Rumor: Hulu Will Soon R...

If you love watching TV shows on Hulu but don’t have a cable subscription, things could get a bit more complicated in the near future. According to the New York Post , Hulu could soon start requiring its users to prove that they also have a cable or satellite subscription. This would obviously turn Hulu’s current business model on its head. It’s not clear how many of the service’s 31 million users currently don’t subscribe to cable TV, but chances are that the service’s audience would shrink after this move. Keep in mind, this is just a rumor for now, but it’s definitely worth keeping an eye on. It’s also not clear if this subscription requirement – assuming it is actually going to happen – will just apply to Hulu’s free service, or if it will also apply to Hulu Plus subscribers. Hulu Plus, which costs $7.99 per month, currently has somewhere between 1.5 and 2 million paying subscribers. Update : We just talked to a source close to Hulu. According to our source, Hulu and its content providers have talked about this move toward authentication since 2009. Our source noted that Hulu has no interest in being a first mover here and that a requirement for authentication is likely still a few years out. Hulu, however, does want to be a good partner and may have to give in to its partners’ pressure soon or later.  Even though an authentication requirement isn’t likely to happen right away, though, our source notes that what could happen relatively soon is that the content providers could require longer delays before their shows become available on the service for non-subscribers. Cable subscribers, under this model, would get access to a show on Hulu the next day, while non-subscribers would have to wait at least 30 days. This model would likely also apply to Hulu Plus subscribers. As our own Alexia Tsotsis noted last year when the FCC gave the go-ahead for the Comcast-NBC merger, it issued a number of specific rules to ensure that this merger wouldn’t influence Hulu’s operations. These rules, however, did not specifically touch upon any future provisions that would tie access to Hulu to a cable subscription. NBCUniversal, News Corporation, The Walt Disney Company and Providence Equity Partners currently share ownership of Hulu. There have been persistent rumors that Providence Equity Partners is looking to sell its stake in the company to the rest of the owners, though. The New York Post’s Claire Atkinson argues that this move toward an authentication model is one of the main reasons why Providence Equity Partners is trying to sell its stake in the company. We asked Hulu for a comment about these rumors and will update the story once/if we hear more. One group that has already commented on these rumors is Public Knowledge , a group that works to “preserve the openness of the Internet” and promotes “creativity through balanced copyright.” In a statement , the group’s president and CEO Gigi B. Sohn writes that “restricting access to legal content will only drive consumers to find illegal content. In particular, we are concerned about restricting access to TV programming available over free over-the-air broadcasting. It should be available online, regardless whether anyone subscribes to cable or satellite TV. By putting more restrictions on consumer access to popular content, the entertainment industry only removes any justification for stronger ‘anti-piracy’ laws it is perpetually seeking from Congress.”

Please Welcome TechCrun...

There’s lots going on behind the scenes here at TechCrunch — not only are we hiring top writers and putting together a kick-ass lineup for Disrupt in New York next month, we’re also getting a chief operating officer (among other moves soon to be announced). Ned Desmond , a veteran media executive from Time Inc and more recently an entrepreneur, will be joining us as COO on May 7th. He’s going to be leading all of our non-editorial operations out of our San Francisco headquarters. He’ll also serve as the general manager of the AOL Tech properties. which include Engadget , TUAW and Joystiq . As Heather Harde’s replacement, Desmond is filling big shoes along with the rest of us. But also like so many of us at the new TechCrunch, he’s coming in with years of experience — that began with writing, actually He was a foreign bureau chief with Time Magazine during the 90s, and had a stint as a senior correspondent for Fortune. But he got caught up in the dot.com craze like so many others in Silicon Valley, heading up business development for then-popular search engine Infoseek before getting sucked back into the media world. Ned began last decade as the president and editor of Business 2.0, then leveled up to be the president of Time Interactive. That job included running its digital new business development and ad operations, as well as product, design and technology support. Among other accomplishments, he led successful relaunches for People, Entertainment Weekly, InStyle, My Recipes, Life and Health. He got back into the startup world in 2009, co-founding an outdoor sports site called Go Sportn, Inc., which has become a category leader in fishing and hunting verticals. Between his experience in startup and media operations, and his focus on creating great content, he’s going to be able to do a lot to build up TechCrunch and the other AOL Tech sites. Please give him a warm welcome.

