Lower than expected television sales in the latest quarter partly reflect that consumers are no longer tethered to their home TVs for all but big, live sporting and other events.

Although the number of US online video  viewers continues to grow steadily, up a more modest 8% in 2010, more than three-quarters of them routinely watch video on connected devices, according to eMarketer. More than one-third of online adults in the US, or nearly 60 million people, routinely watch full-length television shows online.

While mobile video is rapidly growing from a smaller base, 40% of the US population will rely on some kind of mobile Internet device by 2013, and advertisers will be sure to follow, eMarketer predicts.

Seeing evidence of these trends on a consumer electronics giant’s balance sheet could be the first convincing indicator that mass audiences are settling to view video on virtually any size screen in exchange for convenience  and lower cost  –  especially during a painfully slow economic recovery.

“Consumer spending has been episodic and (it) appears that our customers are operating on cues from the broader environment,”  Best Buy CEO Brian Dunn said on a conference call with analysts. today.

Although Best Buy cited a number of one-time negative earnings factors, it reported a low-single digit comparable-store sales decline in televisions during the first quarter as well as weakness in other discretionary sales of video gaming, music and movies.

By comparison, the sale of high definition and 3D TV screens for the home  continue unabated as do  wildly popular Apple and other mobile connected devices. Apple’s new Mac Mimi is suspected by many to be a precursor to a new portable compact Apple TV.  If it ever takes off, a new iteration of Apple’s iTV could represent the first pass at what the Yankee Group calls “TV service without the content,” catering to consumers already watching less video on TV than they do online. “Connected devices with prepaid data plans such as Apple iPad allow consumers to be Anywhere without tying themselves to a monthly payment,” a new Yankee report observes.

eMarketer estimates the highest penetration of online video viewing is among 18- to 24-year-olds, with 25- to 34-year-olds and teens not far behind. By the middle of this decade, those age groups will collectively represent more than  90% penetration, with the ability to dramatically alter consumption patterns. Even now,  29% of consumers under 25 get all or most of their TV online, compared with 8% of the overall video viewing population, according to Retrevo.

More than half of today’s mobile video audience (about 55%) is adults ages 25 to 49, according to Nielsen latest Three Screen report. So, it is not surprising that video-on-the-go has prompted the likes of Starbucks and McDonald to compete with free Wi-Fi service that lures consumers to sit and browse free online music, videos and local information.

Walt Disney CEO Bob Iger, who has steadily and smartly advanced its global franchises into the mobile space, explained at a Financial Time conference Monday, “We didn’t want to be marginalized. We have to be where the fish are.”

That seems like ike sound advice for all media, entertainment businesses and retailers including Best Buy.

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Its new video chat (FaceTime)  sleekness aside, Apple’s latest mobile icon was immediately compared to Google’s Android operating system-based flagship phones on the market less than one year. While iPhone 4, available  this summer, represents Apple’s best efforts, “it won’t stop Google…and it doesn’t address some of Android’s new strengths that are becoming weaknesses for Apple,” exclaimed Silicon Alley Business Insider’s Dan Frommer within minutes of the unveiling at Apple’s annual world developers’ conference in San Francisco.

Despite the support of new apps from Netflix, Activision and Zynga along with bells and whistles ranging from an integrated inbox and a seven-hour battery to a $199 starting price, many earlier reviews were fixed on what iPhone 4 did not include.  There was no attempt to match Android’s “cloud” functionality including the zapping of web pages and maps between the Google phones and computer browsers. While Apple just made the iPhone better, it didn’t make Google’s Android phones worse, Frommer and other experts insist.

Jobs and company could partly blame such creeping disdain on Apple joining the elite ranks of large cap players whose shortfalls are magnified and whose achievements are never enough. Just ask General Electric and Google, each with around a $170 billion market cap , which have long been moving targets for frequent volatility in the stock market and on the technology front. Apple’s nearly $235 billion market cap, even in a down market,  recently surpassed Microsoft, to which Jobs quipped “it doesn’t really mean anything.”

Oh, but it does.

Obsessing over and delivering on high-powered design and functionality just isn’t enough anymore. Apple’s dazzling new iPad has already inspired a generation of like competitors. Still, Apple’s iBooks already has snared 22% of the exploding eBook market dominated by Amazon’s Kindle. Apple’s new iAds platform, going live July 1 with $60 million in marketing commitments, could jump-start mobile advertising – if Google doesn’t  leap frog from its Internet ad pearch. Jobs predicts iAds will grab nearly half of the 2010 mobile advertising market — a claim that was immediately challenged by Admob, Google’s dominant mobile ad network.

