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.

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.

The internet leaves no business model untouched and unchanged, especially when it comes to media consumption. Whether music, movies, journalism, publishing, or TV, the impact of having high-speed, always-on connectivity has revolutionized how we interact and entertain ourselves. But in the wake of these changes, media companies are left struggling to monetize their efforts, all of sudden discovering that their old business model now looks like a square peg getting hammered into a very round hole.

TV viewing habits are just one example of this change. Not only are companies like Comcast and Time Warner experimenting with on-demand online viewing initiatives, the networks themselves now post their top shows to the web. The major TV networks have featured streaming video on their websites for years. Meanwhile, several networks and studios, including NBC Universal, FOX, and ABC, have banded together to offer Hulu, a popular destination for commercial-supported streaming video.

But putting shows online has its drawbacks, as networks are finding out. Without solid measurement tools, making the shows available on other platforms is, in the short term, hurting the bottom line. In a recent issue of TV Guide magazine, for example, it was noted that networks are specifically facing problems with re-runs. Where before a second airing of an episode from a popular show could make decent money, they're now finding less viewers tuning in thanks to on-demand offerings and online viewings. According to one unnamed network exec, this presents a huge challenge for the networks. "We're not like cable, which has a second revenue stream from subscribers," the exec said. "We need to amortize these very expensive shows."

Measuring the Web TV Audience: A Tricky Prospect

Through anecdotal evidence, we know that more people are watching TV online these days. It comes up in conversation among friends, especially when someone laments how they "forgot to record" a program. They now know they can go online and get caught up. Others find themselves relaxing in front of their laptop's screen nearly as often as they hang out in their living room to watch the big screen. In fact, thanks to the recession, more people than ever have decided to cancel their cable TV subscriptions to save money, realizing that many of their favorite programs are available through alternative methods, including online streams. Need proof? Just look at the Google Insights chart for the term "cancel cable."

Then there are the recent statistics from the nonprofit Conference Board that show how online viewing is on the rise. According to their findings, nearly a quarter of U.S. households now watch TV online, up 20% from last year. New shows are most popular, watched by 43% of viewers followed by 35% of viewers who watch sitcoms, dramas, and comedies. And 90% of the viewings take place at home.

Unfortunately, there hasn't been a good way to effectively monitor and measure the online TV viewing audience. When Nielsen previously reported on Hulu's viewing numbers for instance, Hulu lashed out at the company claiming the numbers were wildly inaccurate.

At the time, Nielsen was using a combination of web beacons to determine when streams started and stopped while also measuring the web use of a panel of 200,000 online users. Hulu themselves, however, preferred to quote numbers from measurement firm comScore, especially since that company reported a much higher reach even as Nielsen noticed a slight decline. The problem here, as we noted at the time, is that online measurements aren't standardized, making it difficult to accurately determine audience counts.

A brand, whether Hulu or any other online video provider, could look at the measurements from major firms like comScore, Compete, or Quantcast, and then pick the company whose estimates were the highest when crafting their "look at us grow!" type press releases. In all honesty, it's probably better that Nielsen gets involved to more objectively report the online traffic through their representative sample methodology. It may not be entirely accurate either, but at least you know that it's coming from an unbiased third party.

The "Internet Meter" Will Deliver Hard Data

At the moment, the Internet Meter software resides in a test group of 375 People Meter households, which has allowed the company to evaluate its capabilities before rolling it out to the remaining group. In addition, the software has been deployed to the company's online panel (as mentioned above) which now measures over 230,000 individuals. Installation of the software will be completed in 2010 but full implementation won't be seen until the following year. If that seems like too slow of a pace, it's only because the company is being very careful, fully knowledgeable of the major impact this technology will have on the TV industry. According to Sara Erichson, President, Media Client Services in North America, Nielsen will not take "any actions that would dilute the reliability of the core television ratings data."

Once the Nielsen data goes live, it will reveal a plethora of information regarding not just viewing numbers but also the demographics of who watches what and when. The information can then be used by advertisers and marketers who want to target niche audiences like the hip crowd who watches sci-fi shows but never stays home on Fridays to view them live on TV when they air. Or the group of people who are too embarrassed to set their DVRs to record "Ugly Betty," but sneak in the guilty pleasure online in their free time. Expect the online ads interspersed with the online content to soon become more precise and more targeted than they are now, thanks to these sorts of reveals. Perhaps the networks will even be able to charge more for ads, once they have numbers to back them up. That would be a good thing for the industry as a whole as well as consumers, since it could lead to more shows being put online. Who knows, maybe one day we'll even be able to purchase online-only cable TV subscriptions, too.

At the very least, the service represents a good first step in bringing the web to the TV without losing that essential "TV experience" which has more to do with passively holding a remote than it does with actively typing onto a keyboard. That psychological barrier between participation levels involved in surfing the net and watching TV is probably what led early internet-enabled TV experiences to fail...like "Web TV" for example. People just don't want keyboards in the living room. Verizon seems to understand our need for more passive interaction and has made nearly everything about their web-enabled TV service easy to perform with the Verizon FiOS remote control.

Hands-On: Facebook on the TV

First things first. Before you can have any fun with the Widget Bazaar, you have to configure a parental control password. This may seem a bit odd, but it's understandable given some of the Twitter hashtags we've seen become trending topics lately. To set up the parental control passcode, you have to delve into settings. It's not really that difficult and the process was complete in a matter of moments.

