Networks have been experimenting with early releases online for some time now as a way to counteract modern viewing habits such as skipping past all the network promos with a TiVo. But just a couple of weeks ago, NBC Universal CEO Jeff Zucker was telling us all that by not airing Olympic events live or letting viewers watch them online, the network was creating "excitement" via "word of mouth" by withholding the opening ceremonies. Then again, the opening ceremonies in Beijing were actually interesting. The third-place network is correctly guessing that there's no way anybody is going to be eagerly anticipating the new season of Knight Rider — which is going to need all the help it can get.

The stated budget for the series of twelve episodes is $3 million, and the magazine, along with production partner IMG, will guarantee 83.4 million video views on social network Bebo alone — which works out to $35 per thousand, plus whatever Vogue takes off the top. The show will also be distributed on Hulu and Veoh, and on Vogue's online video outlet Vogue.tv, so any views over and above the Bebo number brings the CPM, or cost per thousand views, down for Express.

As one fashionista friend remarked, you wouldn't think Vogue would even let Express advertise in the magazine. Trendy knockoff retailer H&M would seem the better fit. But then I'll be getting enough product placement from the new season of Project Runway.

But the online percentage of that upfront spend has been slow to rise over the few years since YouTube was still being incubated at Sequoia, and remains in the single digits while the advertising industry is bracing for a downturn. At a certain point, VCs will come to their senses and stop subsidizing the bandwidth that makes these sites possible, while cable and network sites and startups like Hulu, with the copyright permissions and the content that sponsors love, will continue to outpace any revenue garnered from user-generated content — which one study estimates will account for only 4 percent of the industry's already paltry online video revenues.

While YouTube has hosted videos over ten minutes in the past, notably including feature film Four Eyed Monsters, in-house Google videos and Charles Trippy's longest YouTube video ever stunt, and early content partners have had the freedom to push the envelope from time to time. But now it's official, and it's certainly in the hopes of garnering better content, running more ads and pumping up "engagement" metrics like average time on site.

YouTube has become the poster child for the old saying "we are losing money on every sale, but we will make it up in volume." YouTube is broken. The reason is Hulu. Hulu posts clips on YouTube. Those clips cost Hulu nothing, generate traffic to its Hulu site on which it sells out. Two areas that Hulu is stomping Youtube: 1. Revenue Per Video 2. Revenue Per User. Hulu has the right to sell advertising in around every video on its site. YouTube has that right for only [a] small percentage of videos because YouTube hides behind the Digital Millennium Copyright Act. By next year, Hulu will have more total revenues than YouTube. The more traffic Hulu generates, the more money it makes. The more traffic YouTube generates, the more money it loses. Maybe they think they will make it up with even more volume?

(Photo by eschipul)

"Redlasso is an online media center for bloggers that records video and audio at the request of the participants of Redlasso's private beta from publicly available signals, such as cable, broadcast and satellite television," rep Saskia Sidenfaden explained. In other words, Redlasso servers watch the closed captioning signals for search terms set up by invited users to notify them of "newsworthy" clips and items. The company then distributes those clips from its own servers to embedded players on third-party sites.

Unlike other sites which rely on the DMCA's takedown provisions — under which users can post copyrighted content, but the site must take it down if copyright owners complain — Redlasso is relying on a "fair use" defense, a provision of copyright law which carves out exceptions for some kinds of reporting and commentary. Fair use rules are often unclear, though, and one question that comes up is whether the use unfairly exploits an existing market for the work. Until recently, it wasn't. But then News Corp. and NBC Universal started up Hulu — which also allows for users to search for clips which they can then embed on third-party sites.

A Redlasso investor explained on background that the startup had been talking to the networks for at least two years, and promised them the ability to track and control usage of their clips as they spread across the Internet — something Google's YouTube couldn't, or didn't want to do. Presumably, the company could have sold their technology to the networks, or formed content partnership agreements.

Hulu offers the same control, but it's run by the networks and offers many of the same features as Redlasso to users, though with significantly more limited content. CBS would have been a great target for possible sale, but CBS recently started working with Hulu, too.

Hence, the company's best hope is to strike a deal before too many more lawyers get involved, especially since it's still planning to close another $15 million in venture investment on top of the $9.4 million already raised. (Photo by AP/Richard Drew)

There's little chance that being posted to Hulu will cut into DirecTV signups and viewers, but more importantly, it means that online video consumers will be able to download the new episodes from file-sharing sites months before they're available from Hulu. The peacock would be smart to post them to Hulu as they air on the satellite net and earn a little ad revenue, or at least seed BitTorrent networks with ad-laden files. (Photo by AP/Paul Drinkwater)

The page design doesn't look like much, but the video looks great. Even without the polished design, this is a clear shot at Hulu, which currently hosts content from News Corp., NBC, and some other partners — but not CBS.

Is it just a coincidence that these episodes go live so soon after the writers' strike ended? That's the great thing about running the classics — the scripts, and the contracts, are already written. CBS runs ads before the show starts, and in mid-episode, likely commanding a healthy CPM. But enough about business: Pull up your office chair and watch Kirk battle some bizarre alien dragon. It'll bring back your childhood. Alas, no embedding allowed — likely because CBS also makes money on the banner ads surrounding the video player..