US mobile Web advertising is expected to reach $3.8 billion this year, according to JP Morgan analyst Imran Khan, which is well below his forecast of nearly $25 billion, a majority of which is spent on text messaging. Morgan Stanley analyst Mary Meeker predicts mobile Web users will outpace desktop Internet users within five years. The yawning gap between the consumer time and advertiser dollars spent on mobile connected devices represents a $50 billion opportunity,  superceding the actual sales of iPhones and Android-powered devices.

iPhone 4’s new video chat promises to unleash a flood of instant personalized marketing and e-commerce transactions, bound by social networking, as soon as Madison Avenue catches up to what could prove a major catalyst for e-marketing. Today’s 233 million domestic mobile phone users (according to comScore), about one-third of which will embrace smart phones by 2011, represent the same reach as television — making it them these devices the new mass medium.

If non-traditional ad platforms such as apps and local targeting play a major role in shaping mobile advertising, as Khan suggests, a fight to the death between Apple and Google could ensue, shutting out more conventional big media. And there will be plenty of large market scorn to go around.

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Silicon Alley Investor speculates CEO Tim Armstrong is maneuvering to sell AOL to Microsoft rather than merely secure a new outsourced search deal with Google as publicly advertised.

Armstrong danced around the issue at this week’s All Things Digital D8 conference.

AOL’s eventual roll up into some larger entity has been widely expected since it was jettisoned by Time Warner last year. That’s the same Time Warner former AOL CEO Steve Case merged with a decade ago in a deal that subsequently destroyed more than $200 billion in value.

Despite Armstrong’s slick peddling of niche news verticals and an advertising revival, AOL’s solo flight has a short-lived feel. At a time when rival portals such as Yahoo and MSN also are scrambling to reinvent themselves, AOL’s diminished share of users and ad dollars blunts its ability to compete.

In fact, a potential three-way alliance with AOL, Microsoft and Yahoo has been lurking since Yahoo’s former founding CEO Jerry Yang infamously rejected  Microsoft’s $31 a share buyout offer. Shortly afterward, Yahoo came close to merging with AOL. In the end, Microsoft benefits most from the search both AOL and Yahoo provide in its battle with Google.

The overlapping sales and other operating synergies that would yield healthy cost cuts  and swift integration are an impetus for Microsoft to pay between $2 billion and $3 billion for AOL before the expiration later this year of its search contract with  Google. It is uncertain how much of AOL’s sprawling content operations would  survive such a union.

AOL’s slow financial burn could dilute the price. AOL reported a 58%  decline in its most recent quarterly earnings and continued deterioration of its high margin subscription and search revenues which are hammering its free cash  flow. It continues unloading non core assets such as instant messaging service ICQ and social network Bebo, although Armstrong has warned AOL’s future financial performance will likely be worse than expected. AOL’s revolving door management also could have a destabilizing impact.

But some kind of AOL deal seems inevitable. The entreprenurial Armstrong, formerly president of Google’s North and South American operations, could cash out to reinvent in another roll up target heading into what could be a time of rampant Internet consolidation. But there will never be another AOL — thank goodness.

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Of the 19 featured speakers at All Things Digital’s celebrated D8 conference this week, only one is a woman – NPR President and CEO Vivian Schiller.

If you count  Kara Swisher, who co-hosts the west coast gathering of media elite with Wall Street Journal tech guru Walt Mossberg, then two women share the D8 main stage.

Certainly Apple CEO Steve Jobs, Microsoft CEO Steve Ballmer, Facebook CEO Mark Zuckerberg and the other speakers are marquis choices who have earned the spotlight and get plenty of it. But the stack of artistic mug shots on the D8 website makes you wonder where are all the women?

Last year’s D7 conference included Yahoo CEO Carol Bartz and Huffington Post CEO Arianna Huffington — two accomplished, outspoken trailblazers who are used to holding down the fort alone. In November, Arianna and me were among a handful of women presenting at the Monaco Media Forum. Given the conference’s forward-looking agenda, I expected there to be more.

