlare also says it won’t block links, and is taking an SEO-friendly approach to blacking out words.

For users who don’t have a CloudFlare account, there’s a plugin available on GitHub, created by CloudFlare coder Mike Sofaer.

Some Webmasters might be concerned about the short-term impact of blacking out their sites, even if it is in solidarity with the national protest. WebMonkey points to a Google+ post from Google’s Pierre Far on how to black out sites the “right” way. He also notes, interestingly, that Google’s crawl team has configured Googlebot to crawl at a much lower rate for today only, so that the Google search results of Web sites involved in the strike are less likely to be affected today.

Around midnight last night, Google put up a blackout banner in front of its homepage logo; Wikipedia, BoingBoing and other sites also went dark. As AllThingsD’s Arik Hesseldahl writes, sites like Google could find themselves in legal hot water under SOPA and PIPA just for linking to pirated content in search results.

Still confused about what the SOPA protests are all about? AllThingsD has been covering the story, so here’s the latest, along with a growing list of participating Web sites. And the Guardian has a video explainer here.

An expected software update on a slow day at the end of December is hardly big breaking news. But for start-up company Boxee, it signals a shift away from its software for PC browsers and a focus on Internet-connected TVs: The company says version 1.5 of the software will be its last Boxee update for PCs, Ubuntu and Mac computers.

It will be launched along with a Live TV dongle for the Boxee Box later in January.

Version 1.5 of the downloadable software on the Web will include better file support, a new onscreen display, search functionality, HTML5 WebKit-based browser, and will support multiple languages. It will run on Windows XP, Windows Vista, Windows 7 (32 bit and 64 bit), Mac OS X 10.6 and higher, Linux Ubuntu 11.10, and will be available on Boxee.tv through the end of January.

And for those who would rather develop their own software for Boxee: The company is also releasing an open source version of its software.

The update won’t, however, offer PC users access to the same apps that are available on the Box, such as Netflix, Pandora and VUDU.

Boxee first launched in January 2010 as a Web application for watching Internet video online. In November 2010, it launched its awaited Boxee Box device, which came with a nifty Qwerty-style remote and offered a variety of apps — but it launched amid a growing market of Internet-connected TV boxes, including Apple TV, Google TV, Microsoft’s Xbox and the competitively-priced Roku box. At the time of the Boxee’s hardware launch, about 1.5 million people were using the Boxee software.

Boxee explained its shift away from Web software by saying it believes the future of TV will be driven by Internet-connected boxes, connected TVs and second screen devices like tablets. “While there are still many users who have computers connected to their TVs, we believe this use case is likely to decline as users find better alternatives,” Boxee wrote.

The company also said that the lack of premium apps on the downloadable version of Boxee was due to extensive DRM and certification requirements.

While online donations account for only 7.6% of total charitable giving, according to Blackbaud’s 2010 Online Giving Report, it is the fastest-growing segment, increasing 40% in 2010 from the year before, according to a report from fund-raising software provider Convio.

That has helped juice the growth of online “giving platforms” with names like CauseVox, Razoo, Network for Good and GlobalGiving. These websites — some nonprofit and some for-profit — serve as gateways, making it easier for donors to give money and offering additional services such as website design and campaign promotion.

But those extras come with a price.

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I bought it Saturday night, watched it on the plane Sunday, and laughed out loud, a bunch. You should do it, and there’s a good chance you have — techland loved this story this weekend. Also, again: It’s very funny.

But What Does It All Mean? Not a ton. It’s an evolutionary step, relevant to a select group of people who make entertainment. With one interesting twist.

The part that isn’t new here is Louis C.K. using the Web and doing it on his own. We’ve seen a bunch of that over the years, mostly from entertainers who have already become famous (or at least semi-famous) with the help of mainstream media. Prince and Radiohead sold their own music only after they sold lots of songs for big music labels. Adam Carolla leapt/got pushed from TV and radio gigs into podcasting.

The new twist here is the way his experiment changes video “windows” — which determine when shows and movies show up on different outlets. By going direct-to-fan first, C.K. doesn’t shut off his chance to end up working the Big Media Companies he says he doesn’t want to work with. He’s just making them wait. So the people who really love him can get it right away, and he can capture almost all of that value in the transaction.

We’ll call it the Louis C.K. Window.

It can run for a week, or a month, or however long he’d like to be the sole outlet for his show. But then, if he wants to get more money for his product and reach a different audience, C.K. can sell the program to HBO or Showtime or Netflix for a “pay-TV window.” And then, eventually, to the likes of Comedy Central or FX. At some point, he can retail discs and downloads via Amazon and iTunes, etc.

The Louis C.K. Window is the most gratifying, because it’s cool, and because he’ll keep almost every penny his fans spend to see him. But it’s also likely to expose him to the smallest number of people.

Let’s say, for argument’s sake, that a million people pony up for the concert — basically, that is, everyone who watches his (great) show on News Corp.’s FX channel. (News Corp. owns this site, too.)

That’s a wildly optimistic estimate, and it will still be a fraction of the people that HBO, which has some 28 million subscribers, can reach. You can fault Big Media for a lot of things, but it remains pretty good at rounding up Big Audiences.

But that’s the great thing about the Louis C.K. Window. It lets Louis C.K. — and a relatively small group of people with big ambitions, and ardent fans — have it both ways.

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

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

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

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

OK. So who might do this?

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

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

This exclamation point comes courtesy of Zenith Optimedia, via its new (scaled back) ad forecast today. It pegs Google’s share of the overall Web ad market at 44 percent, a number that has been steadily increasing for years, with the exception of a one-year hiccup in 2009.

The other takeaways are also old news: Microsoft, Yahoo and AOL are foundering and have been for years (hence their new alliance). And Facebook is starting to generate a real ad business — as opposed to just a very sticky Web site.

And based on everything we’ve heard this year, the 2011 column will look just like the ones preceding it. Except it might show even steeper gains for both Google and Facebook, given the moves both are making (YouTube and display ads for Google, new tricks like “Sponsored Stories,” plus the overwhelming attractiveness of an 800 million user base for Facebook).

Quite reasonable to assume the two of them will end this month with more than 50 percent of global spending.

And if you didn’t understand that one, he offered another metaphor: A “200-pound chimp.”

In the following months, Bewkes cut back on his rhetoric, which may or may not have had anything to do with a lucrative deal to sell reruns of “Gossip Girl” to Netflix. But now that deal has been inked, Netflix stock has been crushed and lots of smart people think the video service may be on a permanent spiral.

So here’s Bewkes again, damning his new partners with very faint praise, this time in the Financial Times instead of the New York Times: Netflix and similar services (read: Hulu and Amazon, for now) can’t get the best stuff anymore, he says, and are stuck showing “archival content that nobody would want in Blockbuster.”

Not that there’s anything wrong with that! Bewkes adds. “It can do certain things and not other things. It can fly, it’s not a submarine. Don’t turn a hamburger into a cow.”

And that is how a pro mixes metaphors and backhanded compliments.

Again, remember that the real purpose of this stuff isn’t to hurt Netflix CEO Reed Hastings’s feelings — Hastings can probably take it — but to make Time Warner shareholders feel better about the company’s cable holdings. Because Time Warner’s cable channels — like TBS and TNT, and its HBO premium channel — are absolutely competing with Netflix for viewer time and dollars, no matter how much either company tries to insist otherwise.

Does this sort of semi-smack-talk entertain you? (It’s okay to admit it. Me, too.) Then you’ll want to check back on Tuesday: Both Bewkes and Hastings are scheduled to present that day at the annual UBS Media/Telecom conference. I’ll be there to record the slings and arrows, and I’ll report back.

