According to the press release, “Brightline plans to publish original short and long form literary fiction and nonfiction, with its first titles expected to be released in mid 2013.” Atavist, which publishes e-singles in addition to licensing its technology platform, will also continue to publish independently.

Atavist is handling the technology but is also a large part of the venture — the ebooks will be published under the Atavist brand. (It’s unclear how print books will be handled or where they’ll be sold.) This summer, according to the New York Times, “Mr. Diller and Mr. Rudin discussed paying as much as $10 million for a controlling interest in Atavist. A partnership grew out of those discussions.” Through that partnership, “Atavist and Brightline will exchange an undetermined amount of minority equity interests in each other’s ventures, and IAC will provide $20 million in capital to build out Brightline as a publisher in addition to making investments in Atavist.”

“Publishing will change more in the next ten years than it has in the last hundred…” Diller said in a statement. “We have the resources and they have the ability, using Atavist’s technology and digital smarts, to play a continuing and significant role in that transformation.”

It’s unclear what kinds of authors Brightline is looking to sign up, though the NYT says it “will pay big advances to compete for big-name authors.” It’s also unclear if the ebooks will be available only through The Atavist’s website and apps or through other retailers like Amazon as well. And since The Atavist does not publish print books, it is unclear how and when those will be available. However, in both the press release and the NYT article, one thing seems clear: Barry Diller is willing to spend a lot of money on the venture.

Photo courtesy of Flickr / Jeff Howard

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For $12 a month, Aereo is promising New Yorkers access to a remote dime-sized antenna that will stream broadcast networks live over broadband across devices, along with storage space on a cloud-based DVR. The company is housing thousands of the HD-quality antennas in data centers. The company has raised $20.5 million and is slated to launch as an invitation-only service in New York March 14. Fox (NSDQ: NWS), Univision and PBS are already suing to stop it.

Diller is a summa-cum-laude graduate of the old school who in another life might well have been one of the execs lining up against the idea of a service that bypasses cable and satellite to deliver broadcast networks to consumers. Now he’s the one claiming broadcasters “forgot a longtime ago” how they got a free broadcast license in the first place. “They have the right to say where and when they want programming they own to be displayed,” he admits. But the man who created Fox contends they don’t have the right to insist on intermediaries they approve as the conduit to consumers. “I don’t think it’s on the side of settled law or on the side of the angels.”

When they ask for retransmission fees to allow Aereo to operate, Diller says he tells them, “When you get Radio Shack to pay you a slice of profit for selling an aerial, we’ll pay you.”

Diller argues that Aereo avoids legal issues others have faced by leasing the antenna to consumers, who then “control” it via devices they already own. A win in court — not the most likely of outcomes given how the courts have reacted so far to efforts to stream networks without agreements — doesn’t guarantee a business win. During the on-stage interview with CNN’s Ali Velshi, Diller enthused about the idea but added, “We don’t know yet. We don’t know anybody’s going to want to do this.”

(To which I’d add, even if enough people in NYC, where broadcast signals can be impossible to receive without third parties, pay to make it work financially in that market, there’s no guarantee it would be viable in other major cities. Those most likely to pay $12 a month for Aereo or something like it are already paying for cable or satellite and think they could save money by mixing broadband broadcast delivery with other offerings like Netflix (NSDQ: NFLX), Hulu Plus or ad-supported options.)

This is what Diller calls the essence of the internet: “Push a button and you publish to the world. so long as you have an idea, nothing between you and the consumer. That is a profound change of how media has been for the last 100 years.”

But he doesn’t use his own “button” — ie a Twitter feed. Diller says he regrets not starting with Twitter early on but thinks it’s too late now. That doesn’t stop him from being “very admiring” of Rupert Murdoch, who he sees using Twitter during a difficult time to get away from having his message managed and make his own voice heard.

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New York-based Aereo, which has received the bulk of its $25 million in funding from Barry Diller’s IAC (NSDQ: IACI), believes it has found a legal way to channel broadcast-network signals to its users without having to pay the same costly re-transmission fees cable, satellite and telco TV service providers do.

Since each subscriber will use his or her own dedicated dime-sized antenna, located at Aereo’s Brooklyn, N.Y., head end, to receive their signal, the company says it is not subject to the same retransmission responsibilities as say, Comcast (NSDQ: CMCSA) or DirecTV (NYSE: DTV).

