After what turned out to be a pretty good year in 2011, Hulu announced last week that they are planning to invest $500 million in new content initiatives. That will undoubtedly include more pricey agreements with traditional content providers, but today the company revealed another place it plans on spending that money: on original programming.

A week before the debut of "Battleground," Netflix will be airing its first installment of original programming as well. A mobster drama called "Lilyhammer" is expected to be the first in a series of Netflix-only shows to launch over the next two years. Next year, the canceled-yet-beloved series "Arrested Development" will be making its triumphant return to screens of all sizes, not through the Fox network on which it originally aired, but exclusively through Netflix.

Web-Only Premium Content: A Disruptive Force?

As early and unproven as this Web-first model is, it may well represent the next phase in Web TV and pose a tangible challenge to traditional content distributors. Such a challenge would come despite the predictions of people like Mark Cuban, who recently wrote a blog post outlining why the television business as we know it isn't going anywhere, despite advances made in the online streaming industry.

Cuban, himself the chairman of a cable network, touts the immediacy and timeliness of the traditional TV model, as well as its inherent value to advertisers, who he says prefer to have their messages reach viewers within a shorter timeframe.

Still, if Web-only series such as those premiering on Netflix and Hulu do particularly well and spawn more like them, that will be one less reason for many people to keep their cable subscriptions, if they ever sign up in the first place. With the arguable exception of live sports and certain popular, premium cable programming, the incentive for subscribing to cable continues to decline, especially as prices climb.

Long the go-to source for LOLcats and viral, homemade videos, YouTube is getting serious about premium content as well, with Google actively seeking more professional video content and redesigning the site to help better showcase that content. This push for premium video comes as Google TV is being revamped and added to more connected devices and television sets.

Cable may not go extinct overnight, but if what we saw come out of CES last week is any indication, the future of TV is very much connected to the Web and far more interactive than ever.

That money came from a combination of ad sales and paid subscriptions to the service's Hulu Plus offering. They now have 1.5 million paying subscribers. It's a far cry from Netflix's more than 23 million paying members, but then again Hulu Plus only went live in 2010. According to Hulu CEO Jason Kilar, this is the fastest any paid video streaming service has reached 1.5 million users.

Hulu's growth is also fueled in part by its continued expansion into other markets around the globe as well as the effort the company puts into making its service available on a wide range of devices. Most gaming consoles, smartphones and tablets now have an app for Hulu Plus, even if many of them can't access the advertising-supported Hulu website. This year, Hulu launched dedicated apps for the Kindle Fire, XBox 360 and Nook e-reader, among others.

Despite the long list of supported devices, Hulu's cross-device compatibility could be even better. The service has irked users of Boxee and Google TV-powered units by blocking access to those devices. Even though Hulu Plus is available in the Android Market, that app can't run on Google TV and when you try to navigate to Hulu.com from the platform's Web browser, the site is blocked on Hulu's end. The same is true of the Boxee Box. A long-awaited Hulu Plus app for the Apple TV is allegedly ready and working, but has been held up due to political reasons.

But the real threat, as Nintendo of America's own president has admitted, is not the traditional gaming console manufacturers. It's Apple.

A handful of games originally made famous by Nintendo, such as Tetris and Megaman, have iOS apps that have done quite well. Few doubt that the company could make serious money from iOS versions of classics like Super Mario Bros, but so far they've refused to do it.

Mobile Gaming is Huge, But iOS is a Risky Move For Nintendo

It's a tough decision for Nintendo. The video game company has traditionally used its popular game titles like Super Mario Bros and the Legend of Zelda to help fuel demand for its own hardware, such as the Wii and handheld 3DS. Those characters haven't even shown up on competing consoles , which gives Nintendo a unique advantage over systems that often have superior graphics and more robust features. Suddenly making those beloved games available on iPads and iPhones runs the risk of cannibalizing the company's core business.

Indeed, their latest handheld gaming system, the Nintendo 3DS, was met with lackluster sales when it launched, despite the fact that its first console to include 3D graphics that don't require special glasses. The company slashed the price of the 3DS significantly, which improved sales somewhat.

But is the dedicated handheld gaming device inherently doomed? Serious gamers and hardcore Nintendo fans can probably be counted on to keep snatching up devices the company releases, but general consumers increasingly use their smartphones to play video games, and most people probably don't want to carry around a second device just for games.