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

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

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

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

Michael Bloom joined the publisher, which owns Rolling Stone, Us Weekly, and Men’s Journal, in May. On Friday afternoon, he sent out a memo announcing his departure. Here’s the bulk of the note:

As some of you already know, I’m moving on from Wenner Media. While it’s been a relatively short time, I’ve really enjoyed working with so many talented and creative people across Wenner’s incredible brands.

Over the past six months, a new digital leadership team has been put in place, and a lot of great work has been done to set the foundation of what will be a terrific digital future. I’m proud of what you guys have accomplished and I know that you will go on to do great things in 2012. I’ll certainly be rooting for you from the sidelines.

Unlike many of his competitors, Wenner Media owner Jann Wenner has never rushed to embrace digital publishing. For a long time, he did very little with the Web beyond handing over his flagship RollingStone.com site to RealNetworks.

That deal made him money, but it also allowed upstarts like Pitchfork to grab lots of territory and mindshare over the years. Last year, Wenner got control of the site again and moved to put most of it behind a pay wall.

Around the same time, Wenner declared himself unimpressed with the commercial upside of the iPad for magazine publishers, a position that put him at odds with the conventional wisdom. Since then, many of his peers have become much more sympathetic to his take.

Bloom, who had previously put in time at Sharecare, MTV, and AOL Time Warner, didn’t mention a new job in his note; Wenner Media hasn’t announced a replacement. I’ve asked Bloom and a Wenner rep for comment.

Google TV or a child of Google TV or the grandchild of Google TV will happen. The integration of television in Internet is inevitable. But the idea that it would happen overnight in Christmas 2010 was very misguided and that also cost us dearly.

Logitech CEO Guerrino De Luca during his company’s analyst day this week, describing his company’s failed Google TV/“Revue” boxes as a “mistake of implementation of a gigantic nature”

From big defense contractors to smaller, specialized start-ups, companies are cashing in on healthy demand for software and other technology that can sort through and analyze mountains of government and private-sector data to help track down criminals or look for signs of terrorist activity.

Police, for example, might use video-analysis software to spot a suspicious package in a crowded train station and correlate it to the license plates on a nearby car to find a potential suspect.

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That number is in line with some of DiClemente’s peers, but it’s still notable for two reasons:

• If it’s true, it means the video site’s revenue has now synced up with the price Google paid for it five years ago.
• Much more important, by DiClemente’s estimate, it means YouTube commands a staggering 80 percent of Web video revenues — he figures the whole market is worth $2 billion.

It’s possible that DiClemente’s numbers are a bit off. Hulu has said it will do more than $500 million in 2011, with the majority of that coming from advertising. So if both of those numbers are accurate it would mean that there was essentially no other video ad spending anywhere in the world in 2011, which seems like a bit of a stretch.

[UPDATE: Barclays analyst Perry Gold clarifies that the $1.6 billion YouTube estimate is a global number, but the $2 billion figure is its estimate for the U.S. market video market. Gold suggests that the global video market may be $2.5 billion to $3 billion, which would make the math a little easier to digest. But the other wildcard here, as some readers have noted, is that YouTube's revenues come from both video ads and display advertising, which means we're not comparing apples to apples.]

Still, point taken: YouTube is finally a big business that makes serious money. Perhaps it’s even profitable!

And if that’s the case, why is it pressing ahead with this Hollywood/“channels” strategy?

The big idea behind that one, after all, is to create stuff that advertisers will be happy to pay a premium for. But if YouTube is already generating $1.6 billion a year for non-premium stuff, why bother?

One possible answer: The channel strategy is a big focus for YouTube, but it doesn’t mean the site is abandoning what’s already working.

And while people who type stuff like to mention the $100 million YouTube is investing in the project (guilty!), bear in mind that the number is almost meaningless to Google. In fact, Google has already spent close to double that in the first nine months of this year — $173 million — on “content acquisition costs … primarily related to content displayed on YouTube,” and I’m reasonably sure that number doesn’t include the channel deals, most of which were only recently finalized.

So while the channels plan may augur Google’s intention to “take on TV” and “disrupt cable” and other storm-the-barricades metaphors, right now it’s just a toe-touch for YouTube head Salar Kamangar and his team. Turns out that what they’re already doing could be working just fine.

YouTube is trying to change some of that with its “channels” strategy, but Jeff Kwatinetz has his own plan for a middle route: The Hollywood producer is trying to make new episodes of shows that used to be on TV, and show them on the Web.

Kwatinetz and his Prospect Park production firm want to take two long-running ABC soap operas — “All My Children,” which went off the air in September, and “One Life to Live,” which will end in January —  and start making new episodes that should look and sound exactly like the originals. Except you’ll need a broadband connection to watch them.

If you’re one of the people who thinks many folks no longer make a distinction between stuff they watch on TV and stuff they watch on the Web, this will make perfect sense. But Kwatinetz has yet to win over enough financial backers, which is why he’s now talking to people like me, hoping we’ll help him make his case.

I don’t have a dog in this fight, except that I do think it’s an interesting idea. And I’m quite sure that someone will take a stab at it soon.

Netflix, for instance, has noodled around with the notion, and may end up trying the same strategy with “Arrested Development,” a former Fox comedy beloved by a relatively small group of fans.

So let’s quickly run through Kwatinetz’s pitch:

Cost: An average hour of one of his soaps currently costs ABC around $160,000 to make, which is outrageously cheap for TV and fantastically expensive for the Web. But Kwatinetz says he’s not going to be able to save much money when he moves the shows online — he’ll still be paying the same writers, actors and production staff. Overall, he figures he’ll need around $80 million to produce both shows for a year, and $65 million in hand to start up production.

Audience: Both shows averaged around 2.5 million viewers an episode on ABC this year. But Kwatinetz thinks he can make a profit if he can just bring 10 percent of those eyeballs to the Web. That doesn’t seem outrageous, given the commitment that some soap viewers make to their shows.

And in case you were wondering — yes, people who watch soap operas watch online video, too. Here’s a chart from a research deck Kwatinetz and his partner Rich Frank use in their pitch. It’s data from research firm Frank N. Magid Associates, which shows that about half of soap viewers (and ABC soap viewers in particular) are likely to watch Web video:

Revenue: This is the part that requires the biggest leap of faith. Kwatinetz figures that if Web TV portals like Hulu can command $40 CPMs for their stuff, he can, too. Particularly because his episodes will be new, not reruns that aired days earlier. He also figures he can resell the shows to traditional cable down the road, and/or sell them via distributors like Apple’s iTunes.

But there’s a reason that no one is making video with TV-level budgets for the Web yet, and that’s because ad buyers aren’t paying up consistently for it. YouTube’s new plan, for instance, assumes that its channel partners will spend considerably less than $100,000 per hour to make their stuff for the site. And the stuff that runs on Hulu isn’t dependent on that advertising revenue — it’s built with TV ad dollars in mind.

Compared to some pitches we’ve seen win funding in the last couple years, this one seems almost conservative. But Kwatinetz still doesn’t have all of the cash he needs to go forward.

“A lot of the investor pool that we go to are people with Hollywood backgrounds,” he says. “And while we feel that it’s obvious that convergence is here, we’ve met with an unusual amount of skepticism. So now we’re going out to Silicon Valley, and they seem to get it.”