At the bottom of the Yahoo Video page, there's a section titled "More With Video." Flickr cofounder Stewart Butterfield promised Flickr, the popular photo-sharing site, would add video "soon" last summer. But his promise was empty: No engineering work had started at the time, and Butterfield himself would soon leave Flickr to go on paternity leave. (We hear he's coming back to Yahoo in another role, but not returning to Flickr.)

Still, video's long been seen as a natural extension for Flickr. The same digital cameras which take still photos almost all now capture video too, as do cameraphones. Why force users to go to two websites for the output of one device?

Which raises the question: Why did Yahoo Video relaunch with user-generated content? The rumor I'd heard was that Yahoo Video would become a showcase, much like NBC and News Corp.'s Hulu.com, for professional content, while the amateur stuff moved to Flickr. The obvious conclusion: Flickr's video features aren't finished, while Yahoo Video's were ready to go.

One would think proper leadership would have sorted this out. But of the managers in Yahoo's advanced-development division, one, Bradley Horowitz, just left for Google; another, Salim Ismail, was thankfully laid off; and the last, Chad Dickerson, had just been installed in his job before he got handed the management of what's left. It's no wonder that even when Yahoo manages to launch a promising new site, mismanagement haunts it.

Sure, some may label it as stealing candy from helpless billion-dollar corporations, but Veoh's evil genius outweighs its spendthrift sloth. By using Hulu's embed code, Veoh avoids pesky licensing fees, bandwidth costs, and negotiations. Instead, it gets to create a programming destination for a TV-starved audience. And NBC and News Corp. may well get the last laugh. While Veoh sells bottom-of-the-barrel banner ads around the embedded video, Hulu sells pricey preroll ads right in the video itself.

Site owner, operator and shameless promoter Matt Schlicht claims OpenHulu reached 100,000 unique visitors yesterday. That's a tiny amount in the grand scheme of things, but that's not keeping the buyers away. Schlicht claims "three different big TV-links type sites have tried to buy OpenHulu." He wouldn't give me names, but said the interested parties get between 500,000 and 1 million unique visitors on their own sites each month. This despite the fact that there are other sites built on Hulu embeds there, such as TV Paradise, example.

All this good news must have you people itching for schadenfreude. Well, no worries. For some reason — did we mention he's a shameless self-promoter? — Schlicht is getting plenty hate mail to go along with the resumes and offer sheets. He was only too happy to share them with us. (Shameless? Check.)

Fuck you OpenHulu. You claim to be "open" but I'm here in australia and I can't even watch a god damn video. This better not be just as ausies or I'm going to fucking kick your ass. Why the hell would you do this? Why block out australia? Who the fuck are you to judge who can watch videos and who can't? I hate you fat american pigs.

Dear Matt, your site sucks. It doesnt even have old episodes...get a job. You take up too much air.

You're one of those freaking people who actually think up a good idea. Not just a good idea though, more like an idea thats stupid as fuck but it will get popular. An idea like million dollar homepage or selling pet rocks. You were at the right place right time my friend, you're nothing. Just a worthless piece of shit piggy backer.

You are an ass hole. And this site is completely illegal. Hulu is a great service that is simply going through beta and you are misusing your beta opportunity. People like you make me sick

Not very. Kazerooni and his partner Matt Schlicht earned a whopping $38, making the site's effective rate a bottom-of-the-barrel $0.37 CPM. But don't worry, Kazerooni tells us: "I got [Schlicht] to switch out Adsense with ValueClick." So much for the moneymaking potential of online video! Somehow, I don't think this was what NBC and News Corp. had in mind when they launched Hulu. Or what Google had hoped for YouTube.

News Corp. has always been less vocal than NBC in supporting the technically inferior Hulu. No wonder it's playing the field. Silicon Alley Insider claims that Fox is in talks to bring its movie collection to iTunes next year, perhaps in time for a Macworld announcement in January.

NBC, too, is hedging its bet on Hulu. Some NBC shows will also be available on Netflix for purchase the day after shows air on TV.

The odd thing about both of these deals is that Hulu, which was supposed to function as a licensing agent as well as a video website, doesn't seem to be involved. With both of Hulu's ostensible backers looking elsewhere for online-video distribution, the question isn't whether iTunes is in trouble. The question should be whether anyone believes in Hulu anymore.

(Photo by MD111

• Hulu video is notably grainier than iTunes. See screenshots. It looks terrible blown up to full-screen on anything bigger than a 15" laptop.
  
• Hulu's player is much screwier than iTunes. "The following program is brought to you with limited commercial interruption by FILE NOT FOUND." "Firefox has blah blah blah give up."
  
• I would gladly pay extra, as I did via Apple, to lose the idiotic commercials. An uninterrupted Battlestar episode, or two or three, is a darkly absorbing visit to another world. Not so on Hulu, where Best Buy disrupts the fabric of the show's alternate universe. Ditto for the sudden drop of 30 IQ points whenever 30 Rock pauses for a commercial.
  
• The final insult: They don't have all the episodes I haven't seen. Why not? I'm serious. Dear Hulu publicists: Why not 30 Rock Season 2, Episode 1? Why only a few recent Galactica episodes and still not the new season opener I've been dying to see? Hit me at paul@valleywag.com.