Are people cutting the cord (i.e., getting rid of their cable or satellite TV)?

With Apple TV, Google TV, Boxee (the Boxee box is launching this week) and Netflix streaming coming to a huge array of devices, including most importantly the Wii and Xbox and PS3,  the challenge to the traditional television business is now present and very real.

But that threat isn’t about people cutting the cord. Instead, we’re adding a cord  — to the Internet.

The television business in the U.S. has been one of the one of the most profitable walled gardens, and one with the highest walls. Historically, it’s been difficult to get video programming on to your TV that wasn’t supplied by a cable network or television broadcaster or movie studio.

With our new Internet cord, though, we can get instant, on-demand access to programming on our TVs from places like YouTube, Vimeo, blip.tv and 1000s of other sites. The popularity of Netflix streaming — which, by some now figure accounts for 20% of all downstream traffic during the 8-10PM prime time window despite the massive limitations of their library — gives us a taste of what’s to come. On the Internet, we have 10,000,000s of clips to choose from. And that’s coming to a TV near you.

The history of cable television shows how this is likely to play out. As new programming sources are added, the amount of time we spent watching television goes up but the share owned by incumbents goes down. The amount of time we spent watching the traditional broadcast networks plunged as hundreds of new channels were added to cable networks. As we begin to watch more programming from the Internet, with it’s almost infinite supply of programming, cable and broadcast television companies have much to fear. (Graphic Source: tvbythenumbers).

For most American households, the television provides a hard-to-resist gravitational pull once we get home from work (source: Nielsen Webinar). Television viewership surges during the “prime time” hours (whereas usage of the web typically peaks in the afternoon, when people are still at work).

As it becomes as easy to watch YouTube as ABC on our televisions, what we watch during prime time will change. And this presents a huge threat to traditional broadcast and cable television, given prime time viewing accounts for 50% or more of total revenues from advertising for many cable and broadcast networks.

Arguing about “cutting the cord” misses point. That may, or may not, happen. But we’re definitely going to be adding a cord as we plug in our Apple TVs and Google TVs. And that will change things forever.

In Kilar’s post, he makes a big stink about rights owners demanding a per user per month fee for their content (something that is standard in cable deals between folks like Comcast and channels like ESPN). I speculated that Kilar was pushing this out of fear — that he was worried about this big pot of money Netflix could spend on simple fixed-fee deals (instead of per-month, per-user fees), an area where Hulu doesn’t have the cash to compete.

Reading Megan McCarthy’s piece tonight on The Atlantic (hat tip @persingerscott) makes me think it was a more nuanced, and much bolder, move — indeed, a smart bit of chess playing by Kilar. As McCardle points out, when media companies push for traditional cable-style per-subscriber per-month license fees (accompanied by hefty guarantees of course) it puts enormous pressure on Netflix’s margins. Kilar (and Hulu) know that.

Whereas similar demands (which most certainly are being made) to Hulu are less painful for them. Hulu’s subscription offering is, at least at this point, non-strategic. It’s a nice to have. The main game for them is advertising. So they can better afford to advocate these stye deals, which in turn are painful for Netflix to digest.

I don’t know, of course. what Kilar was thinking, but it’s all a good reminder that there is a fascinating battle being waged right now for digital media rights, and that even an entrenched digital incumbent like Netflix is struggling to keep pace with the rapidly changing terrain.

That would be “Turn of the Century” by Kurt Andersen, released in the midst of our First Big Tech Bubble of 1999, and in particular the protagonist George Mactier’s always-inventing brother-in-law who “proposes a chain of franchised, “mall-adjacent” cemeteries with video markers instead of headstones.”

Just like OnionSkin jeans in Super Sad True Love Story, Facebook Timeline-powered digital headstones are bound to happen. Bank on it.

Some movies you watch, enjoy, have a few laughs, are diverted from life for an hour or two. Others stay with you for days, weeks, months. The best, like the best novels, make you think about the Big Questions — the meaning of life, what is love, what is it to to do good, to live a good life. “The Thin Red Line” is like that.

It debuted in late 1998 — the height of Monicagate, when the American economy was booming and so many of us were seduced by the narcotic of easy money in the Dot Com boom. The film was an affront in so many ways to that era, and even though it was nominated for seven Oscars including Best Picture, it of course lost out to a movie that more accurately captured the zeitgeist of the day, the amusing trifle “Shakespeare in Love.”

But that doesn’t matter. We’ve forgotten about “Shakespeare in Love” – it had all the staying power of an amuse-bouche – but great works of art endure, and indeed grow in their importance and impact. They change lives. But it takes abundant courage to make them.

That’s a lesson to keep in mind in our world here in the Valley, particularly in the era of increased froth, where the siren song of greed rings louder than ever.

Are you going to make something great, and enduring, that makes peoples lives better? Like Apple, Google, Wikipedia, WordPress, flickr, Square, Twitter, Kickstarter, Bandcamp, the Khan Academy (and, I hope, Showyou)?

Or, do you just look at business as a way to make a quick buck? Do you just want to start a grilled cheese franchise?

You are what you do.

So many things about the A’s reminded me of the baseball team I grew up with — the 1970s and early 1980s era Baltimore Orioles. The terrible 1960s era multi-purpose concrete monstrosity, Memorial Stadium, an offense to the George Will purists but a delight to the rest of us. The team full of superstars and cast-off renegades; Jim Palmer and Cal Ripken and Eddie Murray, but also characters like Rick Dempsey, John Lowenstein, Tippy Martinez and the incredible and irascible manager Earl Weaver. The mostly blue collar fans, from a decaying industrial port, seeking hope and meaning missing from their daily lives by pulling for their team and reveling in wins by their underdog, small market team. With the A’s, I saw a link to all that.