Now you can enter your new passcode to access the Facebook widget, but before you begin you still have to scroll through pages and pages of an end-user agreement and select "I agree" at the end.

Once you're past these initial setup configurations, you can proceed with logging into your Facebook account. The Facebook widget only appears on one half of your screen, so you can play around with it while still continuing to watch whatever program you have on.

On the next screen, you're presented with boxes to enter in your Facebook email address and password. There's a handy option to "Remember Me" so you don't have to re-enter your email each time. You're also prompted to set up an optional numeric passcode which you can use in the future in lieu of entering in your password. I recommend doing so - pushing numbers on your remote is a lot easier and faster than using that on-screen keyboard.

Once logged in, your new Facebook sidebar appears with your current program still playing to the right. There's an option at the top to "switch user" which will probably introduce a whole new way to fight over the remote control (it's my turn on Facebook!). The first option - the one to view your "Profile" - is actually quite boring. It just displays your current profile photo and status, two things you probably don't need to see. Unfortunately, there's no way to use the on-screen keyboard to post a custom status update from within this area.

Both the "Friends - Status Updates" and the "All Friends" section looked exactly the same to me. I thought the "All Friends" section would be more like the News Feed (so-and-so posted a photo, so-and-so requested help in Mafia Wars), but that didn't appear to be the case. It's possible that all my friends were just surprisingly inactive on Facebook at the time I launched this section, but I'm not so sure. In any event, both sections looked exactly the same: a list of friends and their status messages.

The "Albums" section was particularly fun and probably the most useful of all the options. Here, you can launch a list of your Facebook photo albums and then scroll through the pictures they contained in a slideshow-like format. Another tap on the "OK" button would launch the pictures full-screen.

Finally, the best part: updating your Facebook status. An option at the bottom allows you to update your status with a pre-configured message that says what show your watching. Although I still wish that I could customize my message, this simple, one-button post option is a great feature to have.

Hands-On: Twitter on the TV

Before you can start using the Twitter widget, you have to agree yet again to another Terms of Service. Besides the typical lawyerly stuff you'd expect to see, there was an interesting section that pointed you to www22.verizon.com/terms to read more about the Digital Millennium Copyright Act for info on how to contact Verizon with claims. There was also a section that informed you how to report child pornography posted to Twitter. (I wasn't even aware that Twitter had that problem, but I guess Verizon's lawyers were just covering all their bases).

Unlike with Facebook, you don't configure your own Twitter account within this widget. That means you can't see your replies, direct messages or your friends' timeline. In other words, this widget isn't a Twitter client. That's disappointing because I'd like to be able to tweet from my TV...at the very least I think you should have the same option as in Facebook to tweet what you're watching. Sadly, that's not the case.

Instead, the Verizon Twitter widget provides more of a read-only experience. You can check out a list of the latest trends and see the related tweets, perform keyword-based searches, or even configure "favorite topics" for custom saved searches of your own. (Hint: set up a favorite search for your Twitter username to keep track of replies).

The interface to all these options looks the same: tweets on the right, TV show playing on the left - just like with the Facebook widget. The tweets don't update automatically, but you can press "OK" on your remote to refresh them. You can also scroll up and down through the list to see more.

The absolute coolest option within the Twitter widget is its ability to display tweets about the current show. In my case, I was watching "Pan's Labyrinth" on HBO (which is, by the way, an odd but interesting tale). Surprisingly, there were a few others tweeting about this movie, too. Of course, had I been watching something more common - like American Idol for instance - there surely would have been tons more tweets to see. The only problem with the way these tweets are displayed is the lack of a timestamp. I really don't know if these folks were watching Pan's Labyrinth with me right now or if they were watching it sometime in the past.

Conclusion

Overall, I'm thrilled to have this sort of functionality on my TV, but I'd like to see a few improvements. I'd like the option to make the Twitter widget more of a client so I can tweet an opinion about what I'm watching or at least that I'm watching something. Although the on-screen keyboard is cumbersome and slow, what better way to kill time in between commercials? I'd also like to type in custom Facebook status messages in the same way.

The only other major complaint was speed. There was a bit of a delay when scrolling through photos in my album, for example, and hitting the scroll button again and again only led to the selection moving way too far ahead of where I wanted to go. I should have known better than to keep mashing it, but with TVs, you expect instant reactions. Channel Up changes the channel immediately, for example, without any delay.

Also, when viewing tweets, scrolling up and down through the list did a weird refresh of the entire screen which was distracting. I didn't see the same type of refresh when scrolling through Facebook updates, so it seems like something is really off there. Perhaps the widget also doing a search to look for more current updates...I'm not sure. In any event, it needs to be fixed.

But at the end of the day, despite these issues, having Facebook and Twitter on my TV is truly incredible.

Oh, I should also mention that the Widget Bazaar introduces two other widgets: Sudoku and ESPN Fantasy Sports. More widgets will launch in the future. I've only included a selection of images in this post, for all the photos from my TV, you can visit the online album here.

From mobile computing to multi-touch, user interfaces continue to evolve, becoming part of our daily lives. As a Web host, it's with great interest that we're also following the "10-foot user experience," an idea that emerged a few years ago and has been much talked about since. But technology now seems to be catching up to this exciting concept, thanks to innovators like Frog Design and the MIT Media Lab's Fluid Interfaces group.

