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.

"Microsoft, meanwhile, said that during the Olympics, 40 million US to visitors NBCOlympics.com didn't yet have Silverlight installed."

NBC has already begun switching back to Adobe Flash for the start of the NFL season. Yet their efforts don't seem to be paying off at the moment with reports of video playback for the NFL season starter game being too horrible to watch.

Not a Good Look

We all know that at least 90% of computer users have Adobe Flash installed. It's easy to see why NBC would want to switch back. The partnership between Microsoft and NBC was likely more beneficial to Microsoft in the end. One of the downsides for NBC was that users tend to become either wary or lazy about downloading new extensions for a website. This is especially true if the website was working just fine with previous extensions only days before. However, with a rocky start to switching back, NBC online sports fans are probably wondering if it's even worth the effort anymore.

One of the most obvious ways the Web will be utilized with the Beijing Olympics is with online video coverage. In the US, NBC has teamed up with Microsoft Silverlight for 2,200 hours of live coverage. Meanwhile in China, Adobe has teamed up with a Chinese network.

Despite the geographical limitations, NBC is promising lots of 'new media' features in its Web coverage. These include:

• Users have the ability to watch whatever sport they want, unlike on TV where you get what the broadcaster dishes up.
• There will be 3,000 hours of "on-demand encores of full events and highlights".
• Users can switch between up to 4 live streams.
• Users will see the standard world feed that is sent to all broadcasters, so there will be no network TV commentators. Instead, the NBC expects to see bloggers "serve as play-by-play voices and analysts" (free talent!).
• Users will have access to statistics, biographies and other information.

As the NYT notes, NBC's coverage of the Olympics online is the culmination of NBC's "multiple-network strategy, which began in 2000 with the addition of CNBC and MSNBC to the mix." The upshot is that coverage of the Olympics becomes an on-demand, 24/7 experience -- although unfortunately not worldwide in NBC's case. This is possible because the "cyber-pipelines" infrastructure is largely in place now, in the US, to support such extensive online video coverage.

NBC's coverage online will be powered by Microsoft Silverlight and Windows Media player. CNET reports that Limelight Networks is being used to route the video streams to Internet service providers. NBC was originally planning to use Adobe's Flash, but CNET noted that NBC "was convinced by Microsoft earlier this year that Silverlight would allow it to stream more high-quality video than would have been possible using Flash."

It seems China's TV networks didn't buy that line, as Adobe has partnered with CCTV.com to bring Olympics online video to mainland China.

CCTV.com and Adobe Partner for Internet Coverage in China

Today, Adobe announced a partnership with CCTV International Networks Co, Ltd. to deliver Web coverage of the 2008 Beijing Olympic Games to fans throughout mainland China and Macau. CCTV.com owns the online video rights to the 2008 Beijing Olympic Games for mainland China and Macau. CCTVOlympics.com plans to provide 5,000 hours of "on-demand protected streamed video content including full event replays, highlights, features, interviews and encore packages." This is made up of 3,800 hours of worldwide broadcast Olympic Games video and 1,200 hours of CCTV's own video.

Choosing Adobe as a partner, as with NBC and Silverlight, is a hint that Chinese Internet viewers can expect a rich interactive experience. The press release trumpets "an unprecedented Web experience created with Adobe Flex and delivered via Adobe Flash technology".

Unlike NBC though, CCTV is not eschewing commentators and replacing them with bloggers. CCTV promises "expert analysis from CCTV's Olympic media team". However it also will be diving into the social web via "social networking features that will enable fans to share aspects of their Olympic experience with friends."

Conclusion

The 2008 Olympics is set to be the first to have a mammoth online video presence. Up to 5,000 hours of coverage would be enough to satisfy even the most rabid of Olympics fan. What's possibly even more interesting to watch will be the performance of interactive Web technologies such as Silverlight and Flash in this coverage. Which one will end up better? Although I guess if you're in the US, you'll never know about Flash - and vice versa for the Chinese regarding Silverlight.