I’m still an A’s fan and will be an A’s fan — American League, baby! —  but I’ll confess to really, really enjoying these 2010 Giants. Brian Wilson in particular is a blast to watch, and reminds so much of my Orioles heros — John Lowenstein (the platoon outfielder with the gift of gab) and Rick Dempsey.  They’re the team the A’s ought to have, and all credit to Brian Sabean who has done a better job of being Billy Beane than Billy Beane. At least this year.

Obama’s bloodless rationality has helped spawn the right’s bloodletting of irrationality. His ivory tower approach to the nation’s fears and anxieties about the economy gave rise to a tower of angry babble.

You gotta be kidding me. It’s stunning that the NY Times pays her a salary for these kind of stupid, intelligence-free turds.

There are so many things wrong with this, one hardly knows where to start. Is Dowd trying to out-insane Christine O’Donnell?

Calling Vanity Fair — would you please send Maureen back to Saudi Arabia for six months for another assignment on burqinis?

I’m no Flash (or Adobe) partisan, I just look at the facts. And the facts are that more video has been made available, and watched, online than ever before, almost all of it in Flash. Just look at the numbers. A lot of the video explosion has happened because of sharing — embedding of videos into our blogs, our Facebook pages, and through sites like the one we run at Vodpod.

In general, I would hope that most people think this has been a good thing. It’s fun to share a video through your blog or Facebook or Twitter or Vodpod; it’s fun to discover a new video through a friend’s Tumblr or Facebook page or Vodpod collection. If you do think it’s a good thing, take a moment to thank the Flash format — it made it all possible.

It’s clear, though, we’re at the beginning of the transition to an HTML5 world. In general, I think this will be a good thing. And in general, I think over time we’ll have as much video sharing through HTML5  as through Flash.

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But there will be some hurdles to cross first. And because of what we do at Vodpod, and the fact we talk to almost all of the major video players regularly, I thought it would be good to lay out some of the issues the industry is confronting:

1. Stream Security

The really cool thing in the HTML5 spec is that video is now a tag, just like an image. Awesome. But, you know you can right-click and save an image from a browser? You’ll be able to do that with video, too. Awesome, right? Well, not if you’re someone who doesn’t want your video to be saved and shared. Like Hulu. Or most major media companies. Or filmmakers.

Providing stream security is easier you’re hosting the video on your own site (a little javascript will do the trick). But harder if you want to make the video shareable. There will need to be some innovation in the coming months before people feel comfortable handing out embed codes for their videos in HTML5. And it may even take a few years before mainstream media companies get comfortable with this.

2. Advertising

A whole industry has been built around enabling in-stream advertising within Flash players. Few people love sitting through a 30-second commercial before that funny SNL clip; but that advertising is what has enabled so much video to be published online.

Will this happen in HTML5? Yes, but work still has to be done. Flash provides nifty player controls that make it a little easier to program in your in-stream advertising; support for that in HTML5 has to get built out. That will take some time.

3. Analytics

Another key thing enabled through the Flash player has been tracking and analytics. Video publishers want to understand how and where their videos are being watched. That’s understandable. Replicating this with HTML5 should be doable; it’ll just take some work. And that will take time, too.

The long-and-short of it is that there is a lot of work to be done before HTML5 video is as easy to share as Flash video is today. There are a lot of press releases out there being bandied about, talking about how folks are ready for HTML5. But dig a little, and you’ll find there are lots of holes.

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One of the smartest things I’ve heard in a while about all this was at a SXSW panel on HTML5 video led by Christopher Blizzard, head of developer relations at Mozilla (UPDATE — I should have also linked to this excellent post from Blizzard on the thorny format issues still to be resolved). He fielded a flurry of questions about some of these practical issues I’ve noted above and said (I’ll paraphrase here, and Christopher can correct me if I’ve got the paraphrase wrong) “People should look at HTML5 video as something new, and we’re excited or the new things people will do with it. Don’t look at HTML5 video as a replacement for something that you’re already doing with video on the web.”

And indeed, Firefox walks this talk; it will support both HTML5 video and Flash. It lets developers and consumers and video publishers decide which formats fit their needs. Isn’t that the way it should be?

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That the transition from Flash to HTML5 will ultimately happen I have little doubt. The big players are moving now. It just won’t happen overnight. And it may be a long time before you see video sharing enabled by major media companies in anything other than the Flash format.

The folks for whom this transition is hardest are all those video publishers out on the long tail. Sites like TeacherTube, fora.tv and Pitchfork.tv.  Those are the folks caught in the crossfire of this Adobe-Apple war. Flash — and a whole set of businesses and industries built to support it — has made it easy and simple to get videos published online, with advertising support if needed, and made shareable. Time, energy and resources will have to be expended to replicate all that in HTML5.

Apple could have acted like Mozilla. They could have provided robust support for and encouragement to adopt and use HTML5, but also included some support in the browser at least for the Flash plugin. That would have allowed all of us — consumers, publishers, developers — a say in which format worked best and how and when to move to HTML5. It would have made browsing on the iPad a much richer experience in the shorter term, while still pushing the migration to HTML5 in the longer run. I guess time will tell if it was the right call. (And it’s worth noting that almost everyone else — including Google and Microsoft — has made or is making a very different call, one like Mozilla’s).

In the meantime, this line from Brian Lam’s excellent iPad review continues to resonate with me:

I check my surf and snow sites and most of them work fine. Once, I see a video from some no-name site of the big storm that hit Tahoe with 50 inches of snow last week while covering the iPad launch in NY. It doesn’t work…. I bet that video was really good. Every time this happens, I get a little upset, which eats away at my affection for the iPad. This happened 3 times today, and will happen many more times before mom and pop websites get rid of Flash.