Well, it seems the party has come to an end. The reality check is eerily reminiscent of the decline in attention for social news-reader applications. AppData.com statistics show a sharp decline in the number of daily active users of these services.

In my post yesterday, Facebook giveth & Facebook taketh: A curious case of video apps, I had pointed out that this was going to be a short-lived bump and the focus for apps cannot be on raw numbers but on retention and usage. That is, and will remain, the hard part of these apps. Finding sustainable growth is not an easy challenge.

As we have pointed out in the past, it is much easier to take and share photos (hence the popularity of Instagram) but capturing, editing and sharing videos is not as easy. Viddy, one of the social video creation and sharing apps, is betting that its roster of celebrity investors and friends would give the company a much needed jump start. Today, Justin Beiber signed up for Viddy and has been sharing his videos.

Socialcam, which had been injecting YouTube videos and sharing them through its player, is now going to have to find new and novel ways to share. The company made some changes today that are less spammy and address many of the issues I had brought up in my post yesterday.

Michael Seibel, CEO of Socialcam, in an email wrote:

1. When you auth the FB app instead of saying Ok, Watch Video it says allow or Go to App (Facebook default language.)
2. When you go to the Socialcam website there is a clear pop up explaining Social Mode.
3. There is an uninstall Socialcam link in the blue Facebook box below the video.
4. On Youtube videos Youtube branding is made extremely clear with Youtube approved logos.
5. Any Youtube video in related is also clearly branded.
6. Social Mode stay off when you switch browsers and/or log out.
7. If you turn Social Mode off on the app or the website it will reflect on the other (it doesn’t display correctly on the app – we are pushing a new version to address this – but it won’t push any Facebook actions.)

Now the hard part begins.

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In a proposed settlement filed on Friday in Brooklyn federal court, Metacafe said it would pay a maximum of $250 to consumers for reasonable expenses they incurred in trying to remove the cookies. The deal would also pay $400,000 to Kamber Law, the same firm that has racked up a series of other settlements related to Internet tracking, including a high-profile $9 million deal with Facebook over the social network’s ill-fated Beacon program that shared users’ purchase information.

The new settlement with Metacafe, which offers short clips of premium TV and movie content, is different from similar suits because it proposes a direct payment to consumers. Other recent lawsuits over online privacy breaches, including the Beacon settlement, have resulted in the defendant company paying for the cost of the lawsuit and donating additional money to third party foundations to conduct privacy research. These cases reflect the law’s ongoing struggle over how to put a dollar figure on an individual privacy violation.

Metacafe’s decision to pay $250 may not be what it seems, however. Before anyone who had the cookies installed on their browser can collect, they must:

submit a request for reimbursement for any out-of-pocket expenses or costs that they believe they incurred for a reason attributable to Metacafe that could not have been remedied by simply removing any HTTP cookie and/or LSOs associated with Metacafe and using readily available tools to do so.

The reality here is that individuals will have to jump through hoops to submit a claim in the first place and, even if they do, it is unclear how they will overcome Metacafe objections that they could have removed the cookies for free. This is because, shortly after the controversy over Flash super-cookies first erupted in 2010, Adobe (NSDQ: ADBE) provided consumers with a website with instructions for removing the cookies. Metacafe lawyers will likely refer to this website in an attempt to refute any claims.

A court must still approve the settlement but, if it does, it seems the only payouts will be the $7,500 set aside for a few representative plaintiffs and the bill from the Kamber law firm. This may suit the parties involved by keeping costs to Metacafe’s insurers relatively low and by adding another handsome payout to Kamber’s growing list of settlements over Flash cookies. But it is unclear what consumers stand to gain by the settlement — beyond, perhaps, increased awareness about the cookie problem.

A source familiar with Metacafe said the privately-owned company decided to settle because it does not have deep pockets for a large settlement and because it hoped the federal deal would shut down a similar suit in Arkansas, a state where procedural rules favor plaintiffs. The source also said that Metacafe used the super-cookies to make its site function more efficiently and not, like other defendants, to collect marketing information.

The Kamber law firm did not immediately return requests for comment.

The phenomenon of super-cookies is likely far from over. The Flash cookies episode is just one form of “history sniffing” in which companies use technology to overrides internet users’ efforts to stop them collecting data. Since the Flash controversy, more companies have been accused of installing other types of unremovable cookies. Recently, an Australian hacker provided evidence Facebook was using them to track users who logged out of the site.

