We’re seeing lots of that as the last bubble shakes out (see: MySpace and iLike, Facebook and FriendFeed). But that strategy also raises plenty of eyebrows from other buyers, who figure that they’re happy to let a struggling company fold, then pick up the talent piece by piece.

Did that just happen with Joost and Time Warner Cable (TWC)? Looks like it.

The cable provider has snapped up former Joost CTO Jason Gaedtke. The company tells Cable Digital News that Gaedtke will report to Mike Hayashi, the multiple system operator’s executive vice president of advanced engineering.

The assumption is that Gaedtke will be helping the company build out its own version of “TV Everywhere,” the Web-video-for-subscribers scheme that everyone from Comcast (CMCSA) to AT&T (T) is trying out.

Not an earth-shattering hire, but I’m noting it here because prior to Joost’s decision to all-but-pull-the-plug, the start-up was trying to peddle itself to buyers like…Time Warner Cable.

The theory: The Web video company hadn’t been able to generate much business, but it had a lot of smart people who could help, say, a cable company build out its own Web video strategy.

So, given that the Web video industry is in the midst of a long-awaited contraction, is Gaedtke’s hire the kind of thing that could undermine other potential deals? We’ll see.

What is it? A TV (and movie) portal that looks more or less like every other TV (and movie) portal on the Web: Hulu, TV.com, Sling.com, Fancast, etc.

The only reason for AT&T (T) to launch its own portal now would be as a placeholder until it launches its own “TV Everywhere” play, where subscribers to its  “U-Verse” TV service would get Web access to cable shows. That’s the same strategy that Comcast (CMCSA), Time Warner Cable (TWC), Verizon (VZ) and everyone else in the pay TV business is trying.

But while AT&T will likely be doing the same, this site isn’t for that. At least, not according to the note AT&T sent to NewTeeVee, which makes it sound like the company is creating…another free Web TV portal:

We have started a soft launch of a new site called AT&T Entertainment. This site will feature free online content available to any consumer. We’re finalizing a few final elements, and we’ll share more details on our official launch soon.

Allrighty, then. As AT&T says, it’s a soft launch, so maybe when it’s ready for primetime, things will make more sense. But for now it’s a head-scratcher.

One thing that distinguishes AT&T’s site from, say, Hulu: Hulu lets you embed clips from the site on your blog, while AT&T’s site, which relies on Hulu for much of its content, doesn’t. So here’s an awesome, upsetting clip you can see on AT&T’s site, but can only embed by heading to Hulu. Makes sense, right?

Minson is actually rejoining AOL–he was previously an SVP in its finance department and left to join Time Warner Cable prior to its own spinoff from Time Warner.

It’s one of a series of top-level moves Armstrong has made since leaving Google (GOOG) to run the Internet pioneer, now set to be spun off by its parent company later this year (if it isn’t sold first). He brought in Jeff Levick, another Google vet, to replace Greg Coleman as sales boss. And he purchased Patch Media, the local media company he had invested in, installing its CEO as the head of a newly created AOL venture arm. Former Bebo boss Joanna Shields is also out the door.

Here’s the release:

AOL NAMES ARTHUR MINSON AS CHIEF FINANCIAL OFFICER
Time Warner Cable Deputy CFO Rejoins AOL; Brings Critical Expertise from Time Warner Cable’s Successful Transition to Independent Public Company
New York, NY, August 27, 2009–AOL today named Arthur Minson as the company’s new Executive Vice President and Chief Financial Officer. Minson joins AOL from Time Warner Cable (NYSE: TWC), where he has served as Executive Vice President and Deputy CFO and helped manage that company’s separation from Time Warner. Prior to his role at Time Warner Cable, Minson led AOL’s Corporate Finance and Development activities. 

”We’re delighted to have Artie back at AOL as we continue our transition to an independent public company,” said AOL CEO Tim Armstrong. “Artie’s strong financial acumen, operating experience, and deep understanding of our company and the Internet and content industries make him a perfect fit for AOL. He’s also a public company veteran who helped handle Time Warner Cable’s transition to a public company. Artie will hit the ground running and be a tremendous asset to AOL as we focus on driving growth, value and innovation.” 
”This is a wonderful opportunity to rejoin AOL at one of the most important and exciting times in this great company’s history,” said Minson. “AOL has an incredible collection of assets, and Tim has set the company on the right strategic course. I look forward to working with Tim and the entire AOL organization to help maximize the financial and operating performance of these assets and their value for investors.” 
In his new role, Minson will oversee the Company’s financial functions including accounting, financial planning and analysis, tax, treasury, human resources, mergers and acquisitions, and internal audit. Minson will be headquartered in New York City and will begin at AOL on September 8, 2009.
 