It's not just Apple that's moving in on this space. Android is growing rapidly as well, and the forthcoming Kindle Fire tablet will have access to Amazon's own Android app store, videogames and all.

Features like the ability to stream movies and TV shows via Hulu and Netflix are certainly nice additions to video game systems, but it may not be enough to minimize the damage done by the growing smartphone and tablet markets. After all, those devices already have Netflix and Hulu, plus countless other content sources, not to mention hundreds of thousands of other mobile apps.

Photo by William Warby.

The announcement comes after bids from several big tech companies evidently failed to pique the interest of Hulu's current owners. In July, we wrote about why Amazon would make an ideal owner for the service and fold it into its Prime video offerings. Other serious contenders included Yahoo, Dish and Google.

For Google, the purchase could have helped the company shore up its digital video properties, something thats crucial to its future advertising revenue, as well as to the survival of Google TV, which has been met by a lukewarm reaction by consumers so far.

Alas, it was not meant to be. Without offering a shred of detail, the company's owners have pulled off its "for sale" sign, at least for the foreseeable future.

For something that may seem like a relatively minor detail in the course of one's day, this Ad Swap (formerly Ad Selector) functionality is Hulu's bold, experimental bet on the future of television advertising. The idea is simple: by giving viewers some say in what ads are displayed, you can show them more relevant messages. For advertisers, the value in more effectively targeting ads toward the people most likely be interested in the company's product. Everybody wins.

In fact, every major metric measured saw a substantial increase. Brand favorability, purchase intent and stated relevancy, all measurements highly sought after by advertisers, improved significantly when ads were selected by viewers rather than played randomly.

Granted, it's not all viewers who are participating in the Ad Swap program. Hulu said they only expect about 3% of users to opt in to the initiative. Still, the study demonstrates the effectiveness of a generally more innovative and user-centric way of displaying advertising in a digital age, something from which media companies old and new can likely draw a few lessons.

As Netflix begins the process of spinning out its streaming business from its traditional DVD rentals, I wanted to examine the alternative streaming services that are currently available. I looked at Amazon Prime, Hulu Plus, Vudu.com and Justin.tv. Added to this mix is what is available on Comcast's Xfinity service to just show what can be found from a typical cable TV company. (Of course, if you don't live in a Comcast service area, you can't subscribe to their streaming service online.) I choose five random movies and five TV series to see what was available on each service.

Granted, your results might differ based on your own personal content selection, but the general trend is that Netflix is still the champ, but only if you count both its the streaming and DVD mailing services. All ten of our selections were available, but only four of them via streaming. Amazon and Comcast had five streaming videos out of the ten available for instant watching, and Vudu and Hulu each had four.

Hulu Plus and Comcast Xfinity both have a better selection for TV series than movies, whereas Vudu is better in finding more movies. Amazon has decent coverage in both media.

If you are searching for something on Justin.tv, you will quickly find out that you can't easily find anything. If you hunt around, you might come up with a movie or TV show that someone has uploaded, but chances are this upload won't be around for very long if it violates the show's copyrights. Still, if you know your way around, you might be able to find popular shows that have been posted.

Netflix has made a name for itself supporting a wide variety of clients and browsers, on everything from Blu-ray TVs to iOS phones and tablets. Of the services examined, Amazon was the only one missing an iOS client.

What does it all cost?

The fees for each service are also hard to compare with Netflix. Vudu charges per show, and there are different prices depending on the popularity and vintage of the movie. Amazon wants you to sign up for its Prime service at $79 per year, but once you do you have unlimited streaming access for the next 12 months. If you don't want Prime, you can pay from $1 to $4 to rent the movie for up to two days, or purchase it for download. There are a host of restrictions on how long you can actually have possession for the movie too, based on our wonderful studios legal departments. Justin.tv offers both free and paid accounts that remove inline ads. And Hulu also has two pricing levels: Plus for $8 a month (the same for Netflix' streaming component) and free. Plus adds full episodes of the TV shows that it offers along with HD quality streaming.

Overall, once you leave Netflix you will find fewer choices and searching won't be as easy to find something to watch. Netflix has a great search engine that won't just look for movie titles but also check for actors and other principals involved in the movie itself, something the other services don't do as well at.

Plus, your collection of recommendations and previously watched content on Netflix can't easily be exported to any other service. Finally, while all of the services provide for streaming to your Windows or Mac Web browser, not all movies are available to stream to your iPad or Tivo box.