Metacafe Cookie Settlement
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Most of what Hachenburg thinks will come to pass is pretty boring — YouTube will be the top video ad network, advertisers will realize young people aren’t watching TV, etc. — but somewhere along the line he comes up with this:

“Everyone’s talking about Hulu’s IPO next year, but I think the big news next year is that Hulu is going to abort its IPO. The reason it’s going to abort is that you have three networks that are all going to have different interests in mind, and you have Comcast entering the space. The likely outcome is Comcast is going to buy Hulu before the IPO happens.”

While we agree Hulu has a potentially complicated future ahead — and could, in fact, pass on an IPO — the suggestion that Comcast would purchase Hulu seems a bit problematic, for a number of reasons. For one thing, Comcast is fighting against regulatory scrutiny of its plan to merge its cable networks with NBC Universal.

Some critics of the deal have questioned the effect that a Comcast-NBC combination would have on the future of online video, and some have even suggested that certain restrictions are placed on Comcast before the deal is allowed to go through. That could include NBC having to give up its stake in Hulu, for instance, or requiring the new entity to ensure its content will be available online to competing pay TV operators. The last thing Comcast wants to do right now is rock the boat or appear to have too much of an interest in controlling the emerging online video ecosystem.

As for Hulu’s IPO: It’s clear the online video company has ambitions to go public, but those plans will be dependent in part on its ability to strike deals with its broadcast content partners, who just happen to also be its major stakeholders. According to reports, Hulu’s broadcast content deals end next year, so its independence will rely on locking down their content for some time. But as Hachenberg alludes, NBC, Fox and ABC all have differing opinions on the value of Hulu and their own plans for their content going forward.

Hulu has declined comment, with a spokesperson saying the company doesn’t talk about its capital plans. Comcast, meanwhile, couldn’t be reached. As for Hachenburg, we’ve reached out for more context for why he thinks Hulu will be acquired by Comcast, and will update this post when we hear back.

Updated: And here’s Hachenburg’s response for clarification:

“The core issue is that Hulu is first and foremost about free TV, while Comcast is the single largest advocate of pay TV – as illustrated by its commitment to its TV Everywhere initiative (Xfinity). With the NBC Universal acquisition, Comcast is now an owner of the leading free TV provider in the market. It’s hard to imagine that Comcast would have entered the Hulu joint venture at its inception, but this is now where they find themselves. So they’ll need an elegant solution – such as buying Hulu outright – to put the issue to bed.

Additionally, the reality is the three broadcast TV networks behind Hulu have been surprised by Hulu’s success and now face the prospect of being long-term partners with their rival networks. If Hulu become beholden to its public shareholders, the networks would lose much of their control – which has to be scary for them.

Of course, Hulu does have a single private investor, who most likely would like to see an exit path for Hulu. A Comcast buyout is a win-win-win.”

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Metacafe received 12.26 million people in July 2010, according to comScore. According to the press release, the inclusion of Go211′s traffic will increase that number to nearly 17.5 million.

This deal follows Metacafe’s recent launch of a vertical for movies as well as an expanded gaming section, indicating the site’s move towards editorially driven content with proven audiences and its move away from user-generated content — UGC content that it was offering payment for until May 2009.

According to the release, Go211.com will continue to operate as a distinct destination, and members of the Go211 team will join the site, including former Action Sports CEO Sean Aruda, who will become Metacafe’s Chief Revenue Officer. The site’s production team will not only bring more original content to Metacafe’s other video verticals, but will also contribute their expertise in live-streamed event coverage.

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Most of that growth comes from younger users, as 85 percent of males aged 18-24 and two-thirds of all respondents aged 18-34 said they watched online video weekly. As the behavior becomes even more mainstream, Magid estimates that the amount of time viewers spend watching video online will increase by about 5 percent over the next year.

There’s evidence that users are becoming more interested in viewing online video in the same way that they watch TV. About 38 percent of online video viewers say they are interested or very interested in connecting a computer to their TV to watch online video. And while short-form video still rules, whether it be user-generated clips, movie trailers or clips of TV or movie content, about 76 percent of those who watch video online say they are tuning in to professionally produced content regularly.

But online video viewers, for the most part, say their over-the-top video habit is not interfering with their normal TV watching. Only 14 percent of users said they watched less TV due to watching content online. About 72 percent said they watched the same amount of TV despite also watching video online — and another 10 percent said they watched more TV.

One of the big questions about online video is the consumer tolerance of online video ads, particularly as more ad dollars are entering the segment and video publishers seek to monetize their video assets. According to the survey, 48 percent of respondents said they found ads online to be as acceptable as those in TV shows — and 7 percent said online video ads were more acceptable.

Photo courtesy of (CC-BY-SA) Flickr user tnarik.