Some amazing developments are underway in digital media convergence, what some call the ongoing migration from "old TV" to "new TV." TiVo, AppleTV, and "over-the-top" Web video on PS3, Xbox, and other peripherals all offer at least a glimpse of what's emerging. So does the gesture control of Nintendo's Wii, the expanding capabilities of IPTV, and the introduction of IMS-enabled TV (IP multimedia sub-system). All of this points to more choice, more relevance, and more personalized content for consumers: the individual TV experience.

Yet what's most fascinating to us as a Web hosting provider is the convergence of design for TV and the Web into UIs that have never been seen -- or even needed -- before: the creation of rich, dynamic, animated entertainment experiences, whether for your living room, your home theater, or public spaces. It is a new way to interact with media, something David Merkoski of Frog Design called "the televisual experience" in his presentation titled "The Future of Television: Super-Modality" (MP3 file) at SXSW 2006.

To give this more perspective, what does this mean for TV, video, the Web, and the new user interfaces for all three? Like the 10-foot experience itself, design for it is still emerging. UIs in development, for applications such as OpenTV and Windows Media Center, offer useful examples. The key is to design for distance (think of billboards, posters, even theater marquees): keep it large and simple. Most conventional Web design doesn't view well from a distance.

Here are some additional design guidelines to consider:

• Display: Design elements should be clean, with UI elements that are able to be seen easily from 10 feet.
• Navigation: Keep it very simple (up, down, right, left), and limit tabs and scrolling.
• Fonts and text: To increase readability, use anti-aliased serif fonts. Make them larger than 16 points, and limit the number of sizes.
• Graphics and icons: Avoid fine detail, single-pixel horizontal lines, and static UI elements that would flicker on NTSC.
• User input: Ensure that designs can support a standard remote control, so that users can easily navigate menus, zoom, etc.

Interested in learning more about designing for the 10-foot experience? Try these: "The Digital Home: Designing for the Ten-Foot User Interface" and "Introduction to the 10-Foot Experience for Windows Game Developers."

Please comment! We'd love to hear your thoughts on what promises to be a new frontier in entertainment.

As startups such as Blip.tv continue to grow and partner with old-guard media companies for television distribution, what will happen to the major networks, whose current model creates a scarcity of opportunity for revenue while requiring a "least objectionable programming" approach to content? Will network TV survive? Watch and find out what Hudack thinks.

Web 2.0 Fridays being what they are, the Blip.tv team geared up for beer and Rock Band about 5 minutes after the interview finished. More announcements about "super-secret" developments now in the works (Hudack's terminology) are to be released in the weeks to come.

Also on the list of desired experiences were things like chatting with other people who are watching the same TV show, accessing "Most Watched" lists, recommending shows to family and friends, and receiving recommendations in return. These items point towards a desire for TV to become less of an isolated, solitary experience and make it function more like the social networks we see online. (Perhaps instead of just having "online friends," we'll one day be "friending" people on our TV, too?)

If this happens, it will be an entirely new frontier for television. Watching TV has always been more of a passive activity - you switch it on, sit back, and allow yourself to be entertained. Adding a social element to TV will be a dramatic shift - and one that has to be done carefully in order not to mar what people have come to expect as the TV "experience." Time and again we've seen "Web TV"-like initiatives crash and burn, mostly because what people want from a TV is not the same as what they want from a computer.

But then again, maybe we shouldn't speak for the next generation of TV viewers users.

Gen Y, or "digital natives" as they're often called, has grown up plugged in. And those that follow them may be even more plugged in, if that's even possible. These are demographics that have been socializing online since they learned to type, often at very, very young ages... even as young as elementary school.

Is it possible that this generation of TV viewers will shift and shape what it means to watch TV? It's very possible. Gen Y is already not watching TV as much as they are going online. And when they do get around to viewing TV shows, it's usually time-shifted content courtesy of DVRs or it's content viewed online, where TV is now becoming more social. NBC Universal's Hulu.com has just introduced a friends feature, for example, which lets online TV viewers create profiles and "friend" other users. Soon that same experience may find its way to the living room, too. Time will tell.

Any serious Twitter user will tell you that half the fun of watching a major television event or popular show is tuning into the backchannel provided by those twittering their thoughts and reactions to what's being broadcast. An excellent example of this type of live backchannel was seen during President Obama's recent public address - a hotly tracked item on Twitter where the hashtag to follow was #NSOTU (aka "Not State of the Union.") Even lawmakers were getting in on the action by twittering from the House floor while listening to Obama speak.

This real-time view into the reactions of the crowd has been at times insightful, at other times humorous, but is always an interesting and interactive way to participate in any event, including something shown on TV. Yet when it comes to Twitter and the television, it's often a two-screen experience involving a web-connected laptop or phone and the TV itself.

But with Verizon's new widget platform, developers will be able to build widgets like this one which displays Twitter updates on your TV. But unlike Twitter's own search tool that only lists the trending topics, Verizon's widget demonstrates how Twitter could enhance your TV-viewing experience in a whole new way. When launching this widget, for example, one of the options is "current channel." Select that and all of a sudden you're seeing the tweets related specifically to the program or movie that you're currently viewing.