With A New Educational ...

You may know TED , not as the guy from marketing, but as the nonprofit organization devoted to “Ideas Worth Spreading” — or as the set of global conferences, Talks, and videos that touch on the many heady, relevant issues surrounding Technology, Entertainment, and Design. As an increasingly powerful medium through which the world’s experts share their hard-won knowledge, TED is also an educator. In March, the organization launched the first phase of its “TED-Ed” initiative, in practice a series of a dozen short animated YouTube videos “created for high school students and lifelong learners,” in the big picture an invitation to teachers to collaborate with TED to create more effective video lessons that can be used in classrooms. Tonight, TED is announcing the second phase of its education initiative — a website that lives on TED.com, which is designed to enable teachers to create unique lesson plans around its video content. As TED’s curator Chris Anderson wrote in March, the platform is not meant to build an exhaustive online university, with entire curricula on video. Khan Academy and others are already well down that path. Instead, TED-Ed aims to harness the talent of the best teachers around the globe by giving them tools that spark and facilitate learning. Since launch, TED-Ed’s YouTube channel and its corresponding call to educators and animators to submit lesson ideas and animations has attracted 2.4 million views, 42K subscribers, and 3K comments, and more importantly, the interest of both educators and brands. The new TED-Ed site was built thanks to a $1.25 million commitment from Kohl’s Department Stores(!), and optimizes TED content for use in classrooms, boardrooms, and educational settings. The new site, which launches in beta, will initially only contain a few dozen videos, as it’s really intended for illustrative purposes, says TED-Ed “Catalyst” Logan Smalley . Since each video on the site is mapped via tagging to subjects taught in schools and is accompanied by materials that assist teachers and students understand the video lesson, this is more about what teachers can do with those lessons. Those supplementary materials include multiple-choice and open-answer questions, and links to relevant web resources on the video’s topic. But Smalley says that the real draw is that the site allows teachers to flip the content — meaning that they can edit or add to those materials as they see fit. Doing so automatically renders a new, private web page, which the teacher can then distribute and use to track students’ progress on the assignment. TED’s new website also lets educators create lessons from scratch using any TED-Ed video that allows third-party embedding (most of them) and distribute them to a wider audience, with the best of those new videos being featured on TED-Ed. The goal of this is to make “flip teaching” — in which teachers assign homework on video, something that’s difficult for most teachers to do — much easier. As the site is still in beta, TED will continue to add new features and content in the coming months (the site currently has about 65 videos), and expects to launch the site in full in time for the start of the school year in September. In regards to the goal of TED-Ed’s new site, Smalley described it this: The goal of TED-Ed is for each great lesson to reach and motivate as many learners as possible. The new TED-Ed website goes a step further, allowing any teacher to tailor video content, create unique lesson plans, and monitor students’ progress. By putting this new technology to use, we hope to maximize time in class and give teachers an exciting tool for customizing – and encouraging – learning. For more, check out TED-Ed’s new site here , or find TED at home here .

The Slow Decay Of The M...