Minson previously served as Executive Vice President and Deputy Chief Financial Officer at Time Warner Cable, overseeing the company’s accounting, financial planning and analysis, operations finance, corporate services, and internal audit functions. He also worked closely with TWC’s treasury and IR departments, as well as senior management, to craft company strategy in those areas.
Minson joined Time Warner Cable in 2006 in connection with its planned IPO. Prior to that, Minson was Senior Vice President, Corporate Finance and Development at AOL, where he was responsible for financial planning and analysis, mergers and acquisitions and corporate financial administration. He’s also held senior finance positions at Rainbow Media Holdings, Inc. and Time Warner Inc. Minson, a CPA, began his career in the Audit Practice of Ernst and Young as one of Time Warner’s principal outside auditors. He holds a BSBA in Accounting from Georgetown University and an MBA with a concentration in Finance from Columbia Business School.
 
On May 28, 2009, Time Warner Inc. announced that its Board of Directors had authorized management to proceed with plans for the complete legal and structural separation of AOL from Time Warner. Following the proposed transaction, AOL would be an independent, publicly traded company. Time Warner has indicated that it aims to complete the proposed transaction around the end of this year. 

Minson is replacing Nisha Kumar, who left the company earlier this summer.

Discovery joins other big names like CBS (CBS) and Time Warner’s (TWX) HBO and Turner, in Comcast’s (CMCSA) “On Demand Online,” which launched last month in a few thousand homes. The program is designed to convince Comcast subscribers to stay on as subscribers, since only subscribers will get Web access to the programming. It’s an answer to Hulu’s offering, which makes shows from News Corp.’s (NWS) Fox, GE’s (GE) NBC and soon, Disney’s (DIS) ABC available to anyone with Internet access.

It’s a variation of the “TV Everywhere” program Time Warner has been touting, and similar to ones that other cable providers, like Time Warner Cable (TWC), and telcos like Verizon (VZ) and AT&T (T) are pursuing.

Like most of the other networks that have linked up with Comcast for the On Demand test, Discovery isn’t handing over its top-tier stuff. You can’t see “Deadliest Catch,” the network’s show about grumpy Alaskan fishermen, for instance.

Meanwhile, some of the stuff you can get will be “windowed”–the industry’s term for holding shows back from viewers to maximize TV eyeballs. Episodes of something called “Verminators,” for instance, won’t be available until a week after they air on TV. But! Comcast subscribers will be able to watch episodes of “Man Vs. Wild” and “Swords,” which will be available the day after they air.

And any full-length programming that Discovery puts on the Web is a change for the cable network, which has held off from doing so precisely because it didn’t want to upset Comcast, which pays it a hefty fee for its programming.

Related note: I hate the “On Demand Online” tag Comcast uses to describe this strategy. And the Comcast people hate it when I call this “Web TV you’ll pay to see.” Their point is that you’re not paying any additional fees in order to get this stuff on the Web; my point is that only paying Comcast subs can see this stuff, as opposed to Hulu’s free-for-all (for now) offering.

So, can anyone suggest a different name? Give me a good one and I’ll use it.

Meanwhile, here’s a “Man Vs. Wild” clip featuring a pesky porcupine:

A good bet: Veoh, one of the best-funded would-be YouTubes. Multiple sources tell me the company is aggressively marketing itself in hopes of finding a buyer.

And if a deal does go through, it will result in a loss for the company’s high-profile backers, who include former Disney (DIS) CEO Michael Eisner and Goldman Sachs (GS). I’m told that CEO Dmitry Shapiro has been shopping the company at prices below $70 million, which is the amount investors have sunk into the portal since 2005.

What happened to Veoh? The same thing that happened to almost every other Web video portal that isn’t Google’s (GOOG) YouTube or Hulu: Not enough audience, not enough ad revenue, too many costs.

Veoh claims an audience of about 25 million users, which is less than auditors like comScore (SCOR) report, and is, in any case, an order of magnitude smaller than YouTube’s. Sources tell me the company lost money on revenue of about $6 million last year. Sales are up and executives are optimistic it could break even this year, but the trajectory isn’t high enough to keep Veoh afloat as an independent company.

