Here are the basics of Facebook Home, which hopes to become the first stop on your mobile phone platform. Facebook Home works like this: as a layer built on top of the Android platform, Facebook essentially becomes your mobile device’s home screen providing notifications, status updates, and your feed (including large, in-your-face images) right up front. So what is it? an app? Is it an OS? We like to think it is first step to Facebook OS for the Mobile. [You can read all about it in Mark Zuckerberg’s own words.]

You can get Facebook Home baked right into the new HTC First which will be going for $99. Affordability and accessibility are two important factors for world domination, but the broader privacy implications for Facebook Home do give us cause for concern. Thank god there is no Home on iOS.

Apple’s China Syndrome: Apple loves China but China doesn’t feel that way, and its state-run media made it pretty obvious with its recent criticism of Apple. Of course, that meant CEO Tim Cook had to issue an apology to Chinese customers after being accused of “arrogance” and failing to provide the same quality of product and service befitted for other nations. Cook assured the country that Apple will work on “communication” surrounding these issues, which is said to be a good move forward for a country that could be its top purchaser in the coming years. We think Apple has to think different about China, because the dynamics of doing business are different in that country.

Video Killed the Radio Star? Not Really: Now we love our cord-cutting as much the next couch potato, but does the world need yet another video service that serves up the standard TV, movie, and music-consuming entertainment lineup? Well, apparently, Rdio thinks we do and announced Vdio. Yup, the company, after tussling with Spotify, is now going after Amazon Prime, Hulu Plus, and Apple’s iTunes.

There is one caveat: Vdio is limited (currently) to Rdio Unlimited subscribers in the U.S. and U.K., and offers shows and flicks from all the familiar places like ABC, NBC, CBS, Fox, and Comedy Central, among others. The good news is that more locations are expected soon. Rdio’s VP of Product Malthe Sigurdsson says a Rdio-meets-Netflix-like subscription service is still on the table, pay-per-view be dammed. Feeling like a movie night in but don’t know what to watch? No problem — Vdio lets you see what your friends are tuning in to, then allows you to rent or buy your selection on the spot. Just add popcorn.

Read a good book lately?: We are not sure why everyone keeps asking that question when they can easily check out our profile on Goodreads. The bookworms love the site and helped it become a powerhouse within the industry. So much so, that Amazon purchased the social network last week. Well, looks like this is going to help Amazon sell a lot more books on Kindle and give people a chance to keep talking about them — all the time. This collaboration of sorts makes sense. But don’t worry about your digital book club being “Amazon-ed” — if past experience with Zappos and IMDB is telling, it won’t be messing with a good thing. Though, we wouldn’t count out an increase in Amazon-fueled recommendations and opportunities to buy from the large-scale online retailer.

Sir, can you please spare a Bitcoin: We’ve been hearing a lot about Bitcoin recently, but what is it? Bitcoin acts as a peer-to-peer cash system that isn’t run by any banks or governments. The value you earn is off the grid, stored in mobile devices or computers, for example, and can be exchanged for real goods and services. It’s Kind of like using Facebook credits to buy gifts, except there’s no purchasing Bitcoins — it’s digital money that’s earned by solving complex computational problems. By the way, there are a bunch of guys in Tokyo who are the real dons of bitcoin. Bitcoin’s value is rising as it becomes an increasingly popular way to make and exchange currency, even being valued higher than actual currency in some countries. Will Bitcoins become the new international, border-free way to make payments? Our own David Meyer gives us a nice breakdown and answers the tough questions.

In a Blink, WebKit is dead: Or at least that is the working theory following Google’s announcement that it would be kicking WebKit, the engine powering its Chrome browser, to the curb for a forked version called “Blink.” Blink will make Chrome faster, lighter, more stable, and easier to develop for, Google argued. Google cited the current slow pace of innovation as the catalyst that spurred its decision to introduce a new rendering engine to the web, but it doesn’t come without its downsides — mainly that developers will need to test in more rendering environments, but the future of WebKit itself could be in danger. Google was its biggest supporter, so now it’s up to the likes of Apple, Samsung and BlackBerry to pick up the slack. Rob Isaac didn’t pull any punches is his must read editorial.  This can’t be good for Apple, who will now have to come up with its own twist on things. Let’s stay tuned for the next chapter.

Here are some stories you might have missed this week:

• I’m not the product, but I play one on the Internet. Interesting essay.
• The world’s favorite Italian analog notebook filed for an IPO. Surprised?
• HBO increases its cool geek cred: Game of Thrones is the most pirated show on television, and they take it as a compliment.
• America’s research libraries will soon be online.
• We celebrated the 40th birthday of the cell phone this week. Like a fine wine, it only gets better with age.
• April Fools’ Day went big this year, with more online and tech companies partaking in the shenannigans. Were you fooled by any pranks?

Read this and other in-depth articles on GigaOM’s Flipboard channel

That’s a notable change of tune from October 2011, when GigaOM first broke the story of Vdio’s existence. Back then, everything pointed to Vdio going into the video subscription business, and leaks in the following months hinted at plans to combine a Netflix-style subscription with transactional VOD. Those plans have seemingly been scrapped, and the new homepage describes the service the following way:

“A better way to watch. Rent or buy movies and TV shows worth tuning in to.”

Vdio’s homepage features a screenshot showing off some of its studio partners. Click to enlarge.

The accompanying screenshot shows popular movie and TV show titles like Prometheus, Breaking Bad, Ted, Monsters Inc., The Dictator, Family Guy, Pulp Fiction, Doctor Who, The Woman in Black, Real Steel and The Amazing Spider-Man.

Judging from these titles, Vdio has partnered with Disney, Fox, Sony Pictures, Universal Pictures, AMC, BBC America, Lionsgate, Paramount, CBS and DreamWorks Pictures – a pretty impressive list.

Just as noteworthy however is that Vdio is going to launch in the U.S. right away as well. Last year, the company said that it would initially only be available in the U.K.

The story behind Vdio’s delayed launch

Vdio’s team in December of 2011 at a restaurant in Slovenia, where some of the company’s engineers used to be located. Much of this staff was let go three months later.

Vdio has been a bit of an enigma ever since our first report about the company. The team behind it stealthily worked on the service since late 2009, and signs initially pointed towards a launch in early 2012. But in March, Vdio abruptly fired most of its engineering and design staff, including its CTO Justin Erenkrantz and a number of other people who had previously worked with Friis on the ill-fated video streaming service Joost.

I had a chance to briefly chat with Vdio CEO Ian Aaron about the upheaval a couple of months ago, and he told me that the company’s decision had a lot to do with the fact that Friis already had another media venture on his hands: Rdio, the music subscription service that is competing with Spotify and others, had already solved a lot of the problems that Vdio was working on. “We were literally reinventing the wheel,” said Aaron. That’s why the decision was made to share resources instead, he explained.

Vdio’s close alignment with Rdio

Aaron insisted at the time that despite those shared resources, Rdio and Vdio still remained separate companies – a line repeated by a Rdio spokesperson when my colleague Robert Andrews inquired about the two companies in September.

However, the relationship between Rdio and Vdio seems to grow closer by the day. Vdio’s website is hosted on Rdio’s servers, and the screenshot of the service prominently features the user name of Rdio’s VP of Product Malthe Sigurdsson. Vdio’s Terms of Service also reveal that users will be able to log into the service with their Rdio account. The two services apparently plan to offer users a way to use payment information provided for Rdio’s service to pay for movies bought on Vdio, and gift cards will work for either service. From Vdio’s Terms of Service:

“Unless otherwise specified or inapplicable, you will be able to use your Vdio Purchase Offerings on Rdio and your Rdio Purchase Offerings on the Vdio Service.”

Also interesting: Vdio’s Terms of Service now list Rdio’s address, and not its original Santa Monica office, as its principal business address. I wouldn’t be all too surprised if the two companies made their bond official once Vdio emerges out of private beta – but right now, it’s still unclear when that will be.

Photo courtesy of Flickr user jaaron.

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Upon launch, Netflix members from the UK and Ireland will be able to instantly watch a wide array of TV shows and movies right on their TVs via a range of consumer electronics devices capable of streaming from Netflix, as well as on PCs, Macs and mobile tablets and phones.

Further, crucial, details have yet to be announced — prices, catalog and so forth. But it will be interesting to see where this goes: not least because the road is likely to be a little bumpier than Netflix is used to.

Unlike the U.S, Canada and other American markets, where Netflix was able to move into a leading spot pretty much without impediment, it seems unlikely the company will not be able steamroller its way into a dominant position in the U.K. and Ireland without resistance.

There is one main rival, Lovefilm, which started off as a copycat DVD rental service but has been moving to online distribution as a way to insulate itself from this incursion. The company, which was bought out at the start of this year by Amazon for a rumored $200 million, boasts 1.5 million users and a library of 67,000 titles. While it doesn’t have the same punch as Netflix, it is entrenched to some degree.

YouTube could be considered a competitor, too, especially since it has started offering a film rental service. Most broadband and cable providers offer serious TV and movie-on-demand packages, too, which are easier for existing users to sign up to and operate than a third-party services.

And then there’s Vdio, the secret new video streaming service from the founders of Skype and Rdio, which GigaOM’s Janko Roettgers uncovered last week. That’s due to launch, and you can bet that the founders will have learned plenty from the failure of their previous video business, Joost.

There’s another player that cannot be ignored, too, in the form of the BBC’s iPlayer. That massively popular service is largely used by people to watch TV from publicly-funded channels, so in theory it is much more like Hulu than Netflix. But while it doesn’t focus on showing movies online, it does have a hidden influence on the market because it’s free, funded by Britain’s TV license fee. It’s possible to argue that it has severe downward pressure on the pricing of the market, and perhaps one reason why Lovefilm’s British user base is proportionally smaller than Netflix’s. Certainly it sets a standard that Netflix will need to match.

Still, reactions in my Twitter steam suggested that there is still plenty of space for Netflix to wedge itself into the market. Lovefilm clearly has some weaknesses, including the breadth of its catalog, the availability of its streaming services and its customer service. Here are just some of them:

• “This is great news. LoveFilm simply isn’t pushing aggressively enough here. We need competition in the UK to drive forward.” (@garethspence)
• “Assuming Netflix don’t have same issue, if it’s competitively priced I’d move for access to Universal Pictures films alone” (@andybee)
• “Welcome the competition, really – will hopefully improve things all round. Not loyal, @lovefilm cust service is atrocious.” (@jeremynicolas)
• “Absolutely loyal to Lovefilm, it was a UK venture after all. WIll be interesting to see how Netflix create their position…. Top 3 reasons to love lovefilm: 1) Ease of Use 2) Growing Watch Online portfolio 3) Pester free subscription” (@mattbambow)

Reed Hastings and his team will no doubt be taking note of that reaction and hoping they can provide a broad package that appeals to customers.

And they’ll certainly be looking for some good news to cheer up investors who have watched the last couple of months with confusion: customers confused by a price hike, then angered by it, before the business apologized and announced its plans to separate the DVD and streaming business… which it then backtracked on, unceremoniously killing the scheme before it was even born.

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Will the company have enough money to get the content it needs to take on Netflix? Or has Netflix already sealed the deal with an unsurmountable lead of more than 25 million subscribers?

Those are all very good questions. Here are some of my thoughts on them:

• Vdio is an international play, and that’s smart. Netflix has been aggressively expanding beyond the U.S., but most of its 25.5 million subscribers are still stateside. And most of Netflix’s deals are structured in a way that separates U.S. from foreign rights. So even if Netflix has tied up exclusive rights for shows like Mad Men in the U.S., it still has to compete for those very rights in other markets – and it may be unwilling to spend premium dollars for exclusivity in unproven markets.
• Starting in Europe is even smarter. Netflix and especially Hulu have had a hard time sealing the deal in Europe, which is part of the reason they went to Canada and Latin America (Netflix) and Japan (Hulu) first. Vdio starting off in the U.K. is a strong move, and it comes at a time where more and more Britons are getting used to paying for online subscriptions, thanks to Spotify. Which brings me to another point:
• With foreign markets, it’s all about timing. We have to wait for Netflix to post its Q3 results next week, but I’ve got a hunch that their growth in Latin America will be much slower than in Canada. Securing markets like Brazil and Mexico may be a good long-term bed for Netflix, but the company may have a tough time today selling subscriptions priced around $8 per month in countries where the average wage is still much lower than in the U.S. Europe on the other hand is ripe for a Netflix-like service, and Vdio may have a chance to claim a stake there before others pull up their tents.
• Legacy is weight. Vdio is of course not the only one trying to compete with Netflix, and some of rivals are much bigger that the upstart that wasn’t even on anyone’s radar before this week. Think of Amazon for example, or Dish. However, Dish is also a great example of how things can go wrong when you’ve got a legacy business to preserve while trying to compete with the forces that threaten it. Dish was rumored to have a Netflix competitor in the works, but only unveiled yet another pay TV subscription enhancement when it finally took the wraps of its online video service a few weeks ago.
• An exit may just be the beginning. It’s true, Netflix has likely a lot more money to spend on content than Vdio – even though Friis recently cashed out on Skype. However, who says that Vdio is built to become yet another publicly traded entity? It’s much more likely that the company will get acquired by a Google or Yahoo once it proves itself – and if the canceled Hulu sale has shown anything, then it’s that there are definitely many willing buyers for a video subscription service.

What do you think? Will Vdio be able to compete with Netflix? Let us know in the comments!

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The Vdio team also already took a first swipe at Netflix and the backlash it has been facing from consumers by saying that one of the differences between Vdio and Netflix will be that “people will love using Vdio.” Oh snap!

Read the entire Q&A below:

What is VDIO?
VDIO lets you instantly watch the best in TV and movies, right now.

How is it pronounced?
Vee-dee-o

Who is behind VDIO?
VDIO was founded by Janus Friis and is run by a team with experience from Skype, Napster, Microsoft, TV Guide, and Apache.

When will it launch?
VDIO is currently in closed beta.

How is VDIO funded?
VDIO is privately funded.

Where will VDIO be available?
Initially, VDIO will be available in the U.K.

Where is the company based?
VDIO has offices in Santa Monica and Europe.

How much does it cost?
The pricing will be announced at a later time.

How is it different from Netflix and LoveFilm?
We think people will love using VDIO.

Who is the team?
Ian Aaron – Chief Executive Officer
Justin Erenkrantz – Chief Technology Officer
Priidu Zilmer – Creative Director
Scott Barrow – Senior Vice President of Operations
Sander Striker – Senior Vice President of Engineering
Patrick Dodd – Senior Vice President of Global Licensing
Jessica Algazi – Senior Vice President of Business Affairs

What is VDIO’s relationship to Rdio?
VDIO and Rdio are run by separate teams.

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Skype’s founders have cofounder has apparently been quietly assembling an A-team of media and web technology experts to launch a site that seems destined to replicate the model behind their music subscription site Rdio in the video space. The new service called Vdio, which hasn’t publicly launch yet, has been kept secret for almost two years. Until now.

Here’s what I was able to uncover:

The mysterious Vdio.com

Vdio's website features a rotating display of high-profile movies and TV shows.

Vdio.com recently went live with a splash page that spotlights popular movies like The Dark Knight and Karate Kid as well as TV shows like Mad Men and The Tudors. The site comes with the slogan “Are You Watching?,” and invites users to log in via Facebook. However, visitors from the U.S. are being told that Vdio is “currently available in the U.K. only.” U.K. residents on the other hand learn that Vdio is “coming soon” to their country.

There’s no imprint, no link, no about page. Nothing tells you who is behind Vdio – with one exception: The Vdio logo comes with a small trademark symbol, and a search with the U.S. Patent and Trademark Office reveals that the mark was registered in the summer of 2009 by a company called Pulser Music Services, Inc. The very same company was also behind the launch of Rdio two years ago.

There’s little else to find online about Vdio. Just three people on Linkedin list it as their employee, and no one has ever written about it. The company does have a very sparse Facebook page, which claims it was founded in 2010 and features one single comment, left by a Los Angeles-based web designer:

Enter Project WBS

How did Vdio stay below the radar for so long? By operating under a different name, which I stumbled across when I searched for the European trademark for Vdio. Turns out that the Vdio name isn’t owned by Pulser Music Services in Europe, but by a U.S. company called Project WBS Inc., which was founded in December of 2009.

It doesn't get any stealthier than that: The Project WBS website, as it presents itself to outside visitors.

Project WBS raised some $5.6 million in funding in October of 2010, and amongst the people listed as directors in the SEC filing is Mark Dyne, an old buddy of Zennstrom and Friis who was already on the board of Skype and Joost and also instrumental in getting Rdio off the ground.

The same SEC filing also lists a few more very interesting names: Semion Smushkevich appears as the CEO of Project WBS. Smushkevich’s Linkedin profile shows that he works for Europlay Capital Advisors, which recently helped Friis and Zennstrom with the sale of Skype to Microsoft. Then there’s Joseph Miller, who is managing director of Europlay and also director of Project WBS. Also listed as director: Ian Aaron, whose past includes a stint as president of TV Guide.

And if you had any doubt that Project WBS is simply Vdio in disguise, consider this: A site-specific Google search reveals that a copy of Vdio’s website is available at staging.projectwbs.com.

The killer team behind Vdio

Meet Vdio's CTO: Former Apache Foundation President Justin Erenkrantz.

Other people on the Project WBS team include its CTO Justin Erenkrantz, who used to be President of the Apache Software Foundation until 2010 and also worked as Chief Architect for Joost, Zennstrom’s and Friis’ ill-fated fist foray into online video.

Erenkrantz is joined by his Joost and Apache Foundation buddy Sander Striker, who doesn’t currently list an employer on his Linkedin profile, but recently made some publicly viewable changes to the otherwise very stealthy Project WBS website.

Speaking of Linkedin: The social network lists around ten people currently employed by Project WBS, plus three folks who have owned up to their involvement with Vdio. The team includes a few more Joost alumni and open source / Apache geeks plus people who formerly worked for TV Guide, NBC and the music subscription incarnation of Napster.

There’s also the former leader of Skype’s visual design team, someone who did content acquisition for Netflix, and, just for good measure, a former systems engineer at NASA’s Jet Propulsion Laboratory who’s experienced in “data management and modeling, data analytics, and statistical analyses of large data sets, including data mining, visualization, and interpretation.” Most people are located in Los Angeles, but there also seems to be ties to the Netherlands, Slovenia and Estonia, where previously much of the Skype development used to happen.

What does all of that mean?

When will Vdio start, how exactly will it look like, and how dangerous will it be to Netflix? To be honest, I don’t know. But researching this extensively, I feel confident to make a few educated guesses:

• Vdio is currently being tested with a small group of users. How do I know that? That’s easy: Vdio’s Facebook app, which is necessary to sign into the service, currently lists “200 monthly active users.”
• This is all about subscriptions. Fris and Zennstrom wouldn’t align Vdio closely with Rdio if the offerings weren’t somewhat similar, and they wouldn’t secretly work on a project like this if it was just another VOD rental property. It’s possible that Vdio will offer some free content, just like Rdio does now, but the end game seems to be to compete with Netflix, and not iTunes.
• Vdio is an international play. The site may launch in the U.K. first, but the company is headquartered in the U.S., with a subsidiary in Luxemburg, and it already has a SVP of global licensing. I think it’s only a question of time before Vdio launches in the U.S. as well.
• This will get serious. One of the biggest lessons of Joost’s demise was that you won’t compete with the big boys if you don’t have the right content. Judging from the content that’s currently teased at Vdio.com, this could be different this time around. The movies and TV shows displayed on the site come from Warner Bros., AMC, Showtime, Sony and Fox. That’s an impressive list. Sure, Netflix has tied up the U.S. rights to shows like Mad Men, but that doesn’t mean that Vdio won’t be able to scoop them up elsewhere.
• The timing couldn’t be better. Netflix has been in a crisis ever since its botched attempt to separate its DVD and streaming business, and Hulu’s future seems more uncertain than ever after a proposed sale of the company didn’t go through. Many wouldn’t have given a newcomer like Vdio a chance just six months ago. But now, everything seems up for grabs.

Update 2 (10/18/2011): We’ve been told by a spokesperson for Niklas Zennstrom’s VC company Atomico that Zennstrom isn’t actually involved in Vdio. We’ve corrected the article to reflect this information.

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