Further coverage from the RWW Network:

RWW: The Olympics Go Mobile

last100: Roundup: The most digital of all Olympic games is well underway

last100: NBC Olympics on the Go will allow (some) fans to download events to watch on their computers

Last month we reported that web-to-TV drama "Quarterlife" had a less than stellar network TV debut. After the first episode drew disappointing Nielsen numbers, NBC canceled the show and moved the remaining episodes to cable channel Bravo.

So why doesn't a lage online following mean success offline? I can think of two reason. First, many media consumers on the Internet are just that, media consumers on the Internet. Yeah, they want more episodes of their favorite shows, but they want to keep consuming that content their way: via the web on sites like YouTube or BitTorrent. Which until online video monetization is figured out, may not really be feasible (a single episode of a scripted drama like "Jericho" can cost in the millions of dollars to produce).

Second, and perhaps more significantly, social networking tools have provided a means for people to organize more quickly and effectively around a shared passion than we've seen in the past. We noted last month that Facebook has been used to organize large political rallies and successful online fund drives, and we saw the same phenomenon in this year's US presidential elections. Specifically, Ron Paul supporters were able to use the web to effectively organize around their candidate and dominate coverage on online social media sites like Digg and YouTube, as well as raise a ton of money. But just like with the TV shows, that online movement didn't translate to offline support.

Simply, online tools have provided a way for a small group of impassioned people to make a lot of noise.

What do you think? Are there any other reasons why strong online numbers haven't translated well to the TV? Do you think Internet fandom will ever be ready for primetime? Share your thoughts in the comments.

3.9 million viewers far outstrips the number of viewers the show attracted on MySpace. The top rated episode of Quarterlife on MySpace (episode 24) had 557,000 views over 3 months. That's an impressive number for a web-based series, but still a far cry from 3.9 million viewers. In fact, the total 4.3 million plays for the entire series on MySpace is only just above the number of viewers that the show pulled on TV (and that's plays, not unique viewers). The latest episode of the show, uploaded February 8, has just about 45,000 views.

Clearly, NBC was hoping that buzz on the web would translate to buzz on the tube, and along with traditional promotion and critical reviews (which were positive for Quarterlife), the show would do well. But it could be that they over estimated the power of the web buzz. Consider that Quarterlife's official MySpace page has 14,000 friends, while this clearly unofficial fan-made profile for Grey's Anatomy, a true TV hit, has over 20,000 friends. While Quarterlife's debut was a bomb by TV standards, it might not have been so bad by web-to-TV standards.

As Media Life Magazine points out, though, this was an experiment that likely didn't cost much for NBC. So look for more web-to-TV programming in the future.

What web-based shows do you think could make it on the traditional airwaves? Diggnation? Rocketboom? The ScobleShow? Let us know in the comments below.

"Some episodes of 'Quarterlife,' a drama about a group of good-looking people in their 20s, have yet to attract 100,000 video views, according to combined view counts from MySpace’s video site and YouTube," writes Brian Stelter. "The low traffic numbers are significant because the series has been touted as the first television-quality production for the Web, as well as the first to be introduced online as a warm-up for its network debut." We reported in November that NBC was in talks with Herskovitz about "Quarterlife," and the network will begin broadcasting the show as a one-hour drama starting in February.

Earlier this year, Mediaweek reported on the success of Michael Eisner's high-profile scripted web show, "Prom Queen." Halfway into its 80-day run, the show had racked up 5.2 million views -- 3.7 million on MySpace, which was promoting the show. But its 90-second length doesn't leave much time for advertising on a traditionally ad-support medium.

Even Herskovitz wasn't impressed by Prom Queen: "'Prom Queen,' at its top, was doing 300,000 views per episode," he told the New York Times. "Three hundred thousand views on television would be quick death, but that’s just the way the world is right now for scripted content on the Internet. We’re trying to change that." But can he?

Everything needn't look so gloomy for scripted shows on the web. Clips of scripted bits from television are some of the most popular videos on the Internet. Before NBC moved it's famous "Dick in a Box" to Hulu, it racked up millions of views on YouTube and TVGuide even called it the funniest video online. Amateur parodies and live performances of it on YouTube are still getting more views than shows like "Quarterlife."