Complicating matters for Veoh is a costly court battle with Vivendi’s Universal Music Group, which accuses the company of copyright violations. That two-year-old fight has cost the start-up millions in legal fees.

The fact that Veoh’s backers include media-savvy players like Time Warner (TWX); former Viacom executives Tom Freston and Jonathan Dolgen; and Spark Capital, one of the primary investors in Twitter, hasn’t been enough to help the company extricate itself from the suit.

In April, Veoh laid off a good chunk of its staff, replaced CEO Steve Mitgang with Shapiro, the company’s founder, and focused its energy on a new “Video Compass” player that users are supposed to download and install in their Web browsers.

At the time, Shapiro said that the company’s Web portal business was a success but acknowledged that “quite frankly, there are a lot of things like that.”

So who would buy Veoh? Theoretically, at the right price, the company could be attractive to a large Web player like a Yahoo (YHOO), which used to be a big player in video back when video was a small market. Or the company could try marketing its technical expertise to a cable/telco company like Time Warner Cable (TWC) that hasn’t done much with online video but says it will soon.

But rival Web portal Joost tried making the same pitch to various buyers over the last few months and couldn’t get a deal done. Last week Joost laid off most of its staff and said it would try to go it alone as a services company.

This kind of flux is now par for the course among the big Web portals that thought they could rival YouTube, or at least secure second place. But Google’s lead over everyone else in video gets bigger every day, and its primary competitor is now Hulu, which has the advantage of premium content from its Hollywood owners–Disney, GE’s (GE) NBC Universal, and News Corp.’s (NWS) Fox.

In addition to Veoh and Joost, France’s DailyMotion has swapped out CEOs in recent months and is reportedly looking to raise money. Meanwhile, Metacafe, yet another video hub, has hired boutique investment bank Think Equity to look for “strategic investors to provide expansion capital.”

Metacafe CEO Erick Hachenburg says his company doesn’t need the money and can survive on its own if it doesn’t go ahead with a deal. “You would expect in this marketplace that you’re going to have a shakeout, and the stronger players are going to make it,” he says.

That sounds right. The question is whether we’ll have more than two players left when this is all over.

The service is laying off the majority of its employees, and CEO Mike Volpi (pictured right) is out, replaced by Matt Zelesko, who had been SVP of engineering. The Joost.com portal site will stay open, but best to think of it as an ad for the company’s hosting and distribution services, which it will try to sell to cable companies and the like.

A Joost spokesperson declined to say how deep the layoffs will be; but I’m told that the company, which had more than 100 employees last fall, will be down to a couple dozen after the cuts are done. In a post on Joost’s Web site, Volpi said the company “will say goodbye to many of our colleagues and friends.”

This isn’t a shock: Joost’s fate has been the subject of whisper and rumors for the last year or more. The service made an initial splash in 2007 by raising $45 million from the founders of Skype and an array of high-profile investors and media companies, including Sequoia Capital and Viacom (VIA), and was initially supposed to deliver copyrighted content via a peer-to-peer distribution system and a player that users downloaded to their desktops.

But YouTube, and later Hulu, conditioned users to watch video via their browsers, and Joost’s software never caught on. By last fall, the company had retooled and began offering video via the browser like everyone else, but it has never been able to generate a significant audience. In November, a month after the company launched its Web browser, it said it was attracting 2.1 million unique users world-wide, a fraction of YouTube’s audience, and well behind rivals like Hulu, MetaCafe, Veoh and DailyMotion.

Here’s the service’s unique visitor count, per Comscore (SCOR); Joost’s unique viewer count, which is the more relevant metric for video sites, is considerably smaller (click to enlarge):

Joost has been a frequent candidate for buyout rumors, and the company hasn’t gone out of its way to deny them. The supposed buyers would be cable companies like Comcast (CMCSA) Time Warner Cable (TWC) or telcos like AT&T (T) and Verizon (VZ), which would presumably use Joost’s technical team to help build out their own Web video plays.

But some of the cable guys and telcos insist that they’re fine with the people they have. And if they do want to buy a video player, they have plenty of options: Just about all of Joost’s peers have been on the block, formally or informally, for the past few months.