Five years ago, Microsoft reported revenue of $14.398 billion. They reported a profit of $6.589 billion. Last week, for the same quarter , Microsoft’s revenue was $17.407 billion. Their profit was $6.374 billion. The company is still growing, but not fast. And they’re actually making less money. Compare that with Apple. Five years ago , revenue was $7.1 billion. Profit was $1.0 billion — the first quarter with a billion dollar profit in company history. Last quarter, the company reported $47 billion in revenue. And they recorded $13 billion in profit. On the surface, an apples-to-oranges comparison, perhaps. But it points to something that has happened. Apple has completely taken over the consumer market, while most of Microsoft’s growth these days comes from the enterprise side of things. Apple has destroyed Microsoft as a consumer technology company. Sure, Microsoft is still making plenty of money — billions — off of their consumer goods. But the decent quarterly numbers they reported last week in some ways mask what is really happening: Microsoft is slowing morphing into a full-on enterprise company. Everyone got all excited that the Windows division actually managed to grow last quarter. Because the broader PC market has been stagnant and Windows 8 is in testing mode, expectations were extremely low. 4 percent growth was considered a big win. But Microsoft as a whole saw 6 percent growth year-to-year when it came to revenue. It wasn’t Windows driving it, it was the Business Division (9 percent growth) and the Servers & Tools Division (14 percent growth). Again, the enterprise side of things. The Business Division is now by far the largest Microsoft division in terms of revenue. Meanwhile, Servers & Tools almost surpassed the Windows Division this past quarter. The last time that happened was the tail end of the Vista nightmare. It’s going to happen again. Microsoft’s two biggest businesses will be their enterprise businesses. Even on the Windows side of the equation, this was the key statement in the earnings release: Strong Windows 7 adoption continued with enterprise desktops on Windows 7 now up to 40% worldwide. Nothing about the consumer side of Windows, just the enterprise side. That’s what led to the 4 percent growth surprise. Windows 8 is due out at the end of the year, and I’m sure the Windows Division revenue numbers will jump as a result. But as these charts by Horace Dediu show, the jump is likely to be short-lived. Microsoft saw a huge revenue (and profit) spike when Windows 7 was released, then it immediately dropped and plateaued. It was back to the revenue grind and the profit stagnation. Windows 8 could be better for the company, or it could be worse. The world is drastically different than it was even just three years ago. The iPad exists, for one. While Microsoft is going all-in (or at least half-in ) on their tablet strategy with Windows 8, there’s no indication it will actually work. If it doesn’t that could significantly hurt the Windows Divisions’ numbers. Another key difference over the past five years is, of course, the iPhone. Five years ago, no consumer had one. Microsoft controlled nearly 35 percent of the U.S. smartphone market. It was going to be a huge business for them. Today, that percentage stands at roughly 5. And even with Windows Phone, it’s shrinking, as Dan Frommer points out today. Microsoft’s last-ditch attempt insert themselves into the mobile picture isn’t working. At least not yet. Consider this: Apple’s iPhone business alone is bigger than all of Microsoft’s businesses combined . And that matters because again, that’s where consumers are today. Smartphones. Tablets. The PC business is going nowhere. Let’s just admit it: that’s not going to change. The wildcard is the living room. This is the one consumer space where Microsoft has done better than Apple over the past 5 years. The Xbox 360 has been a big hit, and accessories like the Kinect have moved the market forward. Apple’s first Apple TV was largely a dud. The second one is much better and seems to be selling well, but it’s not a consumer hit in the same way the Xbox is. But last quarter, a funny thing happened: Microsoft’s Entertainment and Devices Division actually lost money. That had not happened since 2009. And it was the worst loss since 2007 — again, five years ago. Since Microsoft reports Windows Phone numbers under E&D, some assumed the poor numbers were a result of things like Microsoft’s Nokia payout dragging the division down. But Microsoft themselves noted that the 16 percent decrease in revenue was the result of “a soft gaming console market”. This was later backed up  by more numbers. The drop in revenue and the swing to a loss was all about Xbox demand evaporating. Now, obviously, the Xbox is old — some may say “ancient” by gaming console standards. And a new one isn’t due until next year. That device will undoubtedly do well, but you have to wonder if Microsoft wasn’t surprised by this swift drop to a loss for the division. If they weren’t, why not aim for a new console this year? It sure seems like they were counting on things like the Kinect to extend the life of the device, and that worked for a while, then collapsed. Meanwhile, gaming on iOS continues to grow. Anyone who doesn’t view the iPad as a legitimate living room gaming contender now is simply fooling themselves. And it’s a device that’s refreshed with the lastest hardware once a year. The Xbox is coming in three, four, or even five year intervals. That simply cannot compete given the rate of change we’re seeing. Microsoft is smart to move more into the broader entertainment space, securing content deals for the Xbox. But again, Apple will be there as well. At first through the existing Apple TV (with a killer assist from the AirPlay functionality). Down the road, perhaps with their own actual television. And then there’s the Online Service Division. Despite their “ operating loss improvement “, they lost another $479 million last quarter. The total losses for the division over time are approaching $10 billion as they chase Google down a rabbit hole to claim a consumer market they’re never going to win. To me right now, Microsoft’s consumer business feels like Nokia’s smartphone business a few years ago: the numbers look fine, and in some cases even good, but the world is quickly changing. If you just look at the past five years of what Apple has done versus what Microsoft has done, it’s not hard to imagine Microsoft’s business being completely dominated by the enterprise side of the equation in another five years. That will still make for a great business, but it’s not the Microsoft that many of us have known. Everyone you know goes away in the end, I suppose.