Kwatinetz would like to have his shows up and running as soon as “One Life to Live” ends in mid-January, but unless he starts very soon, it will be hard to hit that deadline. For the record, here’s the rest of the Magid research, which won’t surprise people who read this site. But apparently it’s still an eye-opener for some.

Magid Daytime Soap Pres PP 100611 Rev

The video business has its challenges. It’s still a significant part of our business, so we’re not abandoning it by any means. We do see ourselves, and the mantra inside the company is to think of ourselves, as an ISP.

Charter Communications CEO Mike Lovett during his company’s earnings call yesterday, explaining that the cable TV provider would increasingly look to broadband revenues

Take Google Inc. When the Internet titan came onto the scene in the 1990s, the company first focused on building technologies for searching the Web before considering its advertising prospects, recalls Rishad Tobaccowala, chief strategy and innovation officer at Vivaki, the digital advertising company owned by Publicis Groupe SA.

It wasn’t until a competitor, GoTo.com, created a pay-for-placement search product in 1998 that Google got serious, he says. The way that service worked, a company would make a bid to appear at the top of a search results page then pay if a consumer clicked. Google launched a similar advertising product in 2000. The key difference was that the system took into account the relevance of the ad to decide its placement on the search engine results page, not just the amount that the advertiser paid.

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Now we call them blade servers, and today they account for about 15 percent of the world’s servers, with vendors as varied as Hewlett-Packard, IBM, Oracle and Fujitsu.

But the fundamental problems facing those who buy servers in large quantities remain the same: Technology demands more computing cycles, which servers with ever more powerful chips can certainly deliver, but companies have limited space to put them, limited power resources to run them and cool them, and limited ability to pay for it all.

Today Hewlett-Packard aims to change the discussion about the future of servers with something it calls Project Moonshot. The idea is pretty straightforward: Cram 2,800 servers into a single rack that would today house a few dozen, or at most 128, blade servers. Make them all share the same internal networking, cooling and power supplies and generally boost the number of servers that can fit into a defined space. One way or another, more efficiency is badly needed, and as Parthasarathy Ranganathan, a Fellow at HP Research I talked to yesterday, told me, the time has come to stop trying to squeeze “blood from a stone” in order to get it, but rather do something more radical.

The headline that everyone is paying attention to is that HP has selected an ARM-based chip from a Texas-based start-up called Calxeda as the chip it will use in its development platform, called Redstone. ARM, as you know, is a flavor of chip technology designed by the British firm ARM Holdings that’s widely used in mobile phones because it is very power efficient. ARM has recently started to make some inroads into general-use personal computing against the Intel- and AMD-based world of x86 computing.

But it’s less important to focus on the chips that HP is using here than on the fundamental shift that HP is trying to create. “We’re not trying to start a new chip war,” Glenn Keels, HP’s director of marketing for HP’s Hyperscale business, told me. There’s no reason that Intel’s Atom chips couldn’t one day be just as suitable for this. Make no mistake, though: ARM chips are coming to servers, one way or another.

Aside from the Redstone development platform, HP also aims to let potential customers kick the tires of the Redstone-style servers by running their applications on them and seeing how they perform versus traditional servers in a series of development labs that the company will open around the world. The first will be in Houston, and it will open in January. More will follow next year in Europe and Asia.

HP also named a handful of partners that are participating in the Moonshot project by contributing hardware, software and technical expertise. Among them are AMD; Canonical, the company behind the Ubuntu flavor of Linux; and Red Hat, the enterprise Linux company. It all looks very interesting, and if HP can nudge the industry in a direction where millions of servers packed into data centers can consume significantly less energy than they do now, everyone should be happier. The benefits would be the increased availability of computing power at a lower cost, with less relative energy consumption and therefore less impact on the environment. It’s hard to argue with any of that.

Here’s an HP video explaining what Project Moonshot is all about.

(Image is the cover of an extremely inaccurate 1959 children’s book imagining what a routine flight to the moon might be like for a 6-year-old boy.)

Over the past couple of years as AOL Chief Executive Tim Armstrong tried to repair the company’s Web business, rivals like Google Inc. and Yahoo Inc. focused on the next digital frontier: mobile. As a result, AOL now lags behind in mobile.

AOL ranked eighth in U.S. mobile ad spending with 0.8 percent of the $877 million market last year, according to research firm International Data Corp. Google, in contrast, leads with 59 percent of the market. AOL had 3.4 percent of the fixed Internet ad market last year, estimates research firm eMarketer Inc.

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Now on his own, Chernin is doing the same thing: He’s producing TV — Fox’s “Terra Nova” and “The New Girl” — and movies — “Rise of the Planet of the Apes” — and he’s making digital investments in highfliers like Flipboard and Pandora. And last fall, Chernin made a strategic move outside of the U.S. by opening up CA Media, an operating and investment vehicle focused on China, Asia and Indonesia.

8:57 am: Good morning from Hong Kong. Peter Kafka takes the AsiaD stage and after a few introductory remarks is joined by Peter Chernin.

A bit of patter and then the first question:

Peter Kafka: So you were the chief operating officer at News Corp for many years. A couple of years ago you left, you’re in TV and movies — seems to be doing quite well. What are you doing in Asia?

Peter Chernin: Well, I had been in the same job at News Corp. for 13 years. So when I made a decision to leave, I started thinking about — what I really spent most of my time thinking about was, where do I think growth is likely to occur? And what I set out to try and do was build a company in — you know, I had the luxury of starting with a blank piece of paper, and I decided to use that luxury to try and build a company that really focused on areas of the media that I thought had growth potential.

So it ended up in a couple of buckets. So I’m clearly in the premium content business, I’m producing –

PK: And you left with deals in place with News Corp.?

PC: I left with deals just for movies and television, so I produced movies, I produced television shows. I’ve been doing a fair amount of investing in digital, which is an area of growth. And then the other big area of growth, I believe, in the world, is going to be the developing world. And so one of the things I did was I hired a colleague of mine, a gentleman named Paul Aiello who had run STAR TV for me. And our thesis was that, between the two of us, we probably had more media experience in Asia than just about anyone else, and we felt that this is likely to be the sort of nexus of growth in both the immediate world and the tech world in the years ahead. And we thought there was an opportunity to bring sort of our — a combination of our expertise and at the same time not having any other legacy issues that come with these big companies as it relates to regulation, as it relates to partnership, etc.

So we started a company called CA Media about 10 months ago. We’ve opened offices here, we opened an office in Mumbai, we’re about to open an office in Beijing and we’re going to open an office in Djakarta.

PK: You’re not the first Western media executive to go, “There’s going to be a lot of growth in Asia; I should get over there.” Does your thesis differ from the NBCs of the world, Warner, Fox, lots of people who have tried to put stakes in Asia?

PC: Well, I guess I’d say, immodestly, the thesis differs in the sense — you know, I’ve had 15 years of experience of businesses, you know, we essentially built the largest media business in Asia in STAR TV. So I’m not sure the thesis is all — I’m not sure it’s an act of genius to say there’s going to be growth in Asia, and I don’t take credit for that; but I do think hopefully our thesis is different in that we have experience in there.

Paul, before running STAR TV, he’d spent 15 years in Hong Kong running T&T Banking for Morgan Stanley. So we’ve got a pretty deep experience base here.

PK: And this is the AsiaD conference, but obviously, territory by territory, things are radically different. So give me an idea of how you’re going to approach China differently than, say, India?

PC: Well, I think — look, so we’re going to approach all these places opportunistically. I’d say, on a superficial basis, I think the opportunities in China are likely to be more digital; there are more regulations as it relates to traditional media: You can’t own a platform, you can co-produce but you can’t own a content business.