JOOST TO PROVIDE WHITE LABEL ONLINE VIDEO PLATFORM

NEW YORK AND LONDON – June 30, 2009 – Joost, the online video startup, announced today that, along with Joost.com, it will focus on providing white label online video platforms for media companies, including cable and satellite providers, broadcasters and video aggregators. This technology and service offering will support content owners’ efforts to build comprehensive branded environments online.

Media companies around the world are embracing internet-based video portals as a key path to distribute their premium video, but building a world-class video portal is increasingly difficult and expensive. Joost will focus on this issue and provide the market with a cost-effective, end-to-end solution for media companies to publish video under their own brands.

As a part of this new direction, Joost will reorganize and restructure its business. A core team in New York and London will work on providing these solutions, as well as operating and supporting Joost.com and its associated video applications. Joost also will wind down operations in its Leiden development center.

Matt Zelesko, currently SVP of Engineering at Joost, will take over as CEO while continuing to lead the engineering organization. Stacey Seltzer, currently SVP of international business development and content acquisition at Joost, will run the business operations. Mike Volpi has stepped down as CEO of Joost but will remain actively involved as Chairman of the Board.

Joost plans to make its white label video platform commercially available to media companies around the world. This offering will provide a solution for companies looking to build a branded experience for their content on their own site as well as other sites and platforms in their distribution networks.

Time Warner did announce a set of principles for its “TV Everywhere” program, and if you’d like, you can read those at the bottom of this post. And Time Warner CEO Jeff Bewkes and Comcast CEO Brian Roberts did get into some philosophical/optical discussions with us reporters.

For instance, was the cable industry being “defensive” or “offensive” as it rolled out its authentication plan, which is supposed to give pay TV customers–but only pay TV customers–Web access to all the shows they get on TV? Offensive, declared Bewkes. He also decreed that authentication was a “free gift” to TV watchers.

But authentication is going to involve a whole lot of coordinated effort by a lot of different players, and that means details matter at least as much as philosophy.

For instance: Who else is joining Time Warner when Comcast rolls out its first authentication trial next month? Roberts wouldn’t talk about that–”today’s about Time Warner,” he said–but word is still leaking out. Scripps Networks, for instance, said today that it would play along. Here’s the statement from Lynne Costantini, who runs affiliates sales for the network.

“Scripps Networks’ media brands, such as Food Network and HGTV, enjoy a strong connection with a passionate base of consumers who likely would find value in this type of service. We are committed to providing viewers with content on the platforms on which they engage with our brands, in a manner that adds value to the viewing experience and enhances our current business relationships with distributors. Our participation in the Comcast authentication pilot will help us make some initial assessments regarding this innovative platform.

Also confirmed: Cablevision’s (CVC) Rainbow Media, which owns networks like AMC and Sundance. This one makes particular sense because Cablevision has been more vocal than other networks about not putting its programming on the Web without getting paid for it. I’m also told that A&E Television networks, co-owned by Hearst, Disney (DIS) and GE’s (GE) NBCU, is expected to participate, but haven’t heard back from those folks yet.

None of these buy-ins are huge moves by themselves, of course. They’re commitments for the trial only, and it’s unlikely that any of the companies are going to offer up their best shows at the start. For instance, I’d be (happily) surprised if AMC’s “Mad Men” makes the cut. And we’re likely to see a dribble of announcements over the rest of the year as more programmers dip their toes in and as competing/parallel authentication efforts that the likes of Time Warner Cable (TWC) and the telcos roll out.

In the meantime, in lieu of hard facts, here’s what Time Warner has to say about its intentions:

PRINCIPLES FOR TV EVERYWHERE MODEL
These principles were developed to ensure the TV Everywhere model is consumer-friendly; pro-competitive and non-exclusive.

•    Bring more TV content, more easily to more people across platforms.

•    Video subscribers can watch programming from their favorite TV networks online for no additional charge.

•    Video subscribers can access this content using any broadband connection.

•    Programmers should make their best and highest rated programming available online.

•    Both networks and video distributors should provide high quality, consumer-friendly sites for viewing broadband content with easy authentication.

•    A new process should be created to measure ratings for online viewing. The goal should be to extend the current viewer measurement system to include advertiser ratings for TV content viewed on all platforms.

•    TV Everywhere is open and non-exclusive; cable, satellite or telco video distributors can enter into similar agreements with other programmers.