New Funding In Tow, Pla...

Titan Gaming , the makers of a gaming platform that enables content sites and social networks to offer cash and prize-based game tournaments, is today announcing that it is embarking on a complete makeover that includes its rebranding as Playsino , along with a new focus, CEO, and some new funding. Under its new moniker, Playsino will look to leverage its traction in the tournaments and virtual rewards space and double down on another emerging vertical: social casino games. Ambitiously, Playsino is setting out to build “the world’s largest social gaming casino platform,” and is naming a new CEO to help lead the way. Brock Pierce, who will be the startup’s CEO, is the managing Director of the Clearstone Global Gaming Fund, and a serial entrepreneur, having founded eight companies and acquired 30 more in various capacities. Pierce played an early role in the development of virtual goods, founding Internet Gaming Entertainment (IGE) in 2001 and Zam in 2003. In addition to new leadership, Playsino is also announcing today that it has raised $1.5 million in venture capital as part of an ongoing round. The investment was led by IDM Venture Capital, a Singapore-based venture capital firm, Pacific Capital Group, Siemer Ventures, and a number of angel investors, including Jordan Simons of GCP and Wicks Walker of W4 Ventures. Existing investor Tomorrow Ventures also participated in the round. With its new capital in tow, Playsino is setting out on a mission to build the largest free-to-play social casino on the Web. Pierce believes that social gaming is at an inflection point, and that social casino games are the catalyst for that movement. Half of the people on the web, or about 510 million, he says, play some sort of social game — a gaming audience that has grown by 71 percent since 2010. With H2 Gaming’s estimate that online gambling could be worth as much as $30 billion globally by 2013, and the U.S. accounting for $4.5 billion of that total, online betting represents a big opportunity. Social casino games have the ability combine the addictiveness of the games that have made Zynga such a big player in social gaming, like Farmville, with the monetization strategies of more hardcore games, which Pierce believes is a dangerous combination. The CEO says that he’s focused on using the startup’s new capital to step up internal development, but that the company also aims to publish relevant third-party content and will look to acquire independent players as well. So likely we’ll see Playsino developing its own casino games in conjunction with building a platform that allows developers and established players to sell their games as well, taking a cue from Zynga.com. While the space represents opportunity, the big casino and gambling companies are also in the process of moving online, and competition is certainly going to increase. There’s also been plenty of attention from the Justice Department, and as the space moves forward, it’s likely to include a number of regulations to protect consumers — but which may also limit the amount gamers are allowed to gamble. According to BusinessWeek , at least five states have already introduced legislation that would allow people to play web poker against those in other states. It’s a space that’s very much in transition as states consider online gambling legislation, and its evolution may well be shaped by regulatory restraints, but there’s certainly a lot of money to be made in social casino gaming, and Playsino wants to be a part of that. Though it’s still early, the established game companies have an easier road into social casino gaming when they see how the space will be regulated, so the startup will have to be ready with some addictive, quality games if it wants to avoid being stifled by the Zyngas and EAs of the world. For more on Playsino, check ‘em out at home here .