Another widget, this one for Facebook users, lets you update your status with a message about what you're watching. It also provides access to your friends and your photo albums.

These two widgets were built in-house by Verizon engineers and won't necessarily ship with the upcoming update to the DVR... but they could. In a recent demonstration of the software's capabilities, Joseph Ambeault, Director of Consumer Product Development Video, hinted that the company had talked to various internet companies about their providing widgets for the new platform. However, he would not confirm any specifics. (There were some very cagey head rolls - half nods, half shakes - when providing the non-answers, though!). We specifically asked about Twitter, but the Verizon representative said he could not comment. We're taking the decided ambiguity to mean talks began but nothing is official.

In fact, seeing the widget in action makes us wonder - is this a part of Twitter's mysterious business model? It very well could be. Verizon's widgets, which could potentially reach several million customers here in the United States, will be monetized through on-screen advertisements like banner ads. These ads, similar in look and feel to those seen on the web, will launch a quick TV commercial when selected with the remote control.

The Widget Ecosystem

At present, Verizon has widgets for weather, traffic, headlines, horoscopes, and community information. There's also an ESPN Fantasy Football widget which provides stats on your players and scores. But when the widget platform goes live, the potential for an entire ecosystem of widgets will explode. However, the questions as to how this ecosystem will look and behave are things Verizon is still figuring out as, up until now, they've solely focused on the technical aspects of the solution.

What they can say now is that widgets will be programmed using LUA, a standard technology which many game developers will be familiar with already. The process for signing up to create a widget won't involve any laborious steps, either. Instead, there will be a quick web form to fill out and then developers can gain access to the company's SDK (software development kit). According to Verizon, they're not interested in tightly controlling which widgets become available to their FiOS customers - they just want to provide tools for widget creation and sharing. As Ambeault describes it, the ecosystem's level of openness will be "somewhere in between Apple and Google" - a reference to the variation between the App Store approval process for the locked-down iPhones versus the wide-open Google Android platform.

Also of note, Verizon seems less interested in competing with the other newly launched widget platforms, like the Yahoo/Intel TV widgets that are being integrated into new televisions themselves, and are more interested in working to port those widgets to their platform. But when asked if they were working with Yahoo, the only answer was yet another cryptic head roll.

Internet Video with No Extra Box (Just a Computer)

Another aspect to the upgraded Verizon Web + TV experience is the introduction of internet content, searchable through their "Interactive Media Guide." When the new software launches, Verizon FiOS DVRs will stream software from YouTube, DailyMotion, Break.com, Blip.tv, and Veoh. The format conversion that makes this possible actually takes place on a computer connected on the home network running Verizon Media Manager software, not on the DVR itself. Verizon says they configure this software for consumers at the time of installation.

This Media Manager software also allows customers to stream videos and photos from their PC to TV.

Beyond the Net

Multiple upgrades to the DVR software will take place over the course of the coming year. The first upgrade, due out this summer, will deliver new features like the updated program guide with its richer contextual menus. Here, for example, customers will find things like colorful thumbnails of movies when searching through on-demand titles - an experience somewhat reminiscent of Netflix. Also included will be the ability to preview programs from channels you don't currently subscribe to and the option to then order the channel using your remote. Most notably, though, the summer upgrade (from version 1.6 to 1.7 of Verizon's 2nd-generation software) will introduce the internet video content. Later this fall, the widget SDK will launch.

Given Verizon's position as a TV company, phone company, ISP, and wireless provider, they plan to maximize their new software across all various platforms. Already Verizon mobile phones can access TV through V-Cast, but in the future they may be able to use the widgets too. Mobile phone users can also program their DVRs remotely.

Of course, this news is only of interest to Verizon FiOS customers - still a relatively small market here in the U.S. when compared to cable but one that's growing in key markets. However, Verizon's move is raising the bar as to what consumers will come to expect from their web-connected TVs in the future, whether the web content comes from Verizon, is built into the TV itself, or arrives as part of whatever comes next.

Remember Web TV? It's still around, believe it or not, now rebranded as MSN TV. With a set-top box and keyboard, you can browse the web from the comfort of your couch. For whatever reason, it didn't take off. From personal experience, after some initial oohs and aahs, our household quickly grew bored with our Web TV box. If you used the service, too, you probably felt the same.

Why didn't it work? Perhaps people didn't really want to use a keyboard in their living room. Or perhaps it just launched too soon. Its heyday was in the 1990's, a time when there wasn't as much compelling content to view. This was long before the launch of sites like YouTube and Hulu. Because of this and more, Web TV never became the revolution that it intended to be.

But today we're seeing a new attempt to revive the the goal of bringing the "internet to your living room." Instead of Web TV, what we're seeing instead are televisions being dubbed "connected TVs."

The New Connected TV

Sans set-top box, these new "connected" TVs have all the web-enabling components built right in. This apparently is what will be the reason for their success this time around...if you believe the hype.

One of the better integrations involves Netflix's deal with Korea's LG Electronics, Inc.Their partnership which will deliver a new line of high-def TVs with the Netflix service built directly into the set itself. With 12,000 titles to choose from at launch, this connected TV is one that's sure to become quite popular if the company can get the pricing right.

Other TV manufacturers including Samsung, Sony, LG, and VIZIO introduced sets with Yahoo widget technology integrated into their products. These widgets don't just provide Yahoo content like Sports and News, but rather deliver a platform on which widgets can be built. Says Yahoo, their platform allows developers to extend their "brand, services, and content" to new users by creating TV widgets using Yahoo's Widget Engine.