The idea is to protect cable subscription revenues by giving pay TV customers–but only pay TV customers–Web access to all the shows they get on TV, and hoping this keeps them from canceling their subscriptions.

But that’s old news: Comcast (CMCSA) already told Bloomberg earlier this month that the two companies are linking up, and that Time Warner (TWX) would offer programming from some of its networks in the first part of Comcast’s tests.

Presumably Bewkes and Roberts will offer up a few more details, like which Time Warner networks are participating (good bet: TNT and/or TBS), along with a timetable. But I worry that the press conference will be light on details, in large part because many of the details haven’t been hammered out yet.

Still, I’ve been able to glean more from industry executives who’ve been involved in discussions with Time Warner, Comcast and other players in the authentication effort, which Bewkes has been calling “TV Everywhere” and Roberts has been calling “OnDemand Online.” Some of the details:

• The test will start very small–with some 5,000 subscribers–but Comcast is determined to expand it aggressively and wants to have it available throughout its system by the end of the year. Comcast plans to use its Fancast video portal as a hub for its efforts. And it  may use other digital assets it has acquired as well. Online Rolodex Plaxo, for instance, which the company bought last year, could be used to help subscribers sign in to watch their shows.
• The test is separate from Time Warner Cable’s (TWC) own authentication offering, which is essentially the same thing but will launch later than the Comcast test, using different technology, and will likely offer a different mix of programming.
• And those tests are separate from the one that telcos Verizon (VZ) and AT&T (T) have been working on with satellite operators Echostar (SATS) and DirecTV (DTV). That one also has the same thrust, but will take the longest to roll out.
• Comcast isn’t likely to announce other programming partners for the tests until later this month.
• Hulu is interested in playing along, because its owners–GE’s (GE) NBC, News Corp.’s (NWS) Fox and Disney’s (DIS) ABC–see authentication as a way to appease riled-up cable providers. The cable guys are upset that Hulu shows (some) cable programs for free while they have to pay for the right to air them. In theory, authentication solves that problem for Hulu because everyone will be on a level playing field: Only cable subscribers will get access to cable programming, whether it’s on Hulu, Fancast or anywhere else. But the cable guys aren’t rushing to let Hulu in just yet.
• Separately, NBC has been talking about offering some cable programming that isn’t already on Hulu for the tests. That could also be seen as an appeasement move, but I’ve heard a more benign suggestion: NBC merely wants to figure out if authentication technology works because it is considering using it for some of its coverage of the Vancouver Olympics next year.
• CBS (CBS), which isn’t a part of Hulu and which doesn’t have any cable assets of its own, would still like to get into the mix. The idea is that the network would offer the cable guys shows that it has kept offline until now (say, “The Mentalist”) while tying the Web programming to “retransmission” fees it would like to extract from the cable companies for all of its shows. Comcast executives seem amenable to the notion.
• Big cable players like Viacom (VIA) and Liberty’s (LINTA) Discovery may participate in some trials but not others. Viacom, for instance, has been talking about working with the telco group but not with Comcast during the trials. It has also discussed offering a “premium product”–like access to the full “Spongebob Squarepants” library or other kids’ shows that have a very limited online profile–to Time Warner Cable subscribers for an additional fee.

Bewkes and Roberts are scheduled to speak at the Time Warner Center at 9:45 am EDT, so we’ll know more shortly.

ComScore says Twitter logged 30.1 million search queries in May, more than Time Warner Cable (TWC), but not even on the same playing field as search also-rans like Ask.com.

But what if comScore is dramatically undercounting Twitter’s search–not just the standard undercounting that Web publishers always complain about, but something more significant?

It’s a given that comScore is undercounting. I know this because the research outfit told me so: The company confirmed today that it only measures searches executed at Twitter.com. But at least half of Twitter’s users are accessing the service without visiting the site, via third-party clients like Tweetdeck. And within that group of users is the power-user set, which is far more likely to be executing searches, many times a day in some cases, than Oprah fans who just joined the service last month.

So it’s easy enough to conclude that the majority of Twitter’s searches are going uncounted by comScore (SCOR). But how big is the gap? I’ve asked Twitter to share its search numbers, but I’m not holding my breath on that one. (UPDATE: See bottom of post)

In the meantime, let’s do some guesstimating.

Start with this year-old post by John Borthwick of Betaworks, who at the time was an investor in Summize, a Twitter search engine at the time (Twitter later bought Summize outright).