On the other hand, there are much looser regulations on the digital side, although the first deal we’ve done is we made a deal to buy a significant portion of a sports business in China. We bought a mixed martial arts business in China.

India, I think, is likely to be more of both. India, there are big content broadcast platform opportunities, and also very significant digital opportunities there.

PK: And to be clear, this isn’t about exporting content that you’ve made in the U.S.

PC: No, this is trying to buy local businesses, buy and build local businesses.

PK: And do you think about — well, obviously you do — so in terms of the way that your customers are going to consume this stuff, do you assume that mobile is going to be more important in one country versus traditional TV, or is this all sort of up in the air?

PC: Well, I think that these are arguably the two most significant mobile markets in the world. They both have a little over 700 million –

PK: It’s India and China?

PC: India and China, they both have a little over 700 million mobile customers. And I think the interesting — the very interesting thing, particularly — I think the big difference beyond that is China has a pretty decent Internet infrastructure; India does not. India probably has 10 or 15 million broadband customers today, probably going over 100 in the next several years, but still, on the basis of population, very limited broadband distribution.

So I think what you’re going to see in both these places is the real growth of the mobile Internet; on some level leapfrogging the traditional Internet. And, I would conjecture, probably setting a standard for the growth in mobile Internet. And I think, in my mind, one of the questions that’s going to be very interesting is, traditionally, I think people have thought that the digital businesses here have largely taken U.S. models and copied them. I think the really interesting question is, are we going to see developments — particularly in the area of mobile Internet — from this part of the world, which ends up getting copied in the U.S. because it has so much more of a dominant presence in people’s lives.

PK: And you weren’t here earlier, but this has been sort of a running theme, sort of the idea at this conference, that China in particular, but lots of Asian territories are sort of replicating stuff they’ve seen in the U.S. and the West, and iterating on it versus creating new stuff. And we haven’t seen much of the latter, but you think some of that’s coming?

PC: I do think some of that’s coming.

You know, I think the other thing that’s fascinating is India. India is a fascinating place because, as I said earlier, low Internet penetration, right? Huge mobile penetration, launching 3G right now, supposed to launch 4G at the end of this year, and what does a country look like that has 3G/4G distribution and cheap tablets? And they are about to launch a $50 tablet, $45 tablet in India, subsidized by the government to $30 for students. And there are 700 million people with cellphones there, so there’s clearly a lot of mobile connectivity. But what does a country look like that’s got 300, 400 million low-cost tablets, and that becomes the dominant distribution infrastructure?

PK: And you think a tablet can be a dominant form — a primary form of media consumption, of video consumption? In the U.S., so far the iPad seems to be ancillary; it’s something you hold while you watch T.V. Maybe it’s a remote –

PC: [Interposing] Well, I think — what’s really interesting to me and — it’s a little esoteric, but one of the dominant things about the Indian television business, and there are 105-110 million paid television households in Indian — probably up to 150 — but the average Indian home has one television set. So if you look — to me, I think the really fascinating content question is, if you have a country with one television set — generally controlled by the mother in the family — you have a country with 350 million people under the age of 15 all about to sort of become teenagers, clearly not dying to watch T.V. with their mom and dad and low-cost tablets. What does that say about a potential distribution infrastructure? So I do think — and very limited Internet infrastructure. So I think — it’s a recipe, I think, for absolutely a very different content delivery experience.

PK: Let’s go back to the U.S. for a minute — for a bit. You are one of the key architects of Hulu, back when you were at News Corp. And, if anyone doesn’t know, Hulu is perhaps the most successful media company formed by a giant media conglomerate.

PC: It’s a low bar. [Laughter]

PK: It’s a low bar, but a genuine success. I think this year they are on track to do $500 million in revenue. And in some ways you can argue that Hulu became too successful and now there’s a lot of flux around it, but — bring me back — when you were kicking around the idea for Hulu with Jeff Zucker at NBC, what was the original thought? Why did you guys want to create a video Web site?

PC: You know, I had several thoughts in mind. One was, I felt that IPTV was going to be a big phenomenon and, you know, I didn’t want to see a replication of, essentially, HBO, where a third party had built a dominant business on the back of the studio’s content. I felt like we should build it ourselves.

PK: Are you speaking about YouTube specifically, or a player to be named later?

PC: A player to be named later. Secondly, I was concerned about YouTube, although the Google-YouTube acquisition was sort of in the middle of our thought process of — so I wasn’t concerned about it at the beginning, but — and what I was concerned about was I didn’t want to have one dominant video distributor, I felt it was really important to have a second. And then the third thing I was concerned about was — it felt to me, you know, one of the dominant issues in the television business in the U.S. is PVRs. You have 50+ PVR penetration. You have people skipping ads, and what I felt was, that’s in some way the least valuable … sort of chink in the value chain for traditional media, and I felt like if we could get people so that rather than PVRing things and skipping commercials, if it was all available the next day on an online platform with limited commercials, we would monetize, at higher levels, DVRs. And so I thought that was an important part.

PK: So you guys built this — so you hired Jason Kilar and a team, and they built a very successful service — very successful, out of the gate — and one version of the narrative is it almost became too successful right away and that it caused the studios and the networks to go in it and were actually going to pull some of the eyeballs away from our own viewing. And the other part of the narrative is that while this was happening, you guys were starting to see real money from the MSOs and cable operators in terms of retransmission — they were starting to pay you for stuff they hadn’t paid for before, and the idea of giving it away for free over Hulu became a lot less attractive. The third part is that you left Hulu — you left News Corp. — and the chief advocate for the company sort of went away, and Jeff Zucker sort of left NBC. Does that narrative — all the narrative … First of all, is that the correct narrative? That all those three things happened at the same time, and that’s why the people who own Hulu are no longer as excited to own it?

PC: Well, I think — first of all, I have a different point of view. I don’t have a different point of view on that narrative, but I have a different point of view than — which is that — I think that sequential IP distribution of product is a huge opportunity for the studios.

PK: Explain what you mean by “sequential.”

PC: Well, I think that you can figure out ways to window it in ways that you don’t destroy your existing businesses, and I think the DVR example I used is the right … The stuff is available the next day on a platform anyway with zero monitorization, so the idea that you are giving — this notion that you are giving away stuff for free, is free anyway. Eighty-five percent of Hulu viewing is stuff that was on for free for broadcast television the night before. So this notion that you are going to put it in a bottle and somehow — I think is silliness. The other thing you’ve seen — it’s out of the bottle and it’s available, and I personally believe the media companies ought to monetize it. I also genuinely believe that more distribution has always been better. You know, I will give you a very good example: Fox did something — which I thought was very smart and I take no credit for it, they did it entirely by themselves — which is, we premiered a new comedy series, that I produced, in September, called “The New Girl.” Fox gave away the pilot episode for free on iTunes, and on Hulu for a week or 10 days before. Most people inside the broadcast industry said they were crazy. Why give it away for free — all you are going to do is take away ratings from the pilot. By the time it came on it was — something more than a million people had downloaded or streamed it — it was the highest-rated new comedy in 10 years on Fox, and it’s clear lots of those people watched it again, talked about it again. So I am a big believer that don’t put it back in the bottle, number one. I think you are competing with PVRs, and I think you can figure out a way to sort of sequence the distribution that maximizes it. The other thing, to be fair, is — and the media companies, I don’t think want to talk about this that much, unless they have a viable, legitimate means of distribution — consumers are going to steal the stuff and, nobody may like that, but there is not a single episode of television, not a single movie, that is not available on a pirated site.