Officials for representative body the National Association of Broadcasters have yet to issue a statement about Aereo. But speaking to reporters at a Manhattan press conference Tuesday, Aereo founder and CEO Chet Kanojia said, “We understand there will be challenges.”

Just within the last few years, broadcast networks including ABC (NYSE: DIS), CBS (NYSE: CBS), Fox (NSDQ: NWS) and NBC have begun demanding fees from cable, satellite and telco service providers to re-transmit their signals. With cable networks commanding millions of dollars to have their feeds carried, broadcasters successfully argued that it’s only fair that the networks running TV’s most popular content should be compensated for carriage, too.

These retransmission fees have quickly become vital pieces of the networks’ bottom line, with CBS expected to take in more than $250 million in retrans compensation this year. According to SNL Kagan, so-called retransmission consent fees are expected to total around $3.6 billion by 2017. That’s not quite the $9.3 billion in advertising revenue that broadcasters secured at last spring’s record upfront market, but it’s an increasing portion of the total revenue pie nonetheless.

Even with retransmission fees at that level, CBS Corp. president and CEO Les Moonves told investors last year that his company is “vastly underpaid,” given the huge audiences and big programming events found on CBS relative to even the biggest cable networks.

What’s more, broadcasters have a history of fighting disruptive technologies like Aereo. Just last year, for example, they won a U.S. District Court injunction against Ivi TV, which was also streaming the signals of broadcast stations without gaining consent or paying re-transmission fees.

The legality of Aereo, which provides its subscribers with the ability to record local broadcast signals on a virtual dual-tuner DVR for $12 a month, is unclear. (Aereo was formerly named Bamboom.) For example, last year the studios were able to stop Zediva from operating a streaming service that let subscribers access their own virtual DVD player. But on the other hand, Cablevision (NYSE: CVC) was able to defend its remote-storage DVR when it was challenged in court by a host of cable networks.

In fact, that appeals-court ruling – which said it doesn’t matter where a DVR is located, as long as its for personal subscriber use — could have special relevance for Aereo’s claims to legitimacy.

“Each RS-DVR playback transmission is made to a single subscriber using a single unique copy produced by that subscriber,” read a federal appeals court ruling. “We conclude that such transmissions are not performances ‘to the public,’ and therefore do not infringe any exclusive right of public performance.”

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The system works by creating an array of hundreds of thousands of tiny TV antennas the size of a thumbnail and housing them in one data center in a market. When users hook up to Aereo, they take command of an antenna, renting it to get local broadcast channels such as ABC, CBS, Fox and others. They also have access to a cloud-based dual tuner DVR that allows them to initially record up to 40 hours of content. Aereo is launching as an invitation-only service in the New York market and will be publicly available starting March 14 for $12 a month with a 30-day free trial.

This is “the beginning of a trend where consumers want to head, they want to have choice,” CEO Chet Kanojia, who founded advertising company Navic, which was sold to Microsoft. “We think the market is now ready, given the level of broadband penetration that exists and the amount of time people spend on digital technology, to start moving people toward the idea that there is an alternative emerging.”

Aereo also announced $20.5 million in new funding led by IAC , bringing its total to $25 million. Aereo’s system won’t provide cable content but should be able to give mobile users and cord-cutters easier access to TV, including live sports events. That is if it can survive legal challenges.

A similar streaming service called Ivi.tv was shut down by a judge a year ago after a challenge by 40 big broadcasters. Ivi.tv believed it could rebroadcast local TV feeds online as part of a loophole in the U.S. Copyright Act as long as it paid semi-annual fees to the U.S. Copyright Office. But a judge issued a preliminary injunction saying that Ivi was not a cable system as described in the Copyright Act and was therefore in violation of broadcasters’ copyrights.

The Aereo antenna

New York-based Aereo hopes to avoid that fate by leveraging copyright laws that allowed Cablevision to offer a network DVR service, which was controlled by one person. It also believes that by giving each user their own antenna and DVR to control, it can also bypass legal challenges. Essentially, it’s giving each user a private viewing session so there is no shared antenna or content at any given time.