Borthwick reports seeing a huge number of search queries on Twitter on the opening day of Apple’s (AAPL) 2008 developer conference, topping out at an average of 190 queries per second. Tease that out over a full day, and you get 16.4 million searches in 24 hours.

For argument’s sake, let’s say that most of those searches occurred in an eight-hour stretch before, during and after Steve Jobs’s pronouncements that day, and knock that total down by two-thirds, to something like 5.5 million queries.

Steve Jobs pronouncements are rare things so it would be wrong to assume that Twitter sees similar usage patterns every day. But then again, Twitter has had an insane growth spurt in the last year: The most recent comScore traffic numbers peg monthly visitors at 32 million world-wide, up from a couple million a year ago.

See where this is going? Again, for argument’s sake, let’s say that Twitter’s peak traffic a year ago is now close to daily traffic today, and extrapolate that 5.5 million query guesstimate out for a month: You get something closer to 165 million queries.

Want to tweak any of my assumptions above? Be my guest. But no matter how you cut it, I’m sure that Twitter’s real search numbers are going to be several times higher than comScore’s number, at the very least.

Again, this matters in the end because Twitter’s most compelling investment thesis is that it can provide real-time search. And for that to mean something, the company is going to have to start registering as an actual search competitor at some point, not just to Time Warner Cable but to Yahoo (YHOO), Microsoft (MSFT) or even Google (GOOG). So how close, or far away, is that from happening?

UPDATE: Twitter cofounder Biz Stone responds, but declines to hand out any numbers. No surprise. I am a bit surprised to see him play down the importance of search at Twitter. I wonder if his investors are also surprised.

We don’t share absolute data such as total requests or queries per day but we do look at the whole ecosystem when we measure these things (not just Twitter.com).

Also, we are focused on the sharing and discovery of tweets so comparing Twitter to web search is interesting but not necessarily how we would measure success.

I’m pecking this out from the bowels of the New World Stage, where Day Two of the Twitter-centric 140 Character Conference is meandering along. But the most interesting Twitter-related news is coming from outside the conference: Data from comScore (SCOR) showing that Twitter-related search has become both measurable and meaningful.

Well, measurable, at least.

From Citigroup (C) analyst Mark Mahaney:

Twitter Becoming Meaningful–Search volume on Twitter in May was 30.1MM, (.001 percent U.S. market share), with 4.2MM searchers, and 39.4MM Result Pages, exceeding the 22.2MM searches conducted on Time Warner Cable.

Normally, we don’t even bother to dismiss companies that have less than one percent of U.S. search market. We never write about them, period. But given that Twitter boosters continually try to position the company as a real-time search engine–one that theoretically can threaten Google’s (GOOG) search monopoly, if you listen to some pitchmen, this may be the single most important metric to watch for the next few years.

It’s certainly more important than the number of Twitter followers of Oprah or even Twitter’s overall growth rate, which is going to spike up and down over the next few months as the media hop on-and-off the story (it’s back on again this week, with the Tehran protests, but we’re entering the dog days of summer, and us media folks have twitchy attention spans).

And it’s probably more important than any revenue Twitter generates over the next couple of years–the Twitter dudes have raised $55 million and have spent little of it, so they have time to create a business.

But if Twitter really is going to become an important player in search–or at least an attractive acquisition candidate for the likes of Google or Microsoft (MSFT)–it’s going to have to show a steady increase in search share.

And the nice thing about owning .001 percent of the market is that it gives you plenty of room to move up.

The announcement means that ESPN360.com, which lets you watch all sorts of live sports, whether or not the flagship ESPN channel is broadcasting them, will be available to 41 million homes “in time for college football season.” It’s already available via a host of ISPs, including AT&T (T), Verizon (VZ), but not, alas, Time Warner Cable (TWC), which has made it very hard for me to watch the UEFA Champions League games.

It’s worth noting that this is one of the reasons that ESPN wasn’t included in Disney’s Hulu deal. Cable providers pay huge fees to get access to the channel, and there’s no way Disney (DIS) is going to jeopardize that by letting people watch the same stuff for free on Hulu. But if the subs are already paying for it–the tab works about to be something like $3 per subscriber, whether they watch ESPN or not–then giving them online access as well seems to be OK.