PK: It’s still harder to get to it than it was to get a song from Napster in 1999, but it’s not very hard.

PC: It’s not so hard that if you don’t — look, I think historically piracy has always been the same thing, which is the bulk of people, if you give them an easy, straightforward way to do it legitimately and at rational costs, they will do it legitimately. If you don’t, they will steal it from you.

PK: I was surprised that — as an experiment, I am not endorsing it — but I was able to start watching a pirated stream of “The Daily Show” while “The Daily Show” was still being broadcast live in the U.S. I mean, it goes up that quickly now.

PC:: So the idea that media companies should put this away and make it so it is not available, I think is a recipe for disaster. To be fair to them, I think that, you know — they just took it off the market; so they decided to keep it now so they seem to be this month back in the “embrace Hulu” mode.

PK: If you were there, if you were running News Corp, if this was one of your properties, what would you want to do with Hulu now? They have now split the business into a free business, where there is really going to be less content available and it’s going to take longer to get there … In business –

PC: [Interposing] I would want to do everything I could to support Hulu, and the reason I said that is, I think — you know, I am sure most people … it’s not easy to build one of these things, and Jason and his team have done a spectacular job of building a significant business in three years. But secondly, I think if you’re the studio, what you want more than anything is you want an important and significant competitor to Netflix. The last thing you want is for there to be one dominant online subdistributor, because right now, you know, there is huge money being spent, but if they own the world, the money is going to come down –

PK: But you were specific. You said Netflix. You didn’t say YouTube, you didn’t say Apple, you didn’t say Google.

PC: Well, right now it’s Netflix. I think Netflix, in terms of the IP distribution of studio content, they have a pretty big leadership. In terms of IP — streamed IP distribution and studio content.

PK: Netflix had a very rough summer. They raised prices. They’ve moved back and forth in terms of some strategy. The stock price is down 60%, and a lot of people say, alright, they had their moment in the sun, they are knocked out. You seem much more optimistic about their prospects.

PC: Well, from their prospective, yes. You know — I think they’ve built a terrific business and they have reached a point of general critical mass. They are approaching right below 30 million subs. That ‘s a lot of cash being generated; a lot of cash to spend on the content business, and they are out there making big aggressive deals, buying exclusive content, and so I think they are a real source.

PK: They are buying some exclusive content, and then primarily what they are buying are repeats from the big studios.

PC: I meant, but they are buying those repeats exclusively. You know, they are out there buying those “Mad Men”s of the world — they just did a big WB deal exclusively, they just did a DreamWorks.

PK: And from the network’s perspective, this all seems like found money. These are repeats, we have extracted all the value we can, you are going to give us more money that falls to the bottom line. We win if you want to buy our repeats, great. Do you think that’s shortsighted on their part?

PC: I don’t think that’s shortsighted. I think what’s shortsighted is, I think they should be doing everything they can to make sure there is a competitor, because if there is not a competitor, at some point the amount of money they are spending will come down. And I think their best hope for a competitor is Hulu.

PK:: So you spent a lot of time at a very big media company; you pushed a lot of the digital efforts there in addition to Hulu; you did several … You oversaw Myspace, and News Corp. in particular seemed to have unwrapped all of those investments. They sold off Myspace for spare change. They bought a company called IGN; they are spinning that off, and Hulu they seem to have boxed off. Do you think News Corp.’s uncomfortableness with digital properties is specific to them or do you think that’s reflective of all of the established media companies?

PC: Look, I think these things end up being a combination of both. I think there is an overall discomfort on multiple … there are specific issues going on.

PK: We will leave it there. Speaking of digital — I said this yesterday and it’s still true — everyone who was on stage with me has either worked at Yahoo or wants to buy it. Your name has come up several times as a potential Yahoo buyer. Is that still something you are interested in?

PC: I heard Jerry [Yang] yesterday say it’s not for sale, so it’s kind of a moot point.

PK: I think he said all options were on the table.

PC: Look, to be honest, I spent a fair amount of time looking at it a year ago. I’ve done very — and it seems so confusing to me, at least, right now — that I’ve spent very, very little time in recent months on it and, you know, I don’t want to rule out anything. On the other hand, I’m not — you know, it seems like such a confusing situation, it doesn’t seem like right now it’s worth … investment.

PK: Can you see putting energy and time into building a brand-new digital asset? Could you create a new all-digital distribution channel in the U.S.? Is that possible for someone like yourself, sort of standing outside the … companies?

PC: Well, I think there are numerous different ways, you know, one of the things I — I am certainly very interested in the area of digital media distribution, and I think that, you know, you’ve seen the Internet create dominant players in so many areas, you know. A dominant search business. A dominant e-commerce business. A dominant social networking piece. And I still think that media distribution is fairly fluid and wide open, and so that’s appealing to me. I think some of the investments I’ve made are absolutely playing that. I think Flipboard — which is an investment I made a year and a half ago, almost two years ago — is a fascinating model for digital distribution of content. You know, I just made an investment in Tumblr, which I think is a really interesting model. So I think those things are interesting.

PK: Can I ask about those two before we go any further? Because Tumblr — I’ve used it and seen it grow, and the best I can tell it’s sort of a dumbed down, in the best way possible, version of Blogger. It’s a blogging platform. It seems hard to understand what they’ll do with that business. They’ve made no real efforts to monetize that in any way. But you, obviously, seem comfortable with that, you’ve put money in there. Where do you think that company goes?

PC: I think that — what interesting about it to me — first of all, the growth trajectory is … It’s astonishing right now, the growth trajectory that we’ve seen with Facebook, we’ve seen with Twitter, etc. And to me, what’s interesting about it is a couple of things. One is, it seems to fall in between Twitter and Facebook, which is that it’s an opportunity to — it’s Twitter-like in its ability to express yourself, but without — and I don’t say this negatively — without the sort of restrictions in terms of number of characters and the ability to add photos and video and to add a much deeper, richer level of self-expression. And it’s Yahoo-like in the ability to communicate as your real self and express yourself. I think what it says about the content distribution business is that — what’s most interesting about it is that it is ultimately a way of — it’s a self-publishing content business, and I think where it has really gained traction is people retweeting, resending tweets, resending other people’s blogs, resending other people’s photos and resending other people’s videos. And I think this notion of self-publishing just in content is very, very profound and significant. And so I think that I look at that as being interesting.

PK: So you’re fine with that notion — build the service, build the platform; we’ll figure out ads as we go or monetization as we go. And Flipboard is a different take on this — it’s sort of a shell for existing content companies to distribute their stuff via tablets.

PC: Well, I think, to me, what’s most interesting about Flipboard is two things, which is, one, in a very much Steve Jobs sort of sense, a most beautiful content interface I think that we’ve yet seen created. I think it’s an absolutely beautiful interface to present content, and I think products matter. I think people want — the products that deliver a service are absolutely critical to people, so I think that’s one. The other is, I think it’s a very interesting sort of proxy for social distribution of content. The ability to sort of tie in your Flipboard feed to your Facebook feed and ultimately… You know, to me what feels extraordinarily interesting is –

PK: The progress …

PC: There’s so much content available right now, and I think that consumers are and will become more interested in organizing principles that allow them to figure out ways to navigate through all that kind of — it’s a sort of next generation of portals, which is, portals were early on … I think that what consumers are really looking for is, how do I wade through all this stuff and how do I discover this stuff?

PK: And you want to make those choices, as opposed to having stuff served to them.