So while you might be upset about paying for two bills for your video rentals from Netflix, unless you are willing to spend more time searching for content, you are probably better off sticking with the service for the time being, at least until the others catch up with their content licenses. Or if you already have a cable TV subscription, investigate whether it offers something similar to Comcast's Xfinity and see what their coverage is there. Ironically, that might be your best alternative to Netflix after all.

NB: Thanks to Maia Rowland who provided the research for this article.

Specifically, Comcast and Verizon are talking with Microsoft about the possibility of including cable subscriptions via the Xbox 360, according to a report from Digiday. The tech giant's gaming console, which already streams content from sources like Netflix, Hulu Plus and others, could in effect become a cable box if Microsoft manages to strike a deal ahead of its upcoming release of Xbox TV.

For its part, Apple has famously described its set-top box as "a hobby" but is widely rumored to be working on producing an Internet-connected HDTV set, which may hit the market as early as next year. Smaller companies like Roku and Boxee have found enthusiastic niche audiences for their set-top boxes, but nothing approaching mainstream adoption and not without content-related issues of their own.

With over 53 million units on the market worldwide, the Xbox has a far bigger reach than all four of those Web-only devices combined. By enabling consumers to subscribe to cable from Xboxes, Comcast and Verizon would help make the the device much more attractive to consumers, who may be less likely to cut the cord if the cable experience is made easily available from the same device they use to stream Internet video, play games and so much else.

Comcast has been aggressive in its attempts to thwart the disruptive challenge the Internet poses to its traditional business model. Inclusion on Xbox gaming consoles makes sense as part of the company's "TV Everywhere" model, which is designed to keep its offerings desirable in the eyes of consumers, who are increasingly expecting the ability to watch content at any time, on any device. The cable giant has also invested heavily in everything from hardware to content.

Do you think Comcast and other cable companies will hang onto subscribers by adapting like this or are they pretty much doomed? Share your thoughts in the comments below.

Google joins Yahoo, Amazon and the Dish Network in bidding on the company, but is apparently going above and beyond what those companies are willing to offer. The exact numbers are not known, but Google may well be offering "a couple billion dollars more" than the other bidders, presumably for an acquisition that goes beyond what Hulu was originally offering to sell.

In making an aggressive bid for Hulu, Google appears determined to shore up its holdings in the video content space, where it already owns YouTube, the largest video site on the Internet. Historically, the company has had a somewhat tense relationship with traditional content providers, although it's been extending a few olive branches lately.

An acquisition like Hulu could be just what the search giant needs to revamp its Google TV product, which has been met with a lukewarm reception in the United States so far. In addition to user experience issues, the platform struggled early on as content providers moved to block their content from working on Google TV-powered devices.

That said, if it were to take over Hulu, Google would need to assuage any concerns held by its chief content providers, whose businesses are entrenched in the older, more lucrative distribution model and may be at liberty to pull their content from the site at some point in the future.

Of course, it's still very early in the game and it's possible that Hulu's owners may end up holding onto the site. Whatever ends up happening with Hulu may well foretell the future of Internet TV, if not indicate a few things about the future of the Web in general.

While this is by no means a new development, the trend is continuing unabated as more consumers depend on Web-based, on-demand streaming as their primary means of viewing TV content and broadcast's popularity drops ever-so-slowly.

Tensions between traditional content providers and the Internet companies that seek to alter the way that content is distributed appear to be heightening. Just yesterday, Starz Entertainment announced it wouldn't renew its licensing deal with Netflix, reportedly over the latter's refusal to raise its subscription rates even more than it already has.

It's worth noting that even as users flock to the Internet for their TV needs, broadcast still commands the vast majority of viewers' attention. According to Ericsson's survey, scheduled brodcast TV was the preferred viewing method for 88% of consumers surveryed, a four-point drop from last year.

TV Gets More Social

However they're getting it, people are increasingly supplementing the TV-watching experience with social media. Forty percent of viewers said they use Facebook, Twitter or some other social networking tool to discuss TV shows as they watch.

"This communication adds another dimension to the TV experience, as consumers found an annoying reality show funnier when they were able to comment on social media about 'terrible' singers, 'ugly' clothing or when your favorite team scores a goal," said Anders Erlandsson, Senior Advisor at Ericsson ConsumerLab.

The growth of both social networking and mobile computing (including tablets) have contributed to a rise in the use of social media to augment TV consumption, especially among younger generations, who have grown up connected and are accustomed to using the Internet for social communication around the clock.