Yahoo Widget Engine, Now for the TV

The Yahoo Widget Engine evolved from the Konfabulator platform, a product that delivered some of the very first web-enabled apps that floated on your computer's desktop. These widgets give you quick access to information and news which you can see without having to keep a browser window open.

Now those same web-enabled widgets can be ported over to digital TVs. The Widget Engine provides an entry-level framework and Widget Development Kit (WDK) which allows developers to code for the constrained hardware capabilities of these new connected TVs. In addition, Yahoo's Widget Channel API will provide access to internet technologies including Konfabulator's JavaScript and XML as well as HTML.

There are already a few Yahoo! TV widgets available now and several more have been announced as coming soon. In the upcoming section, widgets from Showtime, Netflix, Blockbuster on Demand, CinemaNow, The New York Times, USA Today Sports, CBS Fantasy Football, Rallypoint Fantasy Sports, Acedo Funspot Games, Flickr, and, of course, Yahoo (News, Weather, Finance, and Video), have been announced.

Twitter from Your TV

Lest we forgot: there will also be a Twitter widget available. That widget alone could usher in a whole new area of interactive television. As we've already seen on channels like CNN, some reporters are currently using Twitter to gather real-time information about events from TV viewers. Imagine how many more people could participate if Twitter was enabled on the television itself. Outside of news, other shows could potentially use Twitter for entertainment purposes, enabling a live back channel where you could Twitter your thoughts or questions about the content you were viewing.

MySpace Brings Social Networking to the TV

Among the widgets available today, Yahoo has announced an eBay widget, a CBS Entertainment widget, and a MySpace widget. It's the MySpace one that's garnered the most press so far as it will enable two-way interaction with the social network and your friends while watching TV.

MySpace widget users will be able to receive dynamic updates from friends, read and respond to messages, browse friends' profiles, photos, and requests, and see status and mood updates. It takes the solitary act of watching TV and turns it into what could be a more social experience. It's easy to imagine groups of friends watching shows together, messaging each other throughout the viewing.

The MySpace widget, like several others, will be ad-supported. That raises the question if these new widgets could become a source of advertising revenue for content producers. As more people time shift TV shows for later viewing, skipping through the commercials with their remote, TV shows' advertising revenues have been affected. Now, TV networks could easily create and deliver widgets for their most popular shows, letting fans interact with each other whenever they watched, as they do on the numerous forum-like TV message boards found across the internet today.

Of course, we could be getting ahead of ourselves here with that last idea - nothing of the sort has been announced. Still, we think it would be a great idea. (Who wouldn't want to join a live backchannel of ABC's "Lost", for example? What is that smoke monster?)

Will Connected TVs Succeed?

Will the new internet-connected TVs work where Web TV failed? It's possible. For one thing, this time we're not just transplanting the internet in its entirety to the living room, where many people already stash their netbooks and notebooks for the quick Google search or email check during their TV viewing.

Instead, the TV experience is simply being enhanced by the web-enabled technologies - which you can choose to use or not use as you wish. If you're just relaxing, you may want to just enjoy the normal passive TV experience. But for certain events - favorite shows, sports, breaking news - you may choose to interact with others via the widgets over social media like MySpace and Twitter. Other widgets like News and Entertainment listings will also be convenient ways to get bite-sized information without having to pull out the computer.

The key point here with these new connected TVs is that the widgets don't interrupt what people think of as the "TV experience." Explains Genevieve Bell, an anthropologist and director of the user experience group in Intel's digital-home group, people have extremely strong bonds to their TV sets. "Any effort to add internet content needs to be just as simple and not interfere with the experiences and behavior patterns the users enjoy." What that means, she says, is that the interaction needs to take place using a conventional remote control - not a computer keyboard or on-screen web browser.

The only question that remains is whether people will buy a new TV just for the widgets? Probably not. This is a fun addition, but not a major technology breakthrough like HDTV. Still, if you're out shopping for a new TV anyway, a connected TV may certainly make your list as one of the sets to consider.

In the U.S., 10.3 million mobile phone subscribers watch video content on their mobile phones each month. These clips from mobile web sites, subscriptions delivered by the carrier, or through mobile "live" TV programming. But the mobile video subscription market has barely grown during the past year. In Q3 2007 it was at 6.4 percent and by Q3 2008 it was only 7.3 percent. And only 26% of subscribers who paid for mobile video services during the third quarter of 2008 used them at least once a month.

Taken at face value, these numbers look bad for mobile TV's future, but don't count it out just yet. New developments in the mobile video marketplace have the potential to reinvigorate the industry and allow it to grow once again. Says Nielsen, the expanded use of mobile web and mobile web video, an improved advertising subsidy to subscription-based streaming mobile video services, and the rollout of mobile digital television (mobile DTV) could combine to be mutually beneficial for carriers, device manufacturers, content providers, advertisers and consumers.

Free Mobile TV is Coming! (We hope)

Most notably, a groundbreaking new service made its debut at this year's CES. The Open Mobile Video Coalition (OMVC), announced that a new mobile DTV service will soon arrive in 22 U.S. cities, covering 35% of U.S. television households. The mobile service aims to provide live, local and national over-the-air digital television to mobile devices.