PC: I think that they want to — they want to have stuff served to them in a … targeted way. So I think whether you see it — Pandora, which is another company I invested in –Pandora has clearly figured out a way to serve music content in a very specific way. Flipboard is using your social network as a way of doing that. I think that you begin to see that there are other targeting things, that are other recommendation engine things, but I think that beginning to put these technological tools around products that deliver content that’s relevant, is meaningful to consumers and has a lot of potential.

PK: So these are investments in other people’s digital projects that you’ve made. Could you imagine creating — I mean, is there opportunity to create the equivalent of a digital HBO, given the new distribution channels?

PC: I think there is certainly next-generation original video distribution platforms. I think it’s challenging, it needs serious work and I think that part of the issue in my mind is that what you’ve seen in Web -based original video product is that, for the most part, it’s been low budget, low-risk stuff, and I think the key is to do stuff that (a) feels like it specifically takes advantage of interactivity, etc., and (b) to start delivering premium content because, you know, consumers are very, very sophisticated and they are not interested in cheap, they are interested in better.

PK: There are lots of people watching very crudely made stuff. They seem happy with it but one of the reasons it’s very crudely made is there’s no ad budget that supports …

PC: Well, one of the other investments that we’ve made is that we’ve backed a gentleman named George Strompolos, who was in charge of all the content relationships at YouTube … really an attempt to aggregate some of the key individuals sort of, these guys who are getting 10-15 million views of low-budget content. But I think it is a way of trying to aggregate additional advertising resources, allowing them to promote each other, almost to think about … dirty word but network-izing them.

PK: And YouTube is trying a version of this themselves, they are going out to Hollywood and trying to seek content. What about the idea of going to someone and saying, alright, we are going to give you original content, it’s only available on the Web or digital distribution — we would like you, the consumer, to pay for it. Do you think people are willing to pay for that stuff?

PK: I think — I personally believe people will be willing to pay for it, but it needs to be genuine premium content. Look, the interesting thing I would think about is, HBO spends about $500 million a year producing original content. They spend a huge amount of stuff, you know, the core HBO series that we all think about, they probably spend about $200 million or $250 [million] because they are doing being movies and miniseries, they’re doing sports, they are doing kid’s programs. One of the interesting questions is, could you get 10 million people paying you $2 a month for HBO original content? For $200 million could you create a suite of content that is of that level of quality, and could you get 10 million people paying you $2 a month? I think you could.

PK: So why not do it?

PC: I think there’s a lot of chicken-and-egg things in there. It’s something I have sort of been playing around with and thinking about but, look, I personally am a big believer in –

PK: I think you would have people flocking if you could say, here is HBO-like stuff that’s $2 a month. There are lots of folks. Just anecdotally from my readers that say, I would love to get HBO but I don’t want to get a cable subscription, or I don’t want to pay $15 a month.

PC: And I think if you — HBO is not my business, and I’m by no means putting them — I don’t think the movies are why people are buying HBO at this point.

PK: What about sports … you were at News Corp. when they broke … Fox via the NFL. Does the NFL or any other sports league, is it worth overpaying a premium to create a digital window?

PC: Yes.

PK: How much would you pay for the NFL?

PC: Well, given that ESPN just paid $2 billion for “Monday Night Football,” you would be paying probably $3 billion.

PK: Could you make that work though, on an all-digital platform?

PC: Well, you certainly couldn’t make it — first of all, nobody can make NFL work other than the NFL on a standalone basis. I don’t think there has ever been an NFL contract that has been profitable on a standalone basis for the person doing it. So you have to look at it as a strategic weapon. So, you know, if you look at Direct TV, it clearly looked at Sunday Ticket as a weapon to sell overall subscribers. They are not making money selling Sunday Ticket for … they are making money selling that many more Direct TV subscriptions. You know, at Fox we never made money on the individual contract, but it allowed us to significantly rejiggle our affiliate base, it allowed us to start Fox Sports, it gave us tremendous leverage in the cable channel business. So I think that if you are an online distributor, you need to look at it strategically, and that’s a big bet.

PK: So it seems pretty clear, Google and YouTube ought to buy NFL rights? That’s my theory.

PC: It’s a big bet.

On to questions from the audience …

Q: Yes, good morning, Peter. My name is … with … Communications, we are a mobile Internet operator in Malaysia. So, two questions. The first one is, programming grid: In light of all these new ways to discover content, is there still a role for programming grid? For the linear notion? Those days are numbered, right?

PC: By programming grid, you mean what show follows what show. I think those days are highly, highly numbered. I’ll give you an example. We premiered this “New Girl” show, brand-new comedy, historically very difficult to launch new things. We premiered it behind “Glee,” No.1 drama on Fox, probably the No. 3 drama on television and, you know, I was thinking about expectations the night before and I kept saying, if we can hold 75% of the “Glee” audience, I would have been thrilled. And we did 30-40% more then “Glee” on a brand-new show no one had ever seen before. Is the grid as important as it used to be?

No, I think the grid is no longer as important as it used to be. That show was clearly quite capable of — an audience, and you see the same thing on the other side — which is shows that come after the No. 1 show on television, which lose 40, 50, 60% of their audience — and I think that the grid becomes less important every single day. You know this is really sort of silly jargon but, you know, as in relation to the media business, the one truism I have always felt is, no one can predict where technology is going to go and no one can predict … what I can tell you with absolute certainty is the effects of technology and the effects of technology are, consumers have more choice and more control. That’s what happens with every single piece of additional technology — there is more fragmentation and more choice and you have less ability to control them to get them — and in that sense, the single most overwhelming piece of technology for the television business was the remote control. When they didn’t have to get their ass off the couch and go change the channel, it really changed the amount of control that broadcasters had … and every single step gives you less control. And the grid was about control.

PK: This season is the first season that Fox has started window content online. For the last couple of years, you could watch any Fox show the day after on Hulu; now they have made that only available to Dish TV — it’s called authentication. As someone who is putting on new shows — you’ve put on “Terra Nova” and “The New Girl” this year — can you see that effect one way or another on your shows?

PC: Yes, I would prefer they didn’t do it.

PK: You would prefer your shows be available on Hulu or —

PC: Well, certainly for a new show you would prefer as much circulation as possible. Look, I think that they have their own reasons which is, you know, they have a gigantic multibillion dollar distribution infrastructure which they are trying to protect. But speaking as the producer of a show, I would rather –

PK: You think you lost eyeballs.

PC: I would rather it be ubiquitously more available, so more people have a chance to sample it.

Q: My following question — just a quick following question. So, digitalization of broadcast TV … hasn’t created much new business models or innovations in the Western Hemisphere. In the emerging markets in Asia, do you see digitalization of … opening up new business models and innovation opportunities, and if so, how?

PC: Well, I see it opening up more innovation than it did in the West because, you know, the West’s digitalization came into an existing, enormously rich and vital distribution infrastructure. It was a world in which there were already 200 or 300 cable channels, satellite distribution, cable distribution, and so digitization wasn’t offering anything that spectacular to consumers. I think in a less-developed television ecosystem, digitization means more. I think one of the most significant things that’s going to happen in the television business on the globe in the coming years, in the next two to three years, you are about to have — there is no digitalization of cable content in India. India is about to go digital on the cable business. One of the fascinating things is most — 85% of the average cable subscription never gets up to the channel or the cable operator. It is kept by the local operator, who just pretends … operator will have 200 subs and it will tell STAR, well, I actually have 80 subs or 200 subs and pay for very few — and pay for 10 or 15% of the subs. With digitalization you are about to have a huge influx of capital coming back up the chain, which is going to lead to clearly more money to be spent on content, but also the beginning an explosion of niche channels, an explosion of additional content. So I think digitalization in this part of the world where a West-developed television ecosystem is going to be quite meaningful.