In an era of boundless entrepreneurial opportunity flooding the marketplace with talent, we should be moving beyond gender tally.  Sadly, we are not. Women becoming a simple majority in the work force and claiming a record two of the CEO jobs at Fortune 500 companies are artificial thresholds offering no guarantees.

If the argument is that relatively few women have risen high enough in corporate ranks to be considered headliners, it begs the question why?

If the argument is that featured conference speakers are a product of random selection, the question is why the sheer numbers game fails to work in their favor?

Don’t get me wrong; I am not a raving feminist.  I have happily worked with and for men, and two of my four children are sons. But as a media specialist who has outlasted (call it dogged persistence) most male and female journalists and analysts in this field, I expect to see and hear from more women taking the lead, moving markets and inspiring because I know they can. I mentor my daughters and other young women to do no less.

Surely the world is no better off for not having more women in positions of power and influence.

So, it behooves conference planners and hosts to think outside their comfort zones of friendly industry contacts and reach beyond the buddy system  to consciously showcase female executives and experts who can lend their unique voices and passions to the tattered front line conversation.

I’m just putting this out there…and I’m sure you will let me know what you think.

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Don’t be surprised if at least one of the Big 4 broadcast networks is sold or dismantled in the next 24 months.

They are failing business models whose brand value is meaningful mostly to strained local TV station affiliates, many of whom are also fighting to survive.

TV tethered broadcasting has been reduced to one of the least financially viable media options in the digital age. The once dominant Big 4 TV networks remain advertising dependent even as they continue losing  an average annual 6.5 percent of audience. Consumers of all ages increasingly bypass appointment television to view video on mobile Internet devices whenever they want.

On Wednesday, Walt Disney Co. denied reports it is in advanced discussions to sell its ABC TV Network to private equity investors. The insight came from a corporate communications secretary arrested by the FBI and securities regulators for trying to sell insider information to investors.

Analysts estimate the ABC TV Network is valued at upwards of $5 billion. Disney Chairman and CEO Bob Iger, who rose through the ABC TV station and network ranks, has not ruled out a possible sale.  Disney’s more than $7 billion in annual earnings is mostly dependent on its cable networks and the ESPN franchise. All of its broadcasting assets contribute only $600 million, according to analysts.

While the ABC insider scheme is strange, the notion of Big 4 media owners shedding their outdated, dead-weight broadcast TV network businesses is not.

As evidenced in the most recently reported quarter, the broadcast networks and even their historically lucrative owned TV stations are a drag on overall media company earnings and, at best, marginally profitable. The NBC and Fox networks are expected to post losses this year.

I have predicted since late last year that Comcast, the leading domestic cable operator, cannot economically justify its creeping takeover of NBC Universal without eliminating or radically altering the struggling NBC TV network business. Comcast has proposed taking a controlling 51% stake in NBCU for $6 billion with plans to acquire General Electric’s remaining ownership stake over time.

Media conglomerates have been hedging their bets against broadcasting for years by buying and developing general interest and niche cable networks that have become profit centers, generating more than half of all earnings. Ad-supported cable networks collectively thrive on $25 billion in annual affiliate fees, or double national broadcast advertising revenues, according to Barclay’s Capital analyst Anthony DiClemente.

Meanwhile, ABC, NBC, CBS and Fox are clawing their way back from a 20 percent decline in upfront advertising during last year’s recession without hope of  resuming substantive organic growth in a fragmented media market. Efforts to build an online pay wall around network TV programs on Hulu.com and TV.com have failed. Even online, the broadcast TV networks lack the interactive magic to play in digital media’s social and e-commerce sweet spots.

The demise of the Big four TV networks is a delicate matter for media giants who still must answer to advertisers and station affiliates bound by the system for more than half a century. Despite Comcast executives’ stated intentions to preserve the business, they have a clean break and financial imperative to innovatively reshape NBCU’s content parts, making NBC TV’s radical change or sale inevitable.

Potential buyers for the NBC TV network and its 10 owned TV stations (in the top 25 markets) could include major NBC affiliated television groups owners such as Hearst, Gannett, Belo, and E.W. Scripps. The NBC TV Network and its owned TV stations are valued at about $6 billion of the NBC Universal’s overall $35 billion value, according to analysts.

Comcast also could convert parts of NBC TV into one or more cable networks supported by both subscriber and advertiser dollars, leaving a less costly broadcast hub of news, live events and sports to interface with TV stations.

