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Web Trends

Google's Eric Schmidt on What the Web Will Look Like in 5 Years

Google CEO Eric Schmidt envisions a radically changed internet five years from now: dominated by Chinese-language and social media content, delivered over super-fast bandwidth in real time. Figuring out how to rank real-time social content is "the great challenge of the age," Schmidt said in an interview in front of thousands of CIOs and IT Directors at last week's Gartner Symposium/ITxpo Orlando 2009.

Mobile Web's Explosive Growth

Mobile ad firm AdMob has revealed the dramatic changes the mobile industry has seen in their latest Mobile Metrics Report. It was only a year ago that the Motorola RAZR scored as the number one phone in America. One year later and half of the top ten are touchscreen devices, six include Wi-Fi capabilities, and six have mobile application stores. And as you would expect, this new crop of super-powered phones are making heavy use of the mobile web.

Why Aren't VCs Backing Augmented Reality?

Some people believe that Augmented Reality (AR), the class of technologies that place images or data on top of other views of the physical world, could be the web browser of the future. AR has rocketed out of the research labs and is catching mass market interest fast - e.g. mobile phones displaying restaurant reviews when you look through your phone's camera. Why then are VCs not investing more in Augmented Reality? Here are three reasons why we think investment in this sector has been slow so far.

Facebook Announces Roadmap for Developers

This week Facebook published a developer roadmap outlining upcoming relevant changes and a rough timeline for each. Changes include developer access to user emails, more prominent app displays on user profiles, all-new homepage dashboards for apps and games, and improvements to Open Graph and Analytics APIs. Read on for details and screenshots of the new faces of Facebook apps.

SEE MORE WEB TRENDS COVERAGE IN OUR TRENDS CATEGORY

ReadWriteEnterprise

Our channel ReadWriteEnterprise, devoted to 'enterprise 2.0' and using social software inside organizations.

Calendaring, Scheduling Meetings: Timebridge CEO Interview Reveals Strategic Importance of This Space

We have looked at Calendaring many times (such as in our round-up of 10 players). In our own work, we have started working with both Tungle and Doodle. To understand more about why this market is strategically interesting, we recently spoke with Yori Nelken, CEO of Timebridge (see our previous coverage here).

ReadWriteStart

Our channel ReadWriteStart, sponsored by Microsoft BizSpark, is dedicated to profiling startups and entrepreneurs.

Paul Graham: Priority Access to Twitter Is Practical Necessity

If hardcore hackers had any doubts whether the real-time web was a legitimate development environment, Y Combinator co-founder Paul Graham is dispelling them. In an interview with Graham, ReadWriteWeb learned that the entrepreneur-turned-investor issued a "Request for Startups" (RFS) asking for ideas from companies utilizing Twitter and Justin.tv's live video API. Groups who are accepted to Y-Combinator and fall under these categories will be given "priority access" to Twitter and Justin.tv.

SEE MORE STARTUPS COVERAGE IN OUR READWRITESTART CHANNEL

Web Products

Google Wave Use Cases: Education

Google Wave is a much hyped new Internet-based communications and collaboration platform. It was announced at the end of May, released as a 'Preview' product shortly after and 100,000 more invites were made available at the end of September. Early users reported mixed feelings. But one month after Google Wave was opened to tens of thousands of people, how are people using it now? What use cases are being discovered? We started this series by looking at the education sector.

What are Hulu's Mysterious Plans?

Everyone is looking to Hulu as the future of Internet TV. A joint venture between several major networks, Hulu delivers free, ad-supported programming via online streams - an untested model for long-term profitability, at least when it comes to television. While consumers have been enjoying the service since its launch in 2007, recent statements by a News Corp exec have people wondering: can Hulu make the ad-supported model work? Or does the company have other plans?