Q: You talked a lot about how Netflix needs a competitor like Hulu. I am curious — Amazon didn’t come up, I mean, and they obviously are going to be a big player in the Android tablet business and what they have done in books. How do you see them as a factor or nonfactor in terms of movie/TV content?

PC: Well, I think that there is — there are several people who have an opportunity to play a meaningful, meaningful role. Clearly Netflix is already there. Amazon has an enormous opportunity. It’s very powerful, has hundreds of millions of credit card accounts and people already going there for content. Less video content now, but — clearly, Apple is a very, very important player and is going to continue to be an important player. YouTube — whatever the current number is, a gazillion video views, so an enormous amount of people — the dominant video distribution platform on earth, not yet for premium content, but a huge opportunity. Microsoft, currently today the No. 1 premium online video should be 50 million Xbox Plus subscribers. So I think there are a number of players, all of whom can be significant. So I don’t think Hulu is by any means — and I think if you are sitting in a studio, you hope that they all get aggressive about it.

Q: And the follow-up questions, in the previous discussion with … and Sony … some discussion on Internet TV, there was also a lot of discussion on Apple and what others can do. How do you think about Internet TV, both in the developed and the developing market? More in the developing market here?

PC: Well, do you mean from a hardware prospective, or do you mean from the distribution platform?

Q: We’ve got all these hardware folks in Asia creating all kinds of … T.V. The problem is there is not as yet a cohesive content strategy, and then you’ve also got this emerging competition from tablets and so on, and then the whole lean back, lean forward — I was just curious, if remote control was the biggest innovation for controlling the previous generation of television, how do you think that Internet TV becomes a real business?

PC: I think, clearly, the hardware guys are going to ship lots of connected television sets, and I think the point you raise is exactly the right point — it needs a content services layer and whether — and I think the question is, does that layer come from the hardware guys — you know there are three or four places it can come from. It can come from the hardware guys, particularly if they ever figure out a way to form a consortium.

PK: Samsung, Sony, LG.

PC: Right. It can come from the pipes, you know, AT&T, in the U.S. AT&T, Verizon and the cable guys could decide we are going to be the ones to figure out our way … It could come from the big tech players, and ultimately the content guys could play a role. So any number of those people can play a role in it. I believe –

PK: Who’s got the most leverage there?

PC: Everybody — every one of those players has got some real leverage and a real position to play from. I think it takes leadership.

Q: My question is about the Nielsen rating system in the States that has historically been what … defines success. With the digital age, with people watching content online and the Nielsen ratings doesn’t actually count that into their statistics. How would you … update themselves and track those things, because a lot of shows that are good and have a big following online … doesn’t get counted, so the shows get canceled. Should they really start being a little bit more proactive in following the online site viewers?

PC: First of all, let me say two things. The guy who runs Nielsen is one of my best friends, and we went to war with Nielsen and Fox. We had a big public war with them three years ago, so we have been as aggressive about their shortcomings as anybody. To me the issue — first of all, they have started to count these things. I think the question for Nielsen going forward is the following, which is the sort of hardware to collect viewing information which was originally Nielsen’s platform, they were able to deliver … and then they were able to deliver meters in households. That’s no longer an issue. You can ultimately track ratings exactly from set-top boxes, from IP addresses. There would be absolutely perfect rating information and Nielsen has started to get quite aggressive about measuring other screens. I think the real challenge and the issue for Nielsen or anybody else is going to be the analytic side. And there is going to be so much data available; I think the real question is going to be the level of sophistication on the analytics of all that data because the days when — 50 years ago when Nielsen got started, that data was at a real premium. Nobody else was capable of delivering diaries and extrapolating that. The data right now is the easiest thing in the world to obtain. Every set-top box in the world knows exactly what each person watches. It will get even more sophisticated with IPTV and individual devices, but there will be so much data, the analysis of that data will become that much more demanding and demand that much more sophistication. And to be fair to Nielsen — and, you know, I have been very public with annoyance with them — they are a pretty good analytics company in many ways.

Peter Chernin Session Photos

The video rental company has a new licensing deal for shows from the teen-centric CW network, which is jointly owned by CBS and Time Warner’s Warner Bros. studio.

This one has been in the works for quite some time, despite the fact that Time Warner CEO Jeff Bewkes had made a point of belittling Netflix as “the Albanian Army” last year. But last spring, as the two companies continued to talk about distribution deals, Bewkes softened his rhetoric and explained that he would be quite happy to sell his reruns to the service.

Like other Netflix deals, this will be for reruns that are at least one season old — the company has stayed away from licensing “in-season” content. But if you want to watch last year’s “Gossip Girl” or “Vampire Diaries,” you’ll be able to stream those starting this Friday.

And like other recent Netflix deals, this is an “output” deal, which means Netflix gets the right to run shows that haven’t aired yet; the company has locked in everything the network will air through the 2014-2015 season. Netflix executives are increasingly pointing to this part of their content deals as a differentiator between their service and Amazon, which has been licensing much older shows for its streaming content deals.

The deal isn’t exclusive, though. Warner Bros. and CBS can still sell the shows via traditional distributors and other digital providers, with some restrictions.

Reminder: Netflix, which has lost about 60 percent of its market cap since this summer, reports Q3 earnings Oct. 24.

The shift has led to a thriving market at 30,000 feet to provide Wi-Fi, movies and TV shows on travelers’ smartphones, tablets and laptops.

About 1,260 aircraft, or more than a third of all mainline passenger airplanes in the U.S., now offer passengers Internet access to surf the Web and check email. The connection can be accessed at 10,000 feet, the federal minimum altitude to use portable electronics.

Read the rest of this post on the original site »

Yesterday, it hinted that it will share its plans for leveraging Facebook’s new HTML5 mobile platform, but that there are other surprises to come. The event is titled “Unleashed,” so expect a lot of talk about where the company is headed with mobile in general.

Stay tuned at 10 am PT to hear the latest from the mega-successful social games company, which is currently seeking to raise $1 billion in an initial public offering.

9:57 am: Just showed up, expect the show to kick off any minute.

The press conference is taking place in Zynga’s new headquarters. In the atrium, there’s a big stage set up, and the press gallery is sitting in a bunch of retro chairs. Feels a little bit like an MTV talk show.

Zynga invited my dog, Fletch, to come play at the event, but he doesn’t have a travel budget, so he had to stay home in Seattle.

Pretty fitting that Zynga’s office, a.k.a. “the dog house,” has a hot dog stand. As you may know, the company was named after the dog, Zinga, owned by founder Mark Pincus.

10:10 am: The event may be starting. We are watching an infomercial on how Zynga was able to contribute to Haiti relief after the earthquake.

10:25 am: Ok, while we waited to get things started I was able to go get a Blue Bottle cup of coffee that takes five minutes to drip into the cup. What a perk!

Someone is getting excited. Just heard my first barking dog.

10:35 am: Here we go. There’s a montage of games from Poker to CityVille and Adventure World, Words With Friends and FarmVille. You’ve probably played one of them.

10:37 am: Founder and CEO Mark Pincus has taken the stage.

This is the first media event of any kind we have done in our new building, he says.

He jokes that they are about games, and we should feel comfortable being loud today.