That indicates that scripted material can perform well on the web (further, look at the success of early scripted web shows like Ninjai or Homestarr Runner). However, just like not every show will do well on the TV (how many did NBC cancel last year?), not every scripted web show will be a hit. But due to shorter formats, quicker response times, and smaller production budgets, not every failed show need be a studio-sinking disaster, either. That means studios can feel more free to experiment with more radical formats and ideas on the web and see what sticks. I think the future is bright for original, professionally-produced web video content.

While the market for Internet TV is growing steadily — survey after survey shows that people are consuming more video online than ever before — as 2007 draws to an end, Google-owned YouTube is still the number one video destination site.

This isn’t just true in terms of traffic but also in terms of “mind share”; when people talk about online video they often refer only to YouTube. As a result, a number of hardware companies have added YouTube support to their devices in 2007, such as YouTube-compatible cameras and mobile phones capable of viewing and publishing video to YouTube.

And then there’s the strong relationship between Google and Apple, which this year has led to YouTube support being added to both the AppleTV and iPhone, with a change in the video format to boot. Apple successfully persuaded YouTube to start re-encoding its video catalog to the much higher quality (and Apple-preferred) H.264 codec.

Not one to rest on its laurels, YouTube introduced a number of new features of their own, including a redesiged player, the introduction of interactive overlay ads, better copyright filtering, and — like many Google properties — improvements to its mobile offering.

What can we expect in 2008?

Coinciding with improvements to the quality of Flash video, YouTube co-founder Steve Chen has said that the company is currently testing a version of its player that detects the speed of the viewer’s Internet connection and serves up higher-quality video if the user wants it. According to Chen, we can expect to see higher-quality playback on YouTube as early as February 08.

Also in part related to an upgrade to Flash Lite (Adobe’s version of Flash for mobile devices) that adds full support for Flash video, along with the launch of Google’s mobile phone-oriented OS called Android, 2008 will likely see YouTube being offered on an ever greater number of mobile devices.

On the content front, with Google stepping up its monetization options for YouTube, including expanding its ad-revenue share scheme with independent producers, 2008 may well see more professionally-produced video being offered on the site.

Television networks and movie studios reluctantly experiment

In 2007 we’ve seen a large amount of online experimentation from the television networks (both in the U.S. and UK) and, to a lesser extent, from the major movie studios too. The problem, however, is that many seem to have been doing so with their hands tied behind their back.

In September, we took an extensive look at what the U.S. television networks, ABC, CBS, NBC, Fox, and The CW, were offering on their own websites. Dan Langendorf wrote at the time:

The good news: Major U.S. television networks continue to embrace Internet technology and are putting their shows on the Web for online viewing, just like they did last year.

The bad news: Their online offerings remain sporadic; their Internet strategies feel like “we have to” rather than “we want to”; and — worst of all — they still haven’t embraced the idea that we are living in a new digital world, with different rules, participants, and expectations all around.

This year also saw a number of new efforts by the U.S. television networks to offer their content elsewhere on the Web (not just through their own sites), embracing both ad-supported models and paid-for rental and to-own.

On the ad-supported front, the big news was the launch of the much awaited video destination site Hulu, a joint venture between News Corp. and NBC that offers streaming video of both companies’ television and film content along with offerings from other studios such as Sony Pictures Television and MGM. While many industry pundits were skeptical of Hulu’s chances, upon viewing a Beta version of the site, early reactions have been positive.

NBC, who in some ways seem the most willing to experiment, also launched a Beta version of NBC Direct, an Internet-based catchup TV service. We came away unimpressed by NBC’s thinking, however, noting that shows are only available up to seven days after broadcast, and once downloaded, expire after 48 hours.

With regards to paid-for downloads of television shows, 2007 was also the year in which NBC and Apple’s iTunes divorced. Following a very public spat, NBC chose not to renew its partnership with Apple and is instead selling downloads through Amazon’s UnBox, Sandisk’s Fanfare, and Netflix, among others.

In July we took a look at the Internet TV offerings of the five major UK television broadcasters, noting that the then yet-to-launch iPlayer from the BBC looked the most promising.