Included in the service are 63 stations from the 25 major broadcasters that are on board. Those include NBC Television, Gannett Broadcasting, Sinclair Broadcast Group, Fox Television, Belo Corp., Grey Television, Scripps Television, Hearst Argyle Television, ION Media Networks and Lin Television.

This mobile TV service may succeed where others have failed because it bypasses the carriers altogether. Instead, the service uses an ATSC broadcasting system to beam signals directly from the station to the mobile devices themselves. This unburdens the carriers from having to support the data transmissions - they just have to sell the phones.

What Needs to Happen

Of course, in order for this new technology to work, you have to have devices capable of receiving the signal. LG Electronics is prepared for that - they showed off prototype phones at CES along with DTV-enabled laptops, portable navigators, and in-car DTVs. Some laptops were shown with a USB dongle that included a long antenna which could bring DTV to anyone's computer.

Although mobile DTV holds great appeal (as evidenced by the enthralled crowd of spectators around LG's booth), in order to move forward, device manufacturers like LG and Samsung will have to remain committed to bringing these prototypes to market. Nielsen also notes that one forward-looking carrier needs to step up to the plate and deliver a handset that offers free DTV in order to generate interest in the service and grow the market. That certainly needs to occur before attempting to sell premium levels of content to consumers.

This would be a good path for the carriers losing customers to take as a way to differentiate themselves from the others. As more customers migrate to AT&T for the iPhone or to Verizon for the Blackberry Bold, for example, the losing carriers could introduce free mobile DTV services in an effort to win them back. Considering that both AT&T and Verizon already offer mobile TV through Qualcomm's MediaFLO technology, it will become more important than ever for the remaining carriers to do something in order to remain competitive.

Although we're not sure that a mobile DTV-enabled phone could get us to give up our iPhones and other preferred smartphones, we would at least like to see some free DTV options made available. At the very least, we would love to get our hands on a laptop dongle so we can watch TV anytime, anywhere. We hope that 2009 will be the year when this becomes an (affordable) reality.

Image credit: Mobile TV on MP3 player, courtesy of DVICE

This year, TV viewing is even breaking records. The average time a U.S. home used a TV set during the 2007-08 television season was up to 8 hours and 18 minutes per day, a record high since Nielsen started measuring television in the 1950's.

Since Nielsen only measures TV viewing in the U.S., that could explain the differences between their findings and those of the IBM study. Or perhaps the IBM study was just a little too subjective. A poll where you ask people to rate their own habits can't compete with the cold, hard data that comes from the Nielsen boxes installed in thousands of homes across the U.S.

TV Execs, Remember: All Three Screens Are Doing Well

We're glad that network TV isn't going away anytime soon, but we're concerned now that this report will give the ever-hesitant TV networks another reason to back away from making their videos available online. If they only hear the part about "TV viewing having a record year," then they're going to miss another very important aspect to this report: viewing has increased on all three screens. That means that even though TV viewing is an all-time high, both mobile viewing and online videos are seeing a surge as well. If anything, that should be a huge encouragement to the industry as it proves that, not only does online and mobile video not detract from TV viewing, there's an opportunity to monetize all three screens for record amounts of income too.

Of course, that's if you believe Nielsen's numbers. IBM said otherwise. (Wait, IBM said? Since when is IBM an expert in TV?) Well, maybe the other counties IBM polled are behaving differently, but here in the U.S. it seems the TV is still king.

Having played with the new version of Joost for awhile, it's obvious Hulu has nothing to fear. Joost currently has several issues that need improvement if they ever hope to succeed.

Have you been to the new joost.com yet? If not, go ahead, check it out now, we'll wait. Once you come back, tell us: how did you like that opening cartoon? We found it annoying and obnoxious. We get the idea - they're trying to be cute, but it felt like we had just accidentally tuned into Nick Jr. in the middle of the day.

2) Random Content Playing Upon Login

Let's say you take the plunge and sign up after the cartoon character prods you into doing so (Sign up! Sign up!), upon login you're not greeted with a slideshow of new and popular videos to choose from a la Hulu, you're greeted to some random video auto-playing for you. Sorry, but welcoming me to your site with Britney's latest video already blasting does not give me a good first impression.

3)Poor Navigation

When you first arrive on site, you're probably going to do one of two things: you're going to search for a particular show or you're going to explore what sort of content there is on Joost. If it's the latter, your eyes go to the top navigation to guide you. From the links available (Home, Friends, Groups, Shows, Music, and Film), only the last three are pointers to the site's video content. Each link takes you to a page where you can explore those top-level categories further by genre (comedy, drama, etc.).

Compare that with Hulu's navigation. At the top of Hulu.com, there's TV and Movies available to click on. Underneath those options is a nav bar that features Channels (a drop-down list by genre), Popular Episodes, Popular Clips, Popular Shows, Alphabetical (an A-Z list), and Network (for finding shows by airing network). These are tweaked slightly when you select "Movies." For example, "Network" becomes "Studio." But Hulu doesn't just stop there - beneath their slideshow of new videos are even more ways to navigate. Essentially, it's the same categories at the top (like "Recently Added," "Popular Shows," ), but here they're in columns where video thumbnail links take you directly to the hottest content.