Worth noting is that this arrangement–whereby subscribers to a particular ISP get access to online video, but the general public doesn’t–is exactly what both Comcast (CMCSA) and Time Warner (TWX) are talking about with their various “authentication” plans. The difference is a slight one: The content guys are proposing that their online video will be made available to cable subscribers instead of broadband subscribers, but it’s essentially the same thing. So if you’re wondering how that will work–the Comcast and Time Warner plans, which are supposed to roll out this year, will be trialed very, very slowly–take a look at ESPN360. If you can.

After factoring out one-time charges and write-offs, Bob Iger and company earned 43 cents a share on revenue of $8.1 billion. Wall Street had been looking for 40 cents and $8.15 billion, respectively.

Iger: “We had a difficult second quarter due to the weak economy and other factors.”

The bright spot for the entertainment conglomerate is the same one you see at every media giant these days: Disney’s cable business. Revenue at ESPN and the Disney Channel was up four percent and operating income was up five percent. That’s because those powerhouse channels have locked in payments from cable operators that show up regardless of the economy’s state.

And that’s why you won’t see (much) programming from those channels on Hulu–there’s no way Iger is going to rile up the cable operators who pay for that programming by running it for free online.

Disney’s interactive group, which includes videogames and sites like Club Penguin, but not revenue from ABC.com and sales from Apple’s (AAPL) iTunes store, saw revenue decline 17 percent, and operating income drop two percent.

Here’s the breakdown by segment (click to enlarge):

Write-down watch: Disney took $203 million in “impairment charges”–accountant-speak for “the stuff we bought back then isn’t worth much now.” That includes “$108 million related to radio FCC licenses and $46 million related to an investment in an Indian media company.”

This follows on the heels of a lousy February quarter in which the company didn’t hit expectations.

Disney (DIS) is the first of several big media companies to report this week. News Corp. (NWS) weighs in tomorrow, followed by CBS (CBS) on Thursday.

The Disney earnings call is starting now. I’ll listen in and update as warranted.

Disney CFO Tom Staggs on ad market, economy: “While we believe the pace of decline has generally stabilized, we believe ad buyers and consumers remain cautious.”

During Q&A, Iger has a long monologue about online philosophy, Hulu, etc., but my Webcast cut him off before he was finished. Don’t know whether to blame Disney or Time Warner Cable (TWC) for that one….

In any event, here’s my paraphrase of what I could get down, with a smattering of quotes:

“We found that as we move product to the Web…at least [with regard to] piracy that we’re aware of, there’s been a stabilization….We feel that if we don’t put it online…it will be demanded by consumers, and they’ll find ways.”

Research on cannibalization and piracy in general is inconclusive and some research conflicts with other research we’ve seen. “Some of this is instinct, by the way. It’s not all based on research.”

We feel media consumption is moving to the Web and that media consumption may be expanding. We think we’re better being online than not being online. We realize that Web monetization doesn’t exist yet, at least not at TV-like levels, but we believe that eventually it will.

A lot of the consumption that we’re seeing is incremental because it’s a different demographic. The average age of consumers watching ABC.com and itunes is younger than the average age of those watching network TV. The Hulu demographic is generally younger than prime-time network demographics. So we don’t believe it’s cannibalization.

The cable giant had planned on charging customers in four locations on a “consumption” plan in which they’d pay between $15 to $150 a month based on the amount of data they hoovered via the Web. But noisy opposition to the plan surfaced immediately and has been getting louder over the past few weeks.

Instead, the company says, it will spend time on “customer education” to clear up “misunderstandings” about the plan, which it still believes “may be the best pricing plan for consumers,” etc. Translation: We need more time to figure out how to do this without getting our heads ripped off. Or handing over customers to the competition.

That’s what was already happening in Rochester, where Time Warner’s plans were supposedly driving customers to Frontier Communications Co., which offered a (presumably slower) DSL service. From the Associated Press:

“‘We have gotten hundreds of calls from Time Warner customers into our call centers,’ said Ann Burr, the head of Frontier’s Rochester unit, in an interview with The Associated Press. ‘I guess it’s been a public relations crisis for Time Warner.’”

This doesn’t affect other pipe guys’ plans to institute similar caps or consumption-based pricing plans: Comcast (CMCSA), for instance, has a monthly cap on its broadband plans, and threatens to cut off customers who exceed it (thanks to Business Insider’s Dan Frommer for the fact-check).