He said they are launching 10 new products today, all of which have been in development for a year. Today we will meet the people and faces behind the innovation.

Pincus: There are 1,700 Zynga employees in this building alone, and at some point they will come out and say hi to us.

Pincus: He wants to know how he can get “you guys” to play games. We are all busy, and how can he get us all to play.

For us, it’s a platform. We aren’t the company that will make the next hit game, we are trying to do something broader than that. We want this experience to make up a platform for play.

10:44 am: Pincus says they spend a lot of time on the “FTUE,” or the “first time user experience.”

We want to give you a five to 15 minute experience that feels like a meal, we don’t try to ask you to change your day. Just like a good show, and I’ve been addicted to “Breaking Bad,” if you do like our games, we hope to give you enough depth for you to invest three, six months or a year.

We are going to show off Zynga Direct, whether on the Web or mobile, we are going to build a whole sandbox around the games and not just in the games. Facebook is here today and we are excited to be their launch partner for their platform announced yesterday. We’ll be showing off three HTML5 games that will be part of that.

When we unveil the pieces of Zynga Direct, we hope that you see that it is the deepest Facebook Connect experience on the Web today.

10:48 am: We are showing you CastleVille today, which is the next Ville game in our franchise. That game has been in development for more than a year, and it has beautiful art. It has new ways to collaborate and get ahead by partnering with other players in the game.

We are going to show you a new casual games category today in the hidden objects genre.

David Ko, Zynga’s chief mobile officer, will be showing a number of mobile titles launching in the next few weeks.

10:51 am: Pincus is now handing over the stage to Cadir Lee, CTO, who is in charge of building out so much of the technology in the back-end.

10:52 am: Lee: The first thing I want to talk about is our gaming engine, which has been built from scratch on Adobe’s Flash 11.

We have our own private cloud called “Z Cloud,” which is focused on being able to play our games all of the time no matter if it’s Christmas Eve. We’ve been known to deploy a 1,000 servers in one week in order to support a new game.

This isn’t the sexy stuff, but Zynga’s cloud and gaming engine technology is key. Often, the company is considered an analytics-driven company, rather than a gaming company. Lee is touching on some of this now.

Lee: We’ve long been known as an analytics company, which shows how our players engage. How do we match people up, so that you can have a social experience with a person across the street or around the world. How do we connect you with the right person at the right time.

Roy Sehgal, VP and GM, is now on stage to unveil a new genre, called “hidden objects.” It’s one that Disney’s Playdom has developed through a game called Gardens of Time.

Zynga says its first game is called Hidden Chronicles.

The concept behind hidden objects is finding clues hidden in a room, sort of like looking for Waldo. They are right in front of you, but difficult to find.

Up until Playdom’s release, critics didn’t believe that the popular PC download category could be made into a social game.

Sehgal: It’s going to be social. It’s going to be extremely easy to learn, but hard to master.

10:58 am: You can play with your friends to see who can find the most hidden objects, or provide hints to your friends.

This game is extremely interactive. No matter how many times you play an individual scene, it will be fresh. I believe it will be one of the most beautiful games you will play.

On the screen, Sehgal is showing various scenes that take place on a train, underwater or in the outdoors. The art is rich and historic-looking.

11:00 am: Now there’s a demo of the new Mafia Wars 2, which just launched yesterday, and is promising to be a much richer experience than the original version that came out three-plus years ago.

Since it’s already out, feel free to check it out on Facebook. No need to read a description here.

11:06 am: Mafia Wars 2 is also now live on Google+, which is the company’s second game on the platform after Poker. Remember, Google has a substantial stake in Zynga.

11:07 am: There’s an update to Zynga’s Poker game next. It was launched in July 2007, and after four years, we are still the largest and most social Poker game.

Zynga is unveiling Zynga Casino, including Zynga Bingo.

Casino games has been identified as one of the leading categories on Facebook with others experiencing lots of success, including DoubleDown Casino.

Zynga Bingo will be launching soon.

11:10 am: Bill Jackson, Creative Director, is now on stage. He’s from the company’s Dallas studios, and he says they developed the latest in the Ville franchise, called CastleVille.

The other Villes in the franchise are FarmVille, FrontierVille, CityVille and now CastleVille.

Jackson: It’s a new level of social, and offers the best of all the Ville games have to offer.

The game has a whole new cast of characters, who look like they are from Shrek, complete with rugged heros and refined ladies who fall in love.

Jackson: CastleVille takes storytelling to a whole new level, and in a personal way. Your journey through the game is different based on who you are.

Zynga is bringing massively mutliplayer role-playing games to the mass market.

CastleVille will have music from an entire orchestra that was recorded in Seattle. Jackson says this is the first time this has been done in a social game, although it is common in console games.

11:18 am: The peanut gallery has been asked to turn around to see all of the Zynga employees — or at least half of them — that have gathered around the balconies of the atrium.

Pincus: We just wanted you to see a few more faces.

Pincus is now introducing John Schappert, who recently joined Zynga as COO from Electronic Arts. He has taken over running all of our games, leaving Pincus to be more entrepreneurial.

11:22 am: Schappert: We are building every kind of play for everyone, everywhere.

We are building on iOS, Facebook, Android, Google+ and Tencent in China.

Helping us deliver on play anytime, anywhere, is David Ko, chief mobile officer.

Ko has an update on Zynga’s mobile plans, which have not been as aggressive as others have been in the space so far.

Ko: We’ve always felt that we need to be the best content creators out there, regardless of what platform.

It’s my pleasure to not talk to you about one or two new games, but five new games launching shortly. It is around Facebook’s HTML5 platform announced yesterday.

The first two are Words With Friends and Poker, and the third is FarmVille. All three games will be available tomorrow.

Another new game is Mafia ShakeDown. You’ll be able to request missions and have the opportunity to be the next “Don.” This game will be coming soon, so stay tuned.

The last game is called DreamZoo, which is Zynga’s first game in the zoo genre.

In a short video, Zynga shows off DreamZoo. You can collect animal varieties and feed and clean your animals.

11:29 am: Schappert is back on stage. He says they have over 60 million daily active users, and they play games over two million minutes everyday.

He is unveiling something called Project Z, which is a Facebook Connect enabled platform. It allows you to play in an environment that’s tailored just for games.

In a sneak peak, a video says players are able to chat, share and form instant communities worldwide.

Schappert: It’s a social gaming playground. You can start a game on Project Z and then continue on Facebook and vice versa. It’s not launching today, but people can start creating a gamer tag starting worldwide today.

11:32 am: Pincus is back on stage to wrap up the presentation:

We really want to build a platform for play. We haven’t changed our vision since starting. We want to be the biggest macro bet on social gaming. We believe in social gaming. We believe that everyone around the world will embrace play, so everything we are doing is an attempt to bring that to life.

We know it’s early and it’s primitive, we know so much of game play and social-ness is early, and over the next few years it’s going to be so much more. It’s going to be mobile. There’s going to be a World of Warcraft feeling, but something you can understand in five minutes.

11:35 am: OK, that’s it folks. Formal presentation is over.

In summary, before today, there were a few niches that Zynga had not yet entered. That left opportunities for competitors to do well on Facebook. With Zynga’s 10 announcements today, including a number of new mobile and social games, the gaps have narrowed significantly.

Zynga has expanded into new genres, like hidden objects and more broadly into casino, and has five new games on mobile. It is also launching its all-new standalone online game network separate from Facebook that goes direct to consumers.

If Zynga was looking for a big bang before its IPO, this might have been it.

Thanks for reading — more coverage and analysis coming shortly.