Google Launches Music Search: Partners with MySpace, Lala, Gracenote and Others

This week Google announced the launch of Google Music. This new service is powered by Lala and MySpace's iLike. Other partners include Gracenote, iMeem, Pandora and Rhapsody. Google has also partnered with the major music labels: EMI, Sony Music, Universal Music Group and Warner Music. Through Lala and iLike, Google will also be able to feature music from a large number of independent labels.

Google Search Gets Personal: Social Search Launches in Google Labs

Social Search went live in Google Labs this week. Google announced that it was working on this Social Search feature at the Web 2.0 Summit last week. Social Search taps into a user's social network profiles and displays relevant links and status updates that members of a user's own social network have shared at the bottom of the default search results page. According to Google, Social Search will enhance the search experience on Google by providing users with more personally relevant search results.

Brizzly Adds Facebook - Aims to be The Blogger.com of Social Media

Brizzly wants to be to microblogging what Blogger.com was to blogging five years ago. Currently, Brizzly offers a user-friendly browser-based interface for Twitter and Facebook. The Facebook integration went live this weekand more social media applications will be added as the product evolves. Brizzly shares much of the same philosophy as Blogger. It's simple to use and aims to make microblogging easy to understand and use by a mainstream audience.

Currently Brizzly is in private beta, but ReadWriteWeb has scored 2000 invites for our readers to test it out! (see the post for the code).

SEE MORE WEB PRODUCTS COVERAGE IN OUR PRODUCTS CATEGORY

That's a wrap for another week! Enjoy your weekend everyone.

While consumers have been enjoying the service since its launch in 2007, happily watching free TV shows and movies over their PCs and even their TV sets thanks to Media Center plugins and other unofficial hacks, the company itself is still trying to navigate this new online landscape and effectively monetize their content. Now recent statements by a News Corp exec have people wondering: can Hulu make the ad-supported model work? Or does the company have other plans?

One of the primary objectives behind Hulu was to put free programming on the Internet to combat the rampant pirating of TV content that took place on sites like the popular file-sharing destination, The Pirate Bay. As iTunes did with music, the idea is to make using Hulu's service easier than having to go out and seek the illegal downloads.

Although iTunes charges for music on a per-file basis, Hulu, too has a business model that makes you pay - except in their case, you're paying with your eyeballs, not your credit card. Using video ads, Hulu has been attempting to monetize its service, but those efforts have been difficult at times. This spring, for instance, Screen Digest analyst Arash Amel claimed that Hulu had only sold about 60% of its ad inventory. "What we've seen is rapid growth in consumption, but the advertising isn't keeping up," he said.

While these figures, if accurate, could be reason for concern, many feel that the profitability of an online video venture of this nature takes time to develop. Eventually, the ad-supported model would work for Hulu as it has worked for numerous other websites and services, supporters claim.

Besides, more recent deals seem to bode well for the site. Case in point, this month the Publicis Groupe announced a mulit-million dollar ad deal that involved targeted advertising to particular Hulu demographics. The deal is said to represent a "significant increase" in spending on Hulu.

Hulu to Charge?

Despite the promises ad deals like this hold, there is still debate as to whether or not Hulu is going to stick to the ad-supported model or try something new. At a conference last week, News Corp. deputy chairman Chase Carey made a pronouncement regarding this point that raised more than a few eyebrows:

"I think a free model is a very difficult way to capture the value of our content. I think what we need to do is deliver that content to consumers in a way where they will appreciate the value," Carey was quoted as saying by Broadcasting & Cable. "Hulu...needs to evolve to have a meaningful subscription model as part of its business."

This seems to jibe with earlier reports where News Corp. CEO Rupert Murdoch also hinted at the site's plans to add premium services by saying, "Are we looking at it with a view toward adding subscription services and pay per view? Yes we are."

But "looking at" and "doing" are two very different things - where does Hulu stand now? Has their core philosophy - that is, their belief in the ad-supported model - changed?

According to AdWeek, it has not. In the article, the company claims their ad-supported free service is still the one that "resonates with the largest group of users" and that any additional models would just serve to complement that.