However, when the iPlayer finally launched it wasn’t without controversy. The BBC was accused of being corrupt due to the iPlayer’s reliance on Microsoft technology and its lack of Mac/Linux support, and UK ISPs were reportedly critical of the application’s use of peer-to-peer technology and potentially high bandwidth costs. Answering the former, in October the BBC announced it had partnered with Adobe to develop a streaming version of iPlayer based on Flash that will be compatible with Windows, Mac and Linux PCs, and possibly mobile devices in the future.

In the movie download space we compared eleven download stores, concluding that “it’s still very early days in the paid-for video download space, where so far, greater competition hasn’t produced nearly enough innovation in terms of pricing and convenience — particularly in relation to copy-protection.”

What can we expect in 2008?

There’s evidence to suggest that watching full length TV shows online is becoming increasingly popular, in part due to higher broadband penetration rates but also because the studios are making more of their content available on the Web. Encouraged by this, we hope to see the television networks and movie studios take greater risks, although don’t expect the constraints of traditional scheduling and release dates or geographical territories to go away anytime soon.

One likely possibility is that iTunes will start to offer online movie rentals, putting Apple in direct competition with Netflix.

In the UK, broadcasters, BBC, ITV and Channel 4 have announced an initiative to develop a combined service for accessing their on-demand and catch-up services. The new service is currently known under the working title “Kangaroo”, and if approved by the BBC’s governing body, could emerge in 2008.

Internet TV comes to the desktop

The year 2007 is definitely the year of the desktop Internet TV application, with a number of companies launching products that aim to combine a TV-like viewing experience with the best of the Web.

Joost, founded by the team behind Skype, is the most high profile, along with Italian billionaire Silvio Scaglia’s Babelgum. Add to list VeohTV, Zattoo, Livestation, Next.TV (backed by HP), Adobe’s Media Player, and Microsoft’s Internet TV, and it becomes clear how crowded this space has got in 2007.

What can we expect in 2008?

The jury is out on whether people are really willing to leave their web browser and use a number of separate desktop applications in order to get their Internet TV fix. A big question mark also remains around whether the various desktop offerings will be able to secure enough compelling content in order to compete with the Web as a whole.

PC-to-TV and set-top box ambitions

Admittedly we at last100 are more obsessed with PC-to-TV and Internet connected set-top boxes than most industry watchers and consumers alike — 2007 has been a fairly busy year for these type of devices.

The biggest launch was that of the AppleTV, which at the time Steve Jobs hailed as the final piece to Apple’s digital lifestyle strategy, since the device bridges the gap between the PC and the television. However, the AppleTV has been far from a smash hit, with worldwide sales reportedly as low as 400,000 units, a dwindling amount of video content following the NBC Universal loss, and Jobs himself repositioning the device as the company’s “hobby”.

In comparison to the AppleTV, which feels far too tied to the iTunes store, in 2007 TiVo added numerous third-party web services to its line of broadband-enabled DVRs.

This year saw the launch of the Vudu set-top movie box and accompanying download store.

Microsoft and its partners’ unveiled the latest Windows Media Extender devices, with new functionality including higher-speed wireless and DivX support.

Sandisk also entered the PC-to-TV space, with the launch of TakeTV and download service Fanfare.

But perhaps the two companies who best positioned themselves in 2007 to eventually solve the PC to TV problem, along with getting Internet content into the living room, are Microsoft with the XBox360 and Sony with its PlayStation 3.

What can we expect in 2008?

While the market for PC-to-TV devices will remain modest, getting Internet content directly into the living room will remain the pursuit of many companies, particularly Apple, Microsoft and Sony. For example, we’re pretty confident Apple will take a second stab at the AppleTV, and Microsoft and Sony will ramp up their efforts to offer more video and other content through their respective game consoles. Also expect TiVo to continue to add more web services to it DVRs.

Other companies to watch in 2008, in relation to set-top box activity, are Netflix, DivX and possibly Joost.

DivX support is everywhere

Another trend in 2007 was an increasing number of devices supporting DivX video, most notably Microsoft’s Extenders for Media Center and XBox 360, as well as forthcoming DivX support on the Sony PlayStation 3. Additionally, DivX has developed a reference design for its own DivX enabled set-top box, and Sandisk added DivX support to its Sansa line of portable media players.

What can we expect in 2008?

More of the same.