That doesn’t mean that each user gets a dedicated antenna for the life of their account. Aereo can switch antennas between sessions to resolve radio frequency and other issues. It’s still very possible that broadcasters can oppose Aereo in court, but Kanojia said he believes it should withstand legal challenge.

“The key issue is the exhibition is private; media is never mingled, the DVR is never mingled, the antenna is never used by multiple people,” Kanojia said.

“You can think of each of those little antennas with a name on it,” IAC chairman Barry Diller said. “It’s entirely consistent with the basis of over the air broadcast. If you have an antenna, you can receive TV without an intermediary.”

Kanojia was cagey about how many antennas are actually in use in its Brooklyn center. But he said the antennas are organized into boxes the size of a dish washer, which can hold thousands of tiny antennas. A large market could take a hundred boxes to offer full service. Aereo users are not paying for content but are renting the antennas and paying for bandwidth, power and other costs. Aereo has leased its own fiber and created its own DVR product. Users will be able to access Aereo on iOS and Roku devices initially. The service will spread, starting March 14, to Android devices including the Kindle Fire through its HTML5-based app and will also be available on PC and Mac browsers. Aereo will use geo-locking to limit the signal to devices in the New York area.

Kanojia said Aereo will look at how the initial launch goes, but plans are in the works to scale up nationally if all goes well. The company has just about eight employees now, so it will take on a lot more workers to scale up, Kanojia said.

Ultimately, if live broadcast TV works for Aereo, it sounds like the company would be open to welcoming other content providers, even cable networks. Aereo would have to prove popular with consumers but as an open platform, it could accept content from all kinds of providers.

Aereo has a pretty cool take on bringing live TV to cord cutters and mobile users. It looks slick and the picture quality looks solid, ranging from SD to 720p, based on the network connection. I’m going to give it a try and see if it’s a compelling offering. It would be nice to get cable channels, and I’m not sure people will go for the idea of paying $12 a month for the ability to access live broadcast TV. But it will be an interesting test to see whether consumers and the courts will embrace this kind of cord-cutting offering.

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After less than a year as publisher, Ray Chelstowski was “relieved of his duties” today, as the NYT put it, citing unidentified sources. Also, Tom Weber, the managing editor, and Edward Felsenthal, the executive editor who has been with The Daily Beast since Tina Brown introduced the online-only title three years ago, both resigned.

Chelstowski has been credited with revitalizing Time (NYSE: TWX) Inc.’s Entertainment Weekly. But with so much turnover following the sale of Newsweek to the late Sidney Harman in September 2010 for $1 (plus $47 million in liabilities), advertisers and readers have continued to retreat from the magazine.

Chelstowski is being replaced by Eric Danetz, who is joining the magazine as SVP for sales from CBS (NYSE: CBS) Interactive.

Overall, IAC posted a pretty good Q3 two weeks ago. But the media segment, which contains Newsweek/Daily Beast, saw revenues drop 37 percent year-over-year. As the economy remains mired in uncertainty, and magazines, at best, are only holding their collective heads above water these days, Newsweek/Daily Beast is unlikely to do anything more than continue to try IAC’s and its shareholders’ degree of indulgence.

As the latest figures from the Publishers Information Bureau show, Newsweek’s ad pages were down 22 percent between January and September when compared with the same period the previous year. In contrast, its closest rival Time, posted a 4.2 percent increase during that same period.

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At its heart, Crowded Room, which is available for free on iOS and Android, is trying to help users meet new people. The key is that in addition to the traditional check-in, which can be integrated with Foursquare, Facebook and Twitter, it invites people to say where they might go later that day. Users can indicate they might go to any number of places, which can then prompt others to head out with them. But the bigger goal is to help connect people that might have a shared affinity for certain places and other common interests.

Connecting users by place and interests

After a user indicates where they might go to, they can hit a People tab and see the other users who are currently at or plan to go the places a user might go to. With a Suggested button, they can see the profiles of people that Crowded Room thinks has something in common with a user, which could be a similar interest in places, common friends or other things. Crowded Room gets smarter with its recommendations as it learns more about a user.

Users can also drill down with a Places tab to get recommendations about places to hit. And they can see a map that shows where people are headed later that day, kind of like a heat map of intent. Specific places will show who might go there later that day or who is currently there. All the Might Go check-ins expire after one day so every action only refers to sometime later on the same day.