However, when we reached out to Hulu to ask about their plans regarding charging for content, the company wouldn't go on record with any such statement.

Why So Cagey?

Hulu's current decision to clam up could be taken in a few different ways. Perhaps they simply haven't decided what they're going to do about adding new premium services to Hulu and therefore don't want to discuss it at all.

Yet the quote they provided to AdWeek seems innocuous enough - so why not just stick with it? Why now choose to say nothing at all? Maybe they're hoping that with no quote, there is no story, and that will allow them to quell the impending panic among some users who are worried about Hulu's plans to make customers pay. Because some people are so opposed to paying for online content, just hearing reports that Hulu might change to a pay-to-stream model could dissuade them from continuing to use the service.

Then again, it could be that the opposite is true. Hulu wants to keep everyone wondering about what's coming next, generating excitement without providing any details. This means people can speculate wildly and give their opinions, allowing Hulu to tap into that online conversation about what people want before making any official decisions or announcements.

What We Think: Hulu Will Launch Value-Added Services

Despite any official confirmations from the company, we think it's pretty clear that Hulu has intentions to launch value-added services on top of its free, ad-supported model in the coming months. These may include pay-per-view options and some sort of subscription model. However, that subscription model would be there to provide users with value-added services that you couldn't get from the free model alone. Perhaps behind the scenes interviews? Sneak peeks? Actor interviews? Who knows...but the possibilities are endless.

As to why we think that, it comes down to simple math. We've now seen three different statements about these premium services: Carey's recent remarks, Murdoch's quote from earlier this year, and anonymous sources quoted by Dan Rayburn who hinted that Hulu's iPhone app won't launch until "Hulu rolls out a subscription based service."

...And They'll be Tied to the iPhone

The iPhone app, in fact, may be the real secret the company is trying to hide. Imagine if the much-rumored and highly anticipated application was linked to a subscription-based model. That could downright revolutionize the way people watch TV. Providing streaming content over the popular Apple smartphone would easily bring in additional revenue and that new source could quickly outperform the profits made by the ad-supported model.

Yet launching a Hulu iPhone app would be a challenge, as the company is undoubtedly aware. And, of course, Hulu wouldn't want to say anything about it, especially considering how difficult Apple is when it comes to applications that compete with their core services. Apple may not even approve such an application, claiming (rightly so) that it competes with iTunes.

However, Apple may be loosening up on that front, with no small thanks going to the FCC who recently questioned the company's rejection of the Google Voice application - a VoIP dialer that Apple rejected because it competed with what the iPhone does natively. (Apple claims they're "still reviewing" it, but no one really buys that.) Since the FCC's involvement, however, Apple has gone on to approve a streaming music app called Spotify, an application that many had feared would be rejected because it, even more so than Google Voice, competed with iTunes. That leaves us hopeful that a similar application launched by Hulu could also make it through the approval process.

Still, we wouldn't blame Hulu if they wanted to keep that extremely quiet. And that would certainly explain why Hulu won't comment on their plans.

Of course, this is all just speculation at this point, but we hope it turns out to be true.

I discerned three important nuggets from Roberts:

• Comcast will continue to invest in higher-bandwidth connections into homes.
• Comcast will invest in content more aggressively.
• Comcast will officially launch Hulu-competing Fancast.com by the year's end.

The first two points make a ton a sense. The third point is... well, miscalculated.

I am convinced Brian Roberts understands the challenges ahead. This is why Comcast and Time Warner (which also clearly "gets" it) have been aggressively pursuing a "TV Everywhere" model, which promises to give their subscribers exactly what they want: anytime, anywhere access to any TV content. They have to do this to keep their customer bases.

But in a TV Everywhere world, the role of the multi-system operator is diminished. Your cable or satellite TV provider will no longer be your only (legal) means of watching the current episode of HBO's Entourage. In a TV Everywhere world, Entourage will be available on literally thousands of websites and mobile apps, as long as you can authenticate yourself as a paying cable or satellite subscriber with the HBO package.