The social Web's impact on television can be seen in the rise of "second screen" social TV apps and in the development of Internet-connected TV sets, one of which is rumored to be coming from Apple sometime next year.

Even as the Internet upends traditional media business models, it's possible that the real-time, social Web may help preserve the value of the original broadcast, since those conversations are best had when a given TV show first airs. It's harder to have a Twitter chat with friends about the latest episode of "Glee" when you're watching in on Hulu eight days later.

The network's new system enables Dish Network and Hulu Plus subscribers to watch new episodes online shortly after they air, but requires everybody else to wait. Subscribers can watch brand new episodes on Fox.com by authenticating with their Hulu or Dish Network account credentials.

As Fox backs away from the free, quickly-available Web TV content model, ABC has indicated it's ready to do the same, according to a post on AllThingsD.

"We'll basically push the window back or make access to the programming more difficult or later, except if customers are authenticated as a subscriber." Walt Disney Company CEO Robert Iger said in an earnings call recently, citing a desire to preserve the company's existing relationships with traditional content distributors.

That means that, come Fall, people may need to wait several days before watching the most recent episode of shows like Modern Family, Grey's Anatomy and Desperate Housewives.

These moves come as little surprise as content providers have sought to maximize the profits made from television content, something that hasn't proven simple to do as viewers increasingly shift to the Web to watch shows.

Hulu, which became profitable in 2009, is expected to earn as much as $500 million in revenue this year. Even so, the revenue seen by content providers from Internet streaming services like Hulu doesn't come close to what they've made from their more traditional content distribution relationships.

The challenges experienced by television networks are somewhat akin to those faced by newspapers and magazines in recent years. While it provides a more timely and interactive mode of distributing content, the Web is slower to offer a business model that compares to these businesses' traditional models, which tend to erode more quickly than the new ones can take shape.

The service will be subscription-only and will be available across multiple platforms and devices, as Hulu Plus is in the United States.

Companies specializing in content distribution often have a hard time expanding internationally due to complex regulations and expenses related to licensing and ownership rights of that content. Due to these issues, music streaming services like Pandora and Spotify have been slow to launch in new markets and Hulu competitor Netflix is only available in the United States and Canada. The fact that we've had to wait this long for Hulu to launch outside the U.S. is thus not all together shocking.

"In Japan, we ... see an unfulfilled market need with respect to premium feature film and TV content, and very favorable environmental factors to a service like ours, including extensive broadband penetration, smart phone and other internet-connected device ubiquity, and strong consumer interest," Hulu said in a blog post.

The company has assembled a team based at its new headquarters in Tokyo to get started preparing for the launch, which is expected later this year.

On one hand, it makes a lot of sense. Folding Hulu into its Prime package would give Amazon almost a million more paying premium video subscribers, dramatically increase its content library and add legitimacy to its nascent Instant Video service. Amazon is among one of the few companies that can comfortably afford Hulu and it presents less of a threat than Apple or Google, whose deep pockets and wide reach have been disrupting the networks and studios for years. It seems like perfect match ... or does it?

The question that Amazon has to ask itself is if it is cost prohibitive to buy Hulu straight up with a guarantee of content licenses for several years from the networks or continue to license content from the networks and studios piecemeal, the way it is currently doing. The rumored rate for Hulu is somewhere in the range of $2 billion. Would Hulu boost Prime enough that it could be considered a sound investment over, say, the next five years?

From a consumer perspective, Amazon would be the best of all worlds. It is a company that cares about innovation, spends a lot of money on research and development, has a familiar, integrated payments system and is user friendly. Amazon is a better developer ecosystem than a company like Yahoo (which probably makes the most business sense in a Hulu acquisition) and Hulu would be easily integrated into the existing Amazon framework, from payments to cloud hosting.

There is also the matter of devices. Though CEO Jeff Bezos has not come out and said it yet, Amazon Android tablets and smartphones are on their way, probably sometime this quarter. This is where having Hulu would give Amazon a significant leg up on Apple, Google or any of the OEMS - it would be the only device provider with a popular premium video streaming service integrated straight into the device.

Apple has iTunes but it cannot make that claim and Google is in the same boat with movie rentals from the Android Market. Add Amazon's payment system to the device + content mix and there is significant growth potential there.

A Good Fit In The Ecosystem

Amazon (and to a lesser extent Yahoo and AOL) is a destination for Hulu that the Web ecosystem could be content with. On the other hand, Apple may be the worst place for destination for Hulu. As we have discussed here before, Hulu is a cog in the upcoming battle over net neutrality between the operators and the over-the-top content distributors, such as Netflix.