One of the more intriguing ideas is a Shortlist feature, which allows any user to privately show interest in another user that they’d like to meet. If another user also puts the original person on their shortlist, Crowded Room will notify both parties. Crowded Room offers a messaging feature to reach out directly to another user. Or it can be used to chat up someone at a location, which can be used to get a conversation started or just to get some information about that specific place.

Helping users find their kind of people

This has some similar aspects to other location-based apps. I mentioned Ditto, which helps friends coordinate for future check-ins. There seems to be an element of Sonar, which alerts users who check into a location about other people who are connected to them at that location. And there’s some Foursquare in there with recommendations about places to go. But Crowded Room is trying to be different, said Michael Kestenbaum, CEO of Crowded Room, who was formerly vice president of mergers and acquisitions for IAC.

He said the app isn’t really meant to coordinate evening plans with friends, something GroupMe and other messaging apps can do. And it’s not simply about building connections around a current location. And it’s more than just dating, something IAC already tackles with Match.com. It’s about helping users meet interesting people out and about.

“Where you go and what you do says a lot about the people you want to meet,” said Kestenbaum. “Crowded Room helps you find your kind of people at your kind of place by using the best aspects of social media to help create connections in the real world.”

Users have broad privacy controls and can decide who sees each check-in. They can also indicate what kind of people, male or female, that they’re interested in meeting.

Will the ‘Might Go’ work?

I’m curious about how this will work. I can see young, hip city dwellers potentially using this to see what’s happening in their city. If enough people use it, it can give you a good sense of what’s hot and where people might be headed. Now whether enough people use it to meet others, that’s harder to tell. Some people are avid users of location-based services but they’re not eager to leverage location to meet people. Some might find it a little bit much, or potentially a back-door dating service.

But for people who are open to meeting others, this could be interesting. The Might Go check-ins are a way to generate a lot more signals about someone beyond where they actually go. The fact that you short-list someone opens up a low-risk way to connect with another person. But again, you have to have people avidly using this to make it work. I wonder how many people will use this consistently. If I was dating, yeah, I might, but I’m not so I’m not sure I would make that much of an effort.

Advertising opportunity

If Crowded Room can get people to show potential intent to go to places, this could also be a way for local businesses to advertise. If a person is interested in coming to my bar tonight, maybe a discount will seal the deal. And if you can see that people are interested in heading out to a certain kind of restaurant tonight, that might be an opportunity for a restaurant owner to target them with an offer. It’s too early to say how Crowded Room will make money, but this could be one way.

Either way, it’s another sign that companies are still very intent on innovating on the check-in. It’s still a very important signal and if location-based companies can show there’s value for a user in exposing their location or their future whereabouts, it’s another opportunity to provide services and potentially make some money too.

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Vimeo, an online video service that is part of New York-based IAC, has about 150,000 paying members, according to IAC chairman Barry Diller. He revealed the numbers during a conference call with Wall Street analysts following company’s earnings for the quarter ending September 30, 2011.

The one area that I think, one unit of ours, which is Video, is one that we think can have considerable growth. And it continues to grow subscribers. It continues to grow. I think we’re up to now — we’re up to 150,000 subscribers. when you think of that, for a subscriber business, that’s not bad. I mean, that speaks to the fact that this is a service that people like and will pay for.

IAC chief executive officer Gregory R. Blatt noted that Vimeo had 50 million unique users. I am guessing he meant 50 million unique users for the entire quarter, for according to comScore data, Vimeo had about 17.35 million unique viewers who watched 44.3 million videos. In comparison, YouTube had 160 million unique viewers during the month of September 2011 who watched 18.54 billion videos.The gulf between the two companies is pretty huge and Vimeo doesn’t register amongst the top ten video destinations, currently ranked at the number 13 spot by comScore. However, that gap didn’t stop Diller from taking a swipe at YouTube. He remarked:

We grow with unique users. We grow with the fact that this is a protected, high-quality service for video. There is no other on the Internet. I mean, YouTube does a fine job and has a huge audience, but has a grab bag of a whole lot of things. This is a place where you can protect your video, when you can expose it to either family and friends, or to millions and millions of people. It’s got great opportunities. And so I kind of call that one out. I don’t know if any of my colleagues have anything else to say in this area.