In this world, the value of Comcast as a content distributor is eroded. Comcast risks becoming a "dumb pipe," providing little more than bandwidth. To avoid that fate, Comcast recognizes that it needs to move upstream and own or control the content itself. This is why it will buy NBC in the next few months.

Moving upstream and investing in content is a smart move for Comcast.

Moving downstream and competing with Hulu via Fancast.com is a bad move. Here's why:

• Hulu already has a huge lead, having aggressively grown its audience for more than a year now.
• Hulu would be the ideal launching pad for TV Everywhere, because of its mega-loyal and passionate audience.
• Comcast is about to own a third of Hulu. Ad revenue from Hulu will ultimately end up back in Comcast's coffers.
• In a TV Everywhere world, thousands of websites will likely present the same TV content as Fancast.com. It will be a terribly crowded space, with a ton of noise. The sites that perform best will be the ones that create the best user experience for viewing TV content.
• Comcast has a poor track record with UI and user experience design. Need I compare more than Comcast DVR's UI to TiVo's UI?
• Strong consumer brands drive website traffic. Comcast has a horrendous consumer brand. Comcast users generally do not like being Comcast users.
• Comcast's interest is in the broadest distribution of TV content, not exclusive distribution. Locking up certain content for Fancast.com alone would be a mistake. Consumers would see it as a violation of their rights, akin to the Net Neutrality debate.

Comcast can survive (and perhaps prosper) through the death of cable-based TV, if it makes smart strategic decisions. That means focusing on where it provides the most value in the TV supply chain: Internet connectivity and content investment. Creating a content website that competes with its distributors is not a smart move.

Comcast should pull the plug on Fancast.com or simply use it as a TV Everywhere authentication testing site.

Guest author: Mike Berkley served as CEO of SplashCast Media from 2006 to 2009, pioneering the concept of social TV in partnership with Hulu. Berkley is currently involved in the TV Everywhere initiative, consults on product strategy for online media companies, and maintains the TV News Stream blog covering all things related to online premium video.

One of the most interesting features of the Facebook app is the fact that show fans can attend online screening events. Individual shows are listed as Facebook events and users add themselves as guests in order to receive show screening reminders and share links and info. Hulu's first premiere event is for the Fall premiere of Heroes on Tuesday September 22. A complete list of the premieres is available in the Watch Now App.

Earlier in the week, ReadWriteWeb covered Rupert Murdoch's hints that Hulu is experimenting with a subscription service. With the new Facebook app, it will be interesting to see if the company can continue to build momentum beyond its free service.

NBC's Zucker also hinted at the company's interest in the matter. "Whether there are other ways to monetize Hulu down the road, it is something that we are open to, something we will explore," he said, but like Murdoch, reiterated "there are no plans at this time."

Subscription Services Already in Testing?

While that may be the official company line, other sites are reporting a slightly different variation on this story. The Business of Video blog, for example, says they've been in contact with sources who have confirmed that Hulu is already beta testing a subscription-based service internally and is working out the technical requirements. If that story is to be believed, the offering won't go live anytime this year as Hulu still needs to figure out the details of the business plan.

Whether or not that rumor is true, it wouldn't be surprising to hear that Hulu is working on such a project, given their obvious interest in adding more revenue-generating features to the site. Zucker himself even updated his ongoing conference comment about "analog dollars" being used to chase "digital dimes." (In 2008, it was "digital pennies.") "Certainly by next year the goal should be at least quarters," he joked.

What We Want to See: Premium Channels on Hulu

Subscription services would be a brilliant way to chase those quarters, indeed. Perhaps it could even convince cable-only paid channels like HBO and Showtime to get on board with the venture. They've already tentatively given iTunes a shot, but still seem reluctant to share current episodes in a timely fashion on that service. The reason for the networks' timidity is because their iTunes revenue simply doesn't compare to their cable TV subscription offerings or even their DVD sales. (Ironically, that's probably due to the fact that they don't offer current programs via iTunes!). Instead, they would rather entice consumers to subscribe by tempting them with their backcatalog of programming.

However, if the situation was to change and consumers could subscribe to these channels online for a comparable fee to what the companies generate through cable TV distribution, would they continue to put up such resistance? After all, money is money, who cares where it comes from?

These days, more and more consumers are pinching pennies by cancelling cable subscriptions thanks to the numerous alternatives available online. Obviously, premium channels are getting the boot, too. Imagine if they could have a chance to win back some of those penny-pinching former subscribers by way of an online subscription service. After all, what would you give for piecemeal plans that let you buy a 3-month pass to HBO instead of the all-or-nothing combo packages available via your cable TV provider?

Of course, all this is just wishful thinking on our part, but if Hulu does it right, the possibilities for their new TV distribution network are virtually endless.

With today's Brightcove partnership, Boxee can point major networks towards a solution that allows them to increase control over their web video content and advertising. Brightcove offers customers the option to automatically serve video ads or they can choose to utilize a turnkey solution for customized ad placement. Meanwhile Boxee offers content owners a chance to move web video to television audiences. If Brightcove clients like Fox, Showtime Networks and A&E Entertainment welcome Boxee integration, other providers can't help but take notice. This is important given Boxee's battle for Hulu integration.

While Boxee users have always loved the Hulu app, Hulu's content partners requested removal from the Boxee community in early February. Boxee was forced to respond with a workaround solution. The new deal further legitimizes Boxee as a distributor of mainstream content. For a complete list of Brightcove customers and potential Boxee content providers, visit the Brightcove customers page.

In total, the average viewer watched about 135 video clips. While full-length shows are becoming more popular, it is still important to note that the average video is only 3.7 minutes long. Hulu, which focuses on full-length TV shows, also recorded its best month yet, with 457 million views.

Another Record-Breaking Month

June, according to comScore, already broke most records, but at that time, the company credited the surge to the large number of high-profile events (including the death of Michael Jackson and the elections in Iran). ComScore argues that TV viewers are turning to the Internet right now because most of the shows on TV are currently on summer hiatus. While this probably plays some role in this current growth in interest in online video, we would also argue that a lot of viewers are simply changing their viewing habits and have moved away from watching shows on traditional TV and cable networks. Instead, they are watching popular clips on YouTube and full-length shows on Hulu.

Authentication

Now, Comcast and Time Warner are about to start a trial with about 5,000 cable customers that would give these households access to TV programs on the web. Of course, the real test here is not whether the cable companies can deliver online TV over their networks, but whether they can figure out a good way to 'authenticate' households that have a cable subscription.

Spin: More Choice for Customers

As Om Malik points out, this also opens up the door for possible anti-trust proceedings against the large media companies that are involved here. For now, it looks like Comcast and Time Warner will be working together on this project (Time Warner uses the name TV Everywhere, Comcast calls its system "OnDemand Online"). In this limited first test, Comcast will carry some programming from Time Warner's TNT and TBS networks.

As expected, the cable companies are spinning this as an innovative agreement that will bring "customers exponentially more free content, more choice and more HD programming online as well as on TV." In reality, of course, this project is simply a way for the cable companies and networks to protect their revenue streams.

There is, however, also some truth to the cable companies' claims. A lot of cable networks do not put any of their content on the Internet, as the networks don't want to jeopardize the lucrative income stream they currently receive from the cable companies.

Hulu, the Elephant in the Room also Wants to Play

As of now, free TV programming online isn't going to go away anytime soon, but as PaidContent reports, Hulu, the most visible online TV site, is also looking into subscription models and the executives there might not be averse to joining the cable companies' authentication schemes. At some point in the future then, your cable subscription might determine which shows you can watch on Hulu and similar online TV sites.

Hulu Desktop

The crown jewel of these new apps, though, is clearly the Hulu Desktop application, which works exceptionally well and is extremely well designed. A lot of similar applications have relied on Adobe AIR and were often nothing more than just the web app packed into a stand-alone browser. But Hulu actually developed native apps for both Windows and Mac, and the result is noticeably better than what the Hulu team could have achieved by using AIR.

For the most part, users can navigate the app with just the arrow keys and the space or enter button (or a Windows Media Center or Apple remote). Hulu's video quality has always been quite good, and the desktop app basically replicates the same basic experience as watching a video from the site in full-screen mode, but with a number of additional functions such as being able to quickly bring up more information about a video that is currently playing.

Overall, using the Hulu Desktop makes for a very nice experience, even though we sometimes felt that it took too many clicks to find and start a video.

Hulu and Boxee

Of course, it is hard to talk about Hulu and desktop apps without mentioning the company's conflict with Boxee, another popular desktop app that allows users to stream videos from a large number of sites. Hulu blocked Boxee's access to its videos in February, though by now, Boxee has found a work-around to still display the site's content in its application.

Cutting the Cable

Given that more and more households are now cutting their cable connections in favor of connecting their computers directly to their TVs and playing videos from Netflix, Hulu, YouTube, and other sources, the release of this application is timely. Though, in the end, we would assume that most users who decide to go without cable would prefer apps like Boxee or MythTV because they would give them access to all their media files instead of having to switch between different apps.

To gather its data, Nielsen monitors about 200,000 panel members, a technique that is clearly informed by Nielsen's method for gathering data about TV viewers. Other metrics companies use data from toolbars, ISPs, and other sources, though Quantcast also gives site owners the option to embed a code snippet on their pages that reports data directly to Quantcast (Hulu does so, for example, and so does RWW).

Stats Need Standards

The real problem here, of course, isn't even about knowing exactly how many people watched videos on Hulu last month (even though we have to admit that this discussion is quite interesting in its own right). Instead, this kerfuffle once again shows how hard it is to correctly estimate usage numbers on the web, especially in the absence of any real standards. As every blogger can easily attest, three different stats programs will give you three different numbers.

We have to take publicly available stats, no matter from which provider, with a grain of salt. In our experience, it is always worth looking at a number of different sources, and while the trends that these services show tend to be relatively trustworthy, the exact numbers are always open for debate.

Interestingly, Disney-owned ABC.com, which just struck a deal to syndicate its videos on Hulu, saw the largest decline in streams since March, with a 15.9% drop in total streams.

Given that few of us here at RWW fall into MTV's demographic, we are just as puzzled as Peter Kafka at AllThingsD about the rapid growth of MTV's streaming video business. MTV grew faster than any other of its competitors among the Top 10 online video streaming sites. While MTV just launched its streaming video service in Japan, Nielsen's data is for the U.S. only. Looking at MTV's site though, there can be no doubt that MTV has made streaming video the center of its online strategy - and apparently this strategy is paying off.

Older Users Drive Hulu's Growth

On Hulu, according to Nielsen, the time users spent on the service increased by 119% since last November, mostly driven by the impressive growth that Hulu saw among users between 35 and 49. These users now make up 30% of Hulu's viewership and they spend far more time on Hulu than most other demographics (416 minutes per month - 10% more than any other group).

Hulu = Online TV?

Hulu was already on the brink of becoming the de facto standard for watching TV shows online, and adding Disney to its line-up only consolidates this position. Advertisers have been flocking to Hulu, and while it is getting some serious competition from TV.com, which is owned by CBS (which doesn't have a deal with Hulu), this new deal should give it a nice boost in the next few months.

It should be noted that ABC's own online player features 720p HD versions of all its major prime-time shows, something that Hulu currently doesn't offer, so to get the best quality, users will still have to go to ABC.com.

CC-licensed image used courtesy of Flickr user Raymond Brown.