If Apple is seen as a bully and creating a content monopoly (to augment its mammoth music operation) then there are distinct possibilities that the operators will revolt and start putting hard data caps or selling premium bandwidth to the distributors (Apple could just go and buy an operator if it really wanted). This is especially true considering Apple's iOS reach and the strain it would put on the operators' networks.

In comparison, Amazon would not make the same type of impact. It would not solve the problem of carriers missing out monetizing the content that is carried over their pipes, but, in the operators' minds, at least it is not Apple or Google doing the bullying.

Amazon, or any Hulu buyer, would still have to deal with the content licensing landscape in the long run. That may be how the networks want it, preferring to license content as a source of revenue and develop in-house apps (like XFinity TV or the ABC Player).

For instance, Hulu would have to deal with Fox and its recent "authentication" program and any other such initiatives coming from the studios. Yet, Hulu could also grow in content if it is not strictly owned by the networks. For instance, Amazon reached a licensing agreement with CBS (which is the only major network NOT in on Hulu) last week.

So, it just comes down to whether or not it is fiscally responsible for Amazon to make the move. That is a larger, more complicated question. Yet, from a user prospective, it could not make more sense.

Dish Network (through Dishonline.com) Hulu and Fox.com are the first partners announced and will be able to have new Fox, starting August 15. In the case of Hulu, that means that users will have to subscribe to Hulu Plus to view new Fox shows online. It is the first time that user verification has been applied to content from any of the major networks and is reminiscent of the 28-day window that the film studious (of which Fox is one) have implemented on renting or streaming new film releases in order to boost DVD sales. Will ABC and NBC, the other two networks partnered with Hulu, follow suit? What will the impact be on the video streaming service going forward?

Fox could be harming Hulu if there is a large user revolt where customers start cancelling subscriptions or boycotting the service entirely. The question for Fox is: what is more valuable, the extra eyeballs that see Hulu's premium advertisements or the subscription revenues of Hulu Plus? Essentially, it is the same question that newspapers have been dealing with in terms of pay walls for the last 10 years.

It will be interesting to see if NBC Universal and Disney's ABC follow. If Fox, which has a say on the Hulu board where NBC does not (because of the Comcast's takeover), bullied its way into this arrangement, the other two networks cannot be happy about it. Competitors make strange bedfellows. It is an odd move for Fox to announce while speculation of who might buy Hulu is rampant across the Web as the content wall could have a detrimental affect on the overall value of the service.

In the end, it comes down to the nature of the Hulu consortium. It has three network lions, working in cohort by wary of each other's presence within a cage. Is this a step that Fox can take with NBC and ABC or will it be the trigger that sets them at each other's throats?

When we looked at the possibilities of who could buy Hulu, the focus was on Web and Internet giants such as Yahoo, Google, Apple, Microsoft, Amazon or AOL. What about the network carriers? On an increasing scale, the cable and cellular networks are getting shut out of value on the content carried through their pipes. This could be a problem for the carriers, content providers and, most importantly, consumers in the not-so-distant future. What does a world of "dumb pipe carriers" look like? What is the optimal balance between "over-the-top" content providers like Netflix and the operators that carry the data?

Mike Manzo, chief marketing officer of software optimization firm Openet, believes we have seen a world where the carriers are nothing but dump pipes.

It is called Canada.

Carriers in Canada have instituted hard caps for data use in the country. As such, Netflix, which uses a disproportionate amount of bandwidth in comparison to its user base, moved to offer lesser quality streams of its content so that bandwidth-starved Canadians can have some service as opposed to no service. Manzo argues that if the network operators in the U.S. get shutout of adding value to the content being carried over their pipes then they will begin to lose profitability and be forced to charge exorbitant rates for bytes. Really, that helps nobody.

That is why Manzo advocates that the operators seriously consider buying Hulu. Essentially, there are two business models that the operators have in front of them at this time - get a cut of the value over their pipes or become wholesale connectivity and quality of service purveyors. In an ideal world, the operators would become both, Manzo said.

"It is the Catch-22 in our industry that none of us have the crystal ball to see the pieces that need to be fixed," Manzo said in a recent telephone interview. "If they do not do it [buy Hulu or add value from content], what happens to the carriers?"