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The two were elected to the board last week; the company filed with the SEC Monday afternoon.

Clinton, 31, has McKinsey & Co., and Avenue Capital on her resume but currently is working towards an Oxford degree, for New York University and for the Clinton Foundation and Clinton Global Initiative; she’s on the board of the foundation.
De Rycker focuses on consumer internet and digital media investment, both of which are squarely in IAC’s wheelhouse.

No one is leaving the board, so Clinton and De Rycker push the total to 14. They’re also the only women — and the first women on the IAC board since Diller’s wife Diane von Furstenberg left in 2008. Her son Alexander von Furstenberg in on the b9oard, along with former Dow Jones (NSDQ: NWS) CEO Rich Zannino, Michael Eisner, Edgar Bronfman, Jr. and CEO Gregg Blatt.

Speaking of Dow Jones, this is nothing like Rupert Murdoch’s choice of opera singer Natalie Bancroft as the family rep who got the seat on the News Corp board as part of the sale. While Clinton’s connections run deeper than her experience, she has been in the financial world and speaks the language.

She’s also, of course, the only child of former U.S. President Bill Clinton and current Secretary of State Hillary Rodham Clinton. Diller’s ties to the Clintons are strong; Chelsea Clinton stood by her mother’s side when the former first lady was honored by the Diller-von Fursternberg Foundation earlier this year.

Clinton and De Ryker each will get an annual $50,000 retainer for being on the board plus an initial grant of stock options that vest over three years.

Update: Asked why these two were chosen, an IAC spokesperson:

‘Ms. Clinton is a keenly intelligent, insightful and inspirational young woman with experience in consulting and public policy, whose skills and background complement the existing areas of expertise of other board members.

Ms. De Rycker is a successful venture capitalist in the consumer internet companies and digital media sectors and her achievements and vast knowledge of this industry are valuable assets.’

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The in-app ad network offers an app wall that is built into the strip of tabs along the bottom of an app, allowing users to find other interesting apps to download. The app wall is meant to be a nonintrusive way for people to discover apps. Advertisers pay per install for every time a user downloads an app. But users are not incentivized to install an app, a key point of distinction because Apple banned the practice  of offering virtual goods or currency in return for downloads, because it apparently gamed the App Store ranking system.

The app walls are easy to install for publishers and are a simple way to add monetization to their apps. For advertisers, it’s designed to be a friendly way to drive downloads without pushing users with pop-up or display ads. And it gives them a better sense of their return on investment for securing users.

Blu Trumpet CEO Nina Sodhi, who was formerly COO at BumpTop before it was bought by Google, said she talked to IAC properties about what they were looking for, and many said they were interested in a good alternative to banner ads. Advertisers, she said, wanted more transparency and a way to push downloads:

People are getting bored with display advertising on mobile screens. It comes with a cost to real estate and then with user reaction. We do think what we need is a new presentation layer and performance based advertising. The math works out because it takes away a lot of the ambiguity around advertising.

Blu Trumpet has started with IAC apps like College Humor and Daily Beast, and it has already seen 1 million impressions. The install rate after people view the app wall is at about 10 percent. Sodhi said she is talking to Urban Spoon, Match.com and other IAC properties, but the goal is to be a provider for all apps. Working with IAC, however, has allowed Blu Trumpet to prove its concept on some big apps, and the advertiser queue is backlogged, Sodhi said.

But what incentive will users have to keep checking the app wall? Sodhi said consumers will hopefully be drawn to the idea of finding new apps. And she said Blu Trumpet will use an algorithm to surface more app suggestions that have been successful on specific apps. Blu Trumpet will also look at using the wall to remind users to reopen apps that they may have installed but have not used in a while to help boost engagement. Ultimately, Blu Trumpet is looking at expanding the wall to include books and videos, and it should be moving beyond iPhone apps to iPad and Android, said Sodhi.

The launch of Blu Trumpet will just be the first of many startups to come out of Hatch Labs, which is a joint venture with Xtreme Labs. The incubator has a couple of other projects that will emerge later this year and next year. App developers and publishers still want to push downloads and are looking for ways to gain app users without running into Apple’s ban. Blu Trumpet gets a head start by being part of IAC, but it will need to show that its early success can work for more publishers and advertisers.

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