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Vevo Passes Hulu in Users, Finds Hispanic Niche; in five months, Vevo has surged, hitting 44 million unique users in April, according to comScore. (MediaWeek)

Metacafe Lands $5M for Curated Movie Site; online video sharing site Metacafe has secured $5 million of an expected $6 million in debt, options, warrants and securities, according to a filing with the SEC. (VentureBeat)

Adobe Tries Creeping Back Onto the iPad, With Help From Greystripe; the software company, along with mobile ad network Greystripe, says it will be creating ads in HTML5 that work on the iPhone and iPad’s Flash-free Safari browser. (MediaMemo)

CNN’s Skype Deal Broke UK TV Regulation; UK regulator Ofcom says Skype’s sponsorship of the Connector Of The Day segment in host Becky Anderson’s Connect The World show contravened rule 9.1 of the UK’s Broadcasting Code. (paidContent)

HTML5 Video Made Hackable By Handroll.tv; Serial entrepreneur Scott Rafer has unveiled Handroll.tv, an HTML5 video delivery platform that allows you to put any video file’s URL in and you’ll get an HTML5 embed code. (ReadWriteWeb)

Smartclip Launches New Multi-Screen Video Advertising Platform in Europe; the new video ad platform allows advertisers to use the same ad format on a number of devices, including PCs, smartphones, TVs and game consoles. (press release)

For the movies site, Metacafe poached talent from Netflix and Rotten Tomatoes to help build a store of curated movie content. Unique content that is available on the Metacafe Movies site includes a 3-D showcase, exclusive features like behind-the-scenes clips and restricted “redband” trailers. The movies section will also launch with an HD movie trailers section and a guide to blockbuster films expected this summer.

For Metacafe, part of the goal is to increase the movie marketing dollars that the site receives from Hollywood studios. The company has already grown advertising from movie-related content by 70 percent over the past year, and it hopes to accelerate that growth with even more focused content.

Film buffs are just the first group that Metacafe hopes to reel in with new editorial teams and exclusive content, with plans to launch a dedicated channel for video game content next.

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CNET reports that Microsoft is looking to transform Soapbox from a limp UGC free-for-all to a site where bloggers and citizen journalists can post videos relevant to categories like lifestyle, entertainment and finance, three areas Microsoft focuses on. But the future of the video site isn’t certain. Microsoft Vice President Erik Jorgensen told CNET, “We haven’t decided whether you just continue to support it or whether it is too expensive and out of our focus to do.”

YouTube continues to dominate the user-generated space, and has gobbled up such a huge chunk of the market that much of its early competition has thrown in the towel. Microsoft is just the latest in a string of competitors to scale back on or get out of the UGC game entirely. AOL stopped supporting user uploads last year. Last month, Crackle (formerly Grouper) cut off its user upload program and Metacafe killed its Producer Reward program. Both of those sites now have more of an emphasis on professionally produced content.

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Firefox 3.5 Makes Video More Like Web Pages; the browser’s user of open-source video standards open up new interactive possibilities. (TechCrunch)

Erin Gray to Be Casting Director for Hayden Black’s Cabonauts; former Buck Rogers star will bring the roster of celebrities she reps as part of her Heroes for Hire booking agency. (release)

Boomers Spending More Time Surfing Web than Watching TV; new research from Changewave finds the older set are spending 12.9 non-business hours each week surfing the web and 11.8 hours watching TV. (The Hollywood Reporter)

Is a TV “Family Hour” Dead? TV execs gather to discuss how DVRs and new technology platforms have made the idea of families gathering at one time to watch television a thing of the past. (The Wrap)

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Samsung, Bebo and Endemol Find their Beat; daily magazine style web series will feature live music, interviews with stars, music news and more. (Guardian)

Skyfire Comes Out of Beta; mobile browser provides full access to features on web sites including video sites like Hulu and YouTube. (VentureBeat)

Ooyala Launches Swift; white label company’s new video player has a smaller web footprint and features better bandwidth detection and a flexible, modular design. (Ooyala Swift FAQ)

Zensify Launches iPhone App; unites updates across your social graph including YouTube, Flickr and 12Seconds into one news feed. (Zensify)

GodTube Founder Buys TV Network; Chris Wyatt along with Dr. Robert Schuller acquires cable channel AmericanLife TV, plans to turn it into a “family values” network. (Broadcasting & Cable)

What does Sonia Sotomayor Mean for Show Business? The Hollywood Reporter looks at the Supreme Court nominee’s legal history and thinks that aside from some labor issues, she will be studio friendly. (The Hollywood Reporter)

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