Comcast’s purchase of TV network NBC and movie studio Universal seems backwards to older media veterans who remember the ascent of upstart cable versus the powerful Big 3 TV networks in the 70′s/80′s. It proves that media itself has become a commodity to be digested across a panoply of distribution channels. It just so happens that cable, with its reliable subscription revenue streams and multiple channel assets, now has more financial clout than advertising based network TV and with it, the ability to finance programming through a movie studio as well.

Moreover, TV/cable and Internet are merging towards display across a common TV/monitor display platform. Cable channels pay significant syndication fees to broadcast relevant programming. They are curating content for their audience. However…

Social media facilitates the same content curation done by cable channels. Justin.TV allows anybody to broadcast hit movies (illegally) like a Showtime channel and now, personal broadcasters can get paid for it as a pay-per-view affiliate:

Obviously, copyright issues on Justin.TV seem to fall by the wayside just as they have done on Youtube (Google no longer seems diligent in deleting uploaded copyright content). This tolerance becomes a moral hazard that makes copyright protection unenforceable.

Like other content, video has essentially become free and curatable. For every Hulu, there will be copycat channels. Even Hulu’s exclusive licensed content are easily replicated by screen scraping video software like Camtasia.

Justin.TV’s pay-per-view channels will be the first of a new video revenue model that YouTube (which already announced this intention) and other video channels will follow. Why? Because everybody wants to be a broadcaster.

Justin Kan, founder of Justin.TV, achieved notoriety in March 2007 by hooking up a webcam on a helmet and broadcasting his life 24-by-7. Justin.TV was born to facilitate similar life streaming broadcasts by individuals.

The evolution of the business model twisted from personal, user-generated broadcast content, Justin style, to a media site that hosts individual broadcast channels.

It’s a play on the “be your own DJ” online model, and many participants are using the pulpit to broadcast sporting events and movies that they are (likely illegally) re-broadcasting from existing online subscriptions. The more interesting feature that YouTube or Hulu don’t have is real time chat functionality to pundit the broadcast.

The moral of the story is the power of combining cutting edge technology (in this case, online streaming video) and outrageous action to develop first, celebrity, and then an online media model. Through discovery, a true online business model – personal broadcast channel – emerged based on the simple cable access channel paradigm.

The Portable Social Graph is a killer concept behind the future social media business model. Very few can envision it because few live examples exist melding social networks like Facebook, LinkedIn or Twitter into more traditional popular websites – ecommerce sites like Amazon, media sites like NYTimes or Hulu, and corporate/organizational sites like Toyota or NFL.com.

Razorfish, the new media ad agency, and its CEO Shiv Singh explain the potential power of Facebook Connect to bring social groups (“the social graph”) into transactional websites. Brilliant presentation…

Eventually all Internet-based video formats will easily play on an HDTV screen. Until then, YouTube will continue to increase the size of their player to begin to replicate a TV watching experience. It has now graduated to 16:9 960 pixel width, about the same size standard adopted by video competitor Hulu.

The killer app seems to be the connection between the HDTV and the PC. Now, I attach the HDTV and the PC using a VGA cable. Why don’t TV manufacturers develop a Bluetooth application that replaces the VGA cable. A quick search engine check of Bluetooth-based HDTV reveals only a 2007 released Samsung model that doesn’t seem to have this functionality.

Anything else out there that makes internet video watching as easy as turning on the TV?

Three snippets of recent buzz about Hulu:

1. Hulu has attracted advertisers used to the TV advertising model (Alley Insider 11/10/08)
2. Hulu is easier to use when searching for TV and movies. YouTube is a mess (NYT 11/10/08)
3. YouTube is playing catchup to Hulu by offering brand name content – announces MGM film distribution deal (Wired blog 11/10/08)

Six observations about Hulu:

1. Hulu is a replica of TV. No user-generated surprises, all programming has been broadcast traditionally.
2. Strange to say, but Hulu’s success is based on copying the old world broadcast TV business model. This reinforces the fact that advertisers like the plain vanilla advertising model.
3. Hulu gets complete support from the media industry because it’s one of them. YouTube / Google is still sparring with Viacom in court.
4. Hulu is evolving naturally as a mass media, not a social media, model. It says a lot that the masses will go to Hulu when they are tired of the amateur quality of social media.
5. Cable companies, a natural play for developing their own Hulu-like content distribution systems, hesitate to break their lucrative cable subscription fee model. Online media is perceived as a threat, just like newspapers thought last decade.
6. Consumers have gotten used to fighting content distribution bottlenecks. Hulu delivers what they want free.