And as of yesterday, at least, the cable guys’ trade group was pooh-poohing people who complained about the idea. Here’s Kyle McSlarrow, CEO of the National Cable & Telecommunications Association, on his group’s blog:

“Hundreds of billions of dollars have been and continue to be invested by our industry in the deployment of broadband and now the deployment of next generation broadband; speeds have doubled or tripled in just the last few years; new and spectacular applications keep getting launched; no anti-competitive conduct has remotely occurred; and, in fact, compared to many other industries, the Internet ecosystem seems to be one of the few really healthy, growing, and creative parts of our economy with continued investment and innovation taking place every day. At a time of economic and financial challenges for our country, I for one would rather Congress spend its time on real problems, not fictional ones.”

[UPDATE: McSlarrow just put out a new post discussing Time Warner's move.]

By the way: McSlarrow, Time Warner Cable, Comcast other pipe guys with similar plans, like AT&T (T), may not have a terrible idea. But they’re going to undergo a lot of public whippings before they get this one through.

NEW YORK–Time Warner Cable today announced it would alter plans to test Consumption Based Billing, shelving the trials while the customer education process continues.

Time Warner Cable Chief Executive Officer Glenn Britt said, “It is clear from the public response over the last two weeks that there is a great deal of misunderstanding about our plans to roll out additional tests on consumption based billing. As a result, we will not proceed with implementation of additional tests until further consultation with our customers and other interested parties, ensuring that community needs are being met. While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process.”

Time Warner Cable also announced that it is working to make measurement tools available as quickly as possible. These tools will help customers understand how much bandwidth they consume and aid in the dialog going forward.

Britt added, “We look forward to continuing to work with Senator Schumer, our customers and all of the other interested parties as the process moves forward, to ensure that informed decisions are made about the best way to continue to provide our customers with the level of service that they expect and deserve from Time Warner Cable.”

Massa says he will introduce a bill that will prevent Time Warner, along with other pipe providers like Comcast (CMCSA) and AT&T (T), from introducing usage “caps” on their Internet services. Wired.com:

“In a conference call with reporters Tuesday, Massa [described] TWC as a greedy, unregulated monopoly providing a utility service. His yet-to-be released bill would seek to increase competition among broadband providers and regulate monopolies, he said, though he declined to give specifics.

‘They are providing a utility and frankly you should not be able to impose cascading rate increases without justifying them,’ Massa said. ‘What Time Warner is saying is not true and their own SEC filings show that. This is AIG-style greed.’”

There’s no reason to think Massa’s bill will get any traction, at least until we hear from more established players in Congress who have more traction. But it continues to underscore the tricky task in front of the pipe guys: Now that they’ve trained customers to eat as much bandwidth as they want, it’s going to be hard to start charging by the byte.

Give Time Warner Cable credit for trying to tackle this by pitching the tiered offerings as a way for some customers to save money. In theory, some of its subscribers could see their bandwidth bills drop to $15 a month, the company says. But this is a PR battle that’s just starting up.

That instruction comes from Rep. Eric Massa, a Democrat who represents the Rochester area, and it’s aimed specifically at Time Warner Cable (TWC), which is starting to experiment with broadband “caps” in Massa’s hometown. Rabble-rousing quote: “Just at a time when access to information is driving our economic recovery, Time Warner is moving to stagnate the 21st Century technology needed to rebuild America.”

But any of the big Internet pipe players contemplating charging their users on a per-use basis–and most of them are–can expect to get similar blowback from lawmakers. It’s a no-brainer: Consumers now expect to be able to use as much data as they want. And the cable guys–or the phone guys, in the markets where AT&T (T) and Verizon (VZ) are offering Internet service–are easy political targets.

That’s a problem for the cable/phone guys, who want to use the caps to manage the boom in Web video. Their spin: They need the caps to make sure that power users who are consuming hours of movies, TV shows, etc., via their PCs shoulder an appropriate bill for the bandwidth they use. The cynics among us think the plan is designed to discourage people from ditching their cable TV service in favor of  Netflix (NFLX) on-demand, Hulu and TV downloads from Apple’s (AAPL) iTunes.

The cable guys are aware of the brewing backlash. At the industry’s annual convention last week, they were musing openly about better ways to sell their plans: Not as “caps” on use, for instance, but as “additional levels of service.” That’s going to take some awfully persuasive campaigning, and that’s not the kind of thing monopolists excel at.

But perhaps they can just use this “Simpsons” clip to make their case: