Inside the case of  the new James Bond Xbox 360 game that came out today is a special insert card that allows you to trial the Netflix streaming service for 48 hours. While the trial won't officially kick off until later in the month when the new Xbox 360 console upgrades roll out, this is the beginning of what is expected to be some massive marketing efforts by both Netflix and Microsoft for the new service. While this is the first game I have bought that has the trial offer included, I expect other games will offer it as well.

While we've seen a lot of discussion surrounding the technology and implementation of the new Netflix/Xbox service, we have not yet heard much about the type of marketing programs the two companies are going to team up on. While both companies spend a lot of money on marketing, in this case, they should be able to leverage each others distribution and wide reach to create some very compelling programs without having to spend tons of money.

With the new trial offer, Netflix is also going to be reaching a much younger demographic for the service than their typical subscriber to their DVD service. While it is too early to expect Netflix to offer a streaming only subscription service offering, over time, I would not be surprised to see Netflix offer a package for those users who only want to get movies via the Xbox 360, Roku, TiVo or some other device. It may take a year or two before we see such an offering, but eventually, Netflix is going to have to offer some kind of package for those that just want to get movies online.

I was going to do a review of the Windows Media 12 player and some of it's new features, but Peter Bright over at ARS already did a detailed write up and beat me to it. So if you are interested to seeing some of the new features of the player, head on over to the ARS website and also check out the comments section in the article. There are more than forty comments by readers talking about additional features and functionality they want the player to support.

It's been just over two year's now since Google acquired YouTube and while the debate rages on in the industry about how YouTube will make money, few people are discussing the quality problem Google continues to have with delivering YouTube videos. While we know the sheer volume of bits that Google is delivering for YouTube content is massive, you would think that by now they would have figured out how to do it without all the buffering, stuttering and terrible user experience.

And I'm not talking about the quality of the video in terms of the production value of how the video was shot. I'm talking about simply being able to deliver a video without having to wait 15, 20 or 30 seconds for it to start up. Most of the videos on YouTube are short-form and only a few minutes in length. Yet regularly, I have to wait 20-30 seconds for a clip to buffer, even though the clip itself might only be 30 seconds in length. And to make matters worse, for all the people that say "YouTube streaming", YouTube is not streaming. All YouTube content is delivered progressive download, via HTTP, and is not being delivered from a Flash Media Server (FMS). Delivering and scaling video via HTTP is much easier and cheaper than using a streaming media server and streaming protocol. So what's Google's excuse?

It's not as if I am the only one who has this problem. So many people do Google searches regarding the topic of YouTube buffering issues that a short little post I did on my blog a year and nine months ago entitled "Is Google Having Problems Delivering YouTube Videos?", continues to be the number one post on my blog in terms of traffic. As you can see from the comments with that post, this is a constant problem for YouTube viewers.

For all the talk of how YouTube is going to monetize publishers content or what ad model will work best, Google seems to be forgetting that none of those questions matter if you can't even deliver the content with reliability. With such a terrible reputation for video delivery, how does Google think YouTube will ever make money? Viewers only watch so much YouTube content and put up with the poor experience because the content is free and has no ads. Try getting someone to watch a video that takes 15 seconds to buffer and then delivers them an ad before the content. It won't happen.

While I don't know all the details surrounding how Google delivers YouTube content, I know that the vast majority of it is delivered by Google themselves, without the use of any content delivery network. Based on the size and scale of what Google is already delivering, it would make sense that done correctly, Google could deliver the video cheaper than a CDN could offer. But when does Google take into account the quality factor? Why don't they care about the user experience at a time when they are trying to figure out how to make money? YouTube is the quintessential example of how simply having tons of traffic and eyeballs does not guarantee you a business model or sustainable revenue. Quality also plays a role.

While I asked Google for details on why YouTube videos buffer so much and why video delivery is still such a problem, no one from Google would comment. The same way no one from Google ever comments when asked about their bandwidth or delivery costs. And why Google is under no obligation to say how much it costs to deliver YouTube videos, Google should feel an obligation to explain to their users why they have such a bad user experience. YouTube would be nothing without all the people who supported it and made their traffic go through the roof and as a result, enabled YouTube to get bought by Google in one of the worst deals, in my eyes, the online video industry has ever seen.

Last week I moderated a session at the Digital Publishing and Advertising Conference (DPAC) on the subject of video monetization and syndication strategies for publishers. We had a great mix of panelists represented with Matt Wasserlauf, CEO of Broadband Enterprises, Johnny Boston, President of Raw Digital and Lynn Bolger, EVP  at comScore.

While we discussed many topics including the best content approach for increased traffic and ad revenue and the many different advertising formats, the discussion was all about making money today from online video advertising. I asked for a quick show of hands in the room on how many attendees were content publishers, at which time more than fifty hands went up. I then asked, how many publishers are making enough money today from online video advertising to cover anything more than your distribution costs? With that question, the room fell silent and not a single hand out of the more than fifty went up.

And these weren't YouTube style publishers and independent video creators in the room. These were some of the largest online video publishers across many different industry verticals. After the panel, I spoke to many of them about their specific business challenges and what they needed in the market to be able to truly monetize their content. While answers varied, the number one complaint from all of them was that online video advertising still lacks targeting which keeps CPM rates lower than they would be if the right ad was being targted to the right user. I complained about that myself during the session saying it was bad enough I kept getting Gillette Venus women's razor commercials on MSNBC.com, but even worse was that MSNBC.com delivered me that same ad eight times in a row before I got a new ad.

While I keep hearing online video advertising networks and platforms say they do targeted advertising, non one seems to be using it and I question whether or not the technology even works. Major publishers aren't targeting ads to viewers even though it sounds like this is what they need to be able to charge a higher CPM and start to cover more than just their distribution costs. And until publishers can target the right ad to the right user, based on demographics, many publishers are going to have a hard time ever making money from their online video.

Before the end of this year, Roku will be releasing Netflix HD content to all Roku customers as a free, automatic upgrade. While exact details on the encoding bitrates are not known, Netflix HD content on the Roku should look better than Netflix HD on the Xbox since Roku will be using "advanced profiles" encoding.

Using advanced profiles encoding will allow Roku to deliver the same HD quality video, but at lower bitrates. This enables users who don't have high-end bandwidth to still be able to get HD quality video. While interlaced video content is typically de-interlaced before encoding with the Windows Media Video codec, advanced profiles supports compression of interlaced content without first converting it to progressive content. Microsoft says that maintaining interlacing in an encoded file is important if the content is ever rendered on an interlaced display, such as a television.

While I don't expect a lot of Netflix's inventory to be available in HD at the time of launch, giving all Roku users HD quality for free will definitely help Roku sell more boxes. In addition, last week, Roku announced that it had raised a third round of funding from Menlo Ventures. Even in today's poor economy, investors clearly still believe that Roku has a chance at making a dent in the market. With the list price of the Roku box being just $99 and Roku planning to open up their box soon to content other than Netflix, they have a good shot at getting some real market penetration.

This morning, I have been testing the new Netflix Mac streaming service that Netflix announced earlier in the week. The new watch now functionality, for Intel based Apple computers, uses the Silverlight 2 player and provides the same level of decent quality, from what I can tell, that current PC users of the watch now service get.

While Netflix won't say what bitrate the videos are being encoded in, the quality of the videos could use some improvement as any movie with quick pans, cuts or intense lightning, tends to produce some pixelation. (Click on the screen shot on the left for an example) That being said, the video quality for PC users using the watch now service is no different, so nothing experienced with the Mac offering seems to be any different than the PC one.

The Mac offering works just as well in Safari or Firefox and initially, Netflix says the availability of the new service will only be available to a small percentage of customers, with service being expanded to all users by the end of the year.

As for the user experience, the video playback and controls are nearly identical to watching and controlling Netflix content with the Roku. Jumping into any section in the movie gives you thumbnails with screen grabs of the scene and gives you a quick and easy way to see where you are in the movie. In addition, Netflix has added to the Mac and PC versions, a new set of arrow keys that allows you to jump back and forth between episodes in a series.

Overall, no real surprises with the Mac service as it's nearly identical to the PC version. But for us Mac users, this is a welcomed addition and one that we wish Netflix would have done sooner. My guess is that Netflix was waiting until Microsoft had the Silverlight 2 player out since it uses PlayReady DRM and content owners licensing their content to Netflix probably required them have to use some type of DRM technology.

It should come as no surprise to anyone that yesterday, in a 8-K filing with the SEC, Internap announced they would take a write down of "approximately $99.7 million" for the value of the CDN business Internap purchased from VitalStream for $217 million in 2007. While some have been speculating that the write off should have been closer to $200 million, Internap's CDN business does have some value and has to be assigned some sort of fair evaluation. With Internap reporting earnings next week, I expect we'll hear more on how they decided on the $99.7 million number and how they value their CDN business moving forward.

For Internap, it's been a really rough year for their content delivery business. With the write down now behind them and the uncertainty of what they may or may not do out of the way, hopefully this now closes the door on the VitalStream acquisition mess and allows Internap to move forward with their CDN offering. Next year is a clean slate for Internap's CDN business and if I were them, I would treat their CDN business as if it was a new startup in the market and completely re-align and re-brand their content delivery offerings.