Importance of Carrier to Create Profit Out of Content

The operators have already been cut out of an important portion of the content ecosystem by what Manzo calls "over-the-top" content providers. More or less, the operators have been shut out of the mobile app revolution.

"The carriers missed the boat on the app ecosystem," Manzo said. "They still have an opportunity on video content. If they do not get together, they will be circumvented by Apple and Netflix."

Manzo can envision a world where the carriers lose out on any type of revenue from content and hence lose profitability. This is of concern to Openet since the optimization of content services would likely be a task for Openet. The better the carriers do, the better Openet does. So, Manzo has an agenda.

Could Apple or Google Swallow the Carriers Whole?

Yet, he makes some decent points. After the carriers lose profitability, they become weakened business units and ripe for takeover. Both Apple and Google would love to control their own cellular infrastructures.

"It is not that hard to see Apple buying AT&T and Google buying Verizon," Manzo said.

To put that in context a little bit, Apple just reported its quarterly earnings with revenue north of $28.5 billion. The Cupertino behemoth is on its way to being the most valuable company in the world. Here is a tweet from GigaOm's Mathew Ingram that is a good indicator of where Apple stands in relation to the carriers.

Granted, the U.S. carriers are much larger than their Canadian counterparts. Verizon has a market cap of $103.52 billion, and AT&T (ATT) has a market cap of $1.24 billion. According to AT&T's attempted takeover of No. 4 U.S. carrier T-Mobile, the starting price for a network operator is $39 billion.

So, Apple or Google buying a carrier might be a stretch, but not outside the realm of possibilities. Especially if the carriers begin to lose their profit margins.

Crapware, Consumers and Net Neutrality

From a consumer perspective, an operator takeover of Hulu has negative connotations. Carriers are not known to do user interface well. All four of the carriers have some type of application store such as Verizon's V Cast or AT&T's App Center. Every gadget review of new mobile devices over the last couple of months complains that the carriers have infected devices with "crapware" that cannot be erased. In addition, the carriers do have content delivery services, such as AT&T's U-Verse. Consumers have a negative perception of carriers' attempts at software, mostly because they are naked attempts at monetization. Consumers have been burned by the carriers before, they would probably prefer that the operators became dumb pipes.

This is where net neutrality fits into the picture. If the carriers do not get value added from the content delivered along their pipes, do they in turn throttle the services that use a lot of bandwidth? Does it behoove the content distributors to cut the carriers in on the action to keep the status quo, or is a major shake-up of the entire ecosystem necessary? As corporations chase deals, mergers and profits, do the consumers get left to pick up the tab?

These are big questions and, almost by accident, Hulu is in the center of the maelstrom.

Hulu users can create a subset of their Facebook friends as "Hulu friends." If you and I both connect Hulu to Facebook, we will each be able to see updates on what the other is watching, both on Facebook and on Hulu. This will not affect the rest of your Facebook friends' news streams if they are not conncted to Hulu. As we have seen with Facebook's partnership with Clicker and rumored deal with music-streaming service Spotify, the platform wants to make entertainment more social. Yet, privacy questions abound.

Hulu and Facebook tried to ramp up Connect integration at the beginning of July but it went horribly wrong. Users would connect Hulu with their Facebook only to find that the profile that showed up was someone else entirely. Hulu shut down Facebook Connect and required all users to login through Hulu.com.

In a blog post, Hulu claimed all responsibility for the malfunction. Even if the problem was not entirely Hulu's fault, any problem with Facebook Connect exposing personal details or logging in to the wrong accounts would be an extraordinary problem for Facebook and shake the confidence the company has built up with the Web.

There are a few interesting bits to Facebook's Hulu integration. Users can leave time-stamped comments in their feed that will generate a clip of what they were watching at that time. Say you are watching Battlestar Galactica - episode 1, season 2 - and want to leave a comment on the 15-minute mark of the show. Hulu will generate a clip from that moment and post it to your wall. Users' ratings, reviews, discussion forum posts and favorite shows can also be published to Facebook.

Yet, you may not always want to show what you are watching. In that case there are several options: do not connect your television watching habits to a social network, toggle privacy preferences in Hulu or do not comment on anything.

The goal for Facebook is to become the spot where users discuss what they are watching and listening to. Hulu's greatest asset is its long tail of content along with its posting shows 24 hours after they appear on television. What Hulu wants with Facebook is the ability to amplify that long tail and make older shows more valuable to the service.

Is a free month of Hulu Plus enough to make you trust the connection between Hulu and Facebook?