Joost, on the other hand, only offers three static links at the top and the rest of their navigation is crammed into a confusing sidebar next to the video. The tabs across the top of this sidebar scroll horizontally, so you don't even know all your options without clicking around some.

4) Searches Don't Work Well

Let's say that instead of using Joost's navigation, you try to search for content. Using the popular MTV show "The Hills" for test purposes only (promise!), an initial search seems to return no results for that show. Instead, the first page of results lists shows like "The Hill," "Fire on the Hill," and others. It's not clear how they order search results, but it's not alphabetical. "The Hills" doesn't appear until page 4.

But a user isn't necessarily going to click into page after page of results to find their show, they're going to use one of the filtering options in the left sidebar. A quick scroll down the page shows a list of "Series" available, but nope, "The Hills" isn't there.

However, search for "MTV The Hills" and then you'll see a "Reality" sub-genre appear (it wasn't there before). Clicking on that will reveal the episodes. So what was that "Series" option for then? It must be for series where "hills" is in the episode title, but that's not intuitive by any means.

5) Watching Episodes In Order Is Hard

Let's say you've somehow managed to find episodes of a show you want to watch. Now, you're probably going to want to see the most recent episode...but which one is that? Continuing with the above example, the first episode of "The Hills" in the list is "An Unexpected Call," and the next to the thumbnail it notes "Added: Over a year ago." That can't be the most recent one? No, it's not. IMDB says that's Season 1, Episode 3. Most of the episodes listed in the search results, which appear in a completely random order, don't show Season number or Episode number, so unless you know exactly what you're looking for, Joost is no help here.

Now, for comparison purposes, a search on Hulu returns episodes in reverse order, most recent first, with Season and Episode number listed by each one.

6) Inconsistent Naming Convention

Continuing the example from above, the search results return an array of episodes from the MTV show, but not in any sort of order. To make matters worse, they don't even stick to the same naming convention. Some episodes are listed as Show - Title while others are listed as Show Ep.###: Title. What is this, user-gen?

7) Want More Of The Same? Good Luck

Now let's say that against all odds, you've actually managed to locate and play the video wanted to see. Isn't it reasonable that you might want to see more of the same? This should be available from the horizontal tabs in the right sidebar. The one tab in particular ("Channel") should show more videos from that source are listed. However, in the example we're using, that Channel contained nothing other than the one episode which was being streamed at the time. That's strange because other shows (like "The Daily Show," for example) list several more episodes in that list when you're watching them. Why the inconsistency?

Going back to Hulu, the experience is much different. Beneath the video itself, (using "The Daily Show" as the example this time because "The Hills" isn't hosted on-site), there are different sections to explore beginning with Episodes, followed by Clips, then an Episode List, Clip List, Discussions, User Reviews, and Recommended Videos.

8) Share And Shout?

When the video is playing on Joost, you might take notice of the buttons underneath the main window. The first one is "Share" - that's pretty obvious. You can share via email. There's also a button to share on social media via the "Add This" widget. Not quite as elegant as Hulu's better-integrated "Share" functionality, but it will do in a pinch. Right next to the "Share" button is a "Shout" button. Thanks to Digg, "Shout" makes us think of "sharing with friends," too, so this was a curious inclusion. Could this be some sort of IM option? No. Click "Shout" and you'll see - argh! - a return of the cartoon characters from the opening sequence. "Shout It Out! What does this video make you want to say out loud?", the site asks. It's like a FriendFeed "like" gone terribly wrong.

What's the difference between wink #1 and wink #4, anyway? And is #2 laughing or crying? And, oh dear lord, is #3 actually throwing up? Nice.

9) Why Two Search Boxes?

Just curious - if there's a search box at the top-right of every page, why bother adding a second in the sidebar? Just curious.

10) RSS Feeds Aren't Apparent

In another great design decision, the Joost RSS feed icons are greyed out unless you hover your mouse over them - then they're orange. Last we checked, light grey doesn't show up well and is often associated with a feature being disabled. As RSS fans, we don't like seeing RSS hidden like this. Hulu's RSS icon might not be much larger, but it's placement and color make sure it gets noticed.

Conclusion

If it's not obvious from this list, navigating Joost was much more trouble than it's worth. Of course, we would probably be willing to do so if Joost had exclusive content that we could only see on-site and not anywhere else on the web. However, that's not the case. Instead, Joost's new lineup includes full-length shows from CBS, Viacom and the Warner Brothers Television Group and other offerings which, according to NYT, include the "Friends" archives, "CNN: America Votes," 18,000 music videos, shows from MTV and VH1 like "The Hills," classic sitcoms like "Diff'rent Strokes" and a selection of movies, including "Jerry Maguire" and "Men in Black." Some of that content, like CBS and "The Hills," isn't available on Hulu, but Hulu will still return results as if they were. Clicking to play the video on Hulu takes you to the video's web site (CBS, MTV.com, etc.). So while some content may be hosted in Joost but not on Hulu, it doesn't really feel that way.

We'll give Joost some credit for making the transition from software to web, but it's hard to cheer them on when even their chief executive doesn't seem to have the enthusiasm to do so. Mike Volpi, a former Cisco executive, who took over the company over a year ago was quoted as saying this about the new site: "We'll just keep hanging around the rim to see if we get a break." Right. In the meantime, we'll be using Hulu.

To the average user, Hulu.com, the free web site that offers high-quality streams of TV shows and movies in the U.S., looks like a runaway success: the selection of available content is more than decent, Hulu's Collections make browsing related videos easy, HD videos have been made available, embed codes are provided for re-posting the videos on the web, and the site gets a good amount of traffic, too. In fact, Hulu's CEO reported in March that 5 million visitors watched videos on the site during the past 30 days while the service was still in beta, and that number has been increasing ever since.

Despite the number of visitors and streams, Hulu's success doesn't translate into big business - at least not yet. A recent Silicon Alley Insider article is speculating that Hulu will earn between $45 - 90 million during their first 12 months - April 2008 through March 2009. However, after paying off their content partners, their net revenue will be between $12.5 million and $25 million. (For how they arrived at those numbers, click here).

While those numbers aren't bad for a startup, as the article points out, they're not great for transforming Hulu into a wildly successful business, especially when you compare it to the "pay-for-content" iTunes model, which apparently turned a $570 million profit last year. Of course, iTunes' library is much larger, but it still shows that there is big money to be made by charging for content.

The problem with Hulu really has nothing to do with its design - sleek and easy to use - the problem is the tight stranglehold networks still have over their content. Major networks CBS and Disney (ABC) are not even on board yet and the networks that have joined yank their content down after it's five weeks old.

Instead of offering an online site that competes, not just with television, but also with our trusty DVRs that can record and save every episode of a show, Hulu only offers a smattering of hit-or-miss content where you're not even guaranteed to find the one episode you came to the site in search of in the first place. Case in point: Family Guy's "Blue Harvest" episode, a Star Wars parody, became so popular that it's been released as a standalone DVD. Even though having that episode alone could drive scores of visitors to Hulu's site, it's nowhere to be found. But do you know where it can be found in a matter of minutes? BitTorrent.

So, Hulu loses to the pirates when it comes to content and it can't even compete when it comes to offering a legal alternative to watching TV online either, since other networks don't want to participate, happy to host their streaming content on their own web sites or - in the case of some smaller networks - not at all.

Well, maybe Hulu doesn't really want to be a huge money-making machine. After all, isn't the internet all about serving the long tail? And the advertisers seem happy enough for now as it is. For example, a P&G spokesperson reported that the company, a partner since the beta launch, has so far been "pleased with the results from Hulu" and "will continue to evaluate it as a way to reach our consumer." Perhaps Hulu just wants to stay in the black while hoping to make a small dent in the number of users rampantly pirating video.

As Hulu grows in popularity, their bandwidth, marketing costs, and overhead will increase as well, and it will remain a struggle for the company to earn revenue. But if they can't make a successful business out of providing legal online video, then who will?

As it turns out, TidalTV is more like Hulu than Joost. The videos are available to watch online in the browser, with no software download necessary - not even a special browser plugin.

As far as content goes, TidalTV has quite a bit, offering up premium video from content owners such as the Associated Press, CBS, diy network, Fine Living Network, food network, National Geographic Channel, HGTV, MSNBC Features, NBC News Features, Ford Models, The Chef's Kitchen, Classic College Sports, Sports Illustrated, somagirls.tv, The Weather Channel, This Old House, TV Guide, Vogue TV, weddingtv, and the WSJ.

The viewing experience isn't bad, either. When the site initially displays, the video is in a small window on the left, with featured programs to the right and the full program guide below. One click on the video takes you to full screen. Move your mouse to the bottom of the video window, and the controls pop-up, letting you start, stop, pause, adjust the volume, and access other site features like the guide, your options, or site search. There are also three other buttons at the bottom right of the video window that let you share the video with a friend (via email only - no embed codes were available), mark the video or series as a favorite, and display the current program's description.

As with many online video services, TidalTV makes its money from interspersed, no-skip ads, but they were no more frequent or lengthy than you would expect - averaging about four per a half-hour of programming. The site also performed well in both quality and speed, though it's hard to tell how it will do under a load of traffic. Thanks to its quiet launch, there hasn't been a rush of users to it yet. However, at this time, transitions from page to page were smooth and videos began instantly, no stopping and starting and no buffering.

Try It Now!

Unlike with Hulu's beta, you won't need an invite or login to watch TidalTV - it's available to everyone. Check it out for yourself here: beta.tidaltv.com and let us know what you think in the comments.

Though the shift toward the PC for video watching is more pronounced among the younger set, Ipsos said the trend was "relatively consistent across all age groups and genders." Even though the study only looked at the viewing habits of those who have streamed or downloaded video content, previous Ipsos MediaCT studies have found that is a rapidly growing segment of the population.

"Today, about half of all Internet users aged 12 and up have streamed a video file online in the past 30 days," said Adam Wright, Director at Ipsos MediaCT. "We really see these share gains in non-traditional video channels as not simply an isolated, generation-driven market effect, but rather a large macro-trend in the way consumers want their video content delivered that those in the entertainment industry should increasingly be paying attention to as we look forward to the rest of 2008 and beyond."

Last week, 28% of ReadWriteWeb readers indicated that they prefer online TV to cable. Now we'd like to ask you where you're watching most of your video these days? Bear in mind that a DVD watched on your television, is still video consumed via TV. (We realize this is not the same type of poll conducted by Ipsos MediaCT -- though it was clearly inspired by their study.) Let us know in the comments the different places you're watching video these days.