Broadcasting is only 15 percent of NBCU’s profit mix even though it generates 36 percent of the company’s overall revenues, according to Bernstein Research. It underscores broadcaster networks’ costly programming and operating costs compared to Internet  rivals..NBC, ABC, CBS and Fox each spend between $2 billion and $3 billion annually on program production. Less than 90 percent of newly produced prime time series survive to a second season.

It is why ABC, CBS, NBC and Fox  have been rifling their owned and affiliated TV station retransmission fees in a short-term revenue generating tactic. But even that option will be challenged as cable operators come under their own financial pressures from new digital distributors.

That makes a smaller pure-play media players such as CBS, to whom the broadcast network is central, a potential acquisition target. The overall risk is that as broadcast TV network valuations plummet, so will the value of their big media owners..

Needham analyst Laura Martin estimates $160 billion in advertising spending and more than $800 billion in corporate enterprise value are at stake for media players as values shift from traditional media to online, mobile and social media.

As it is, the Big 4 network owners have held on too long to ever fully recoup.

Image via CrunchBase

There is so much more to the digital revolution than is reflected in daily headlines and cyber chat. Leveling the playing field for elementary education is at the top of the list as a way to improve the quality of life by giving all children the rudimentary reading, writing and math skills they need to thrive.

The relative low cost of manufacturing and distributing mobile teaching devices could raise the educational bar for children everywhere in the world. MIT Media Laboratory co-founder Nicholas Negroponte understood this when he launched the One Laptop Per Child program to provide solar-powered $100 laptops free to children everywhere.

It’s up to parents and educators to keep real-deal books, pencils and paper in the forefront, to cultivate the love of books and writing that so many of us enjoy. But you can hardly deny the overwhelming draw and influence of interactive devices .

Increasingly schools and teachers are finding more effective and cost efficient ways to use mobile tech to their educational advantage with computing  programs such as TeachMate. A new Fast Company article explores scholastic connectedness for the greater good:

Gemma and Eliana belong to a generation that has never known a world without ubiquitous hand held and networked technology. American children now spend 7.5 hours a day absorbing and creating media — as much time as they spend in school. Even more remarkably, they multitask across screens to cram 11 hours of content into those 7.5 hours. More and more of these activities are happening on smartphones equipped with audio, video, SMS, and hundreds of thousands of apps.

The new connectedness isn&apos;t just for the rich. Mobile adoption is happening faster worldwide than that of color TV a half-century ago. Mobile-phone subscribers are expected to hit 5 billion during 2010; more than 2 billion of those live in developing countries, with the fastest growth in Africa. Mobile broadband is forecast to top access from desktop computers within five years.

As with television, many people are wondering about the new technology&apos;s effect on children. “The TV set was pretty much a damned medium back in the &apos;60s,” says Gary Knell, CEO of Sesame Workshop. But where others railed against the “vast wasteland,” Sesame Street founders Joan Ganz Cooney and Lloyd Morrisett saw a new kind of teacher. “They said, Why don&apos;t we use it to teach kids letters and numbers and get them ready for school?” Sesame Street, from its 1969 debut, changed the prevailing mind-set about a new technology&apos;s potential. With its diverse cast and stoop-side urban setting, the show was aimed especially at giving poor kids a head start on education.

Today, handheld and networked devices are at the same turning point, with an important difference: They are tools for expression and connection, not just passive absorption. “You put a kid in front of a TV, they veg out,” says Andrew Shalit, creator of the First Words app and father of a toddler son. “With an iPhone app, the opposite is true. They&apos;re figuring out puzzles, moving things around using fine motor skills. What we try to do with the game is create a very simple universe with simple rules that kids can explore.”

via A Is for App: How Smartphones, Handheld Computers Sparked an Educational Revolution.

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And you thought March Madness was just about the best of college basketball.

Fast Company points out there is money for many in the NCAA tournament that has everyone buzzing — from websites like NCAA.com and CBSsports.com to the cities hosting the games.

According to WSJ.com, more people are viewing streaming video of the games. The opening day of the tournament drew 3 million unique visitors to March Madness OnDemand, or about 11 percent more than 2009.

This year’s take for CBS especially will be greater since it is charging twice as much as ($10) than in 2009 for its March Madness iTunes app, which is second only to the top selling MLB app. Looks like sports is giving music downloads a run for the money.

Check out the cool graphic at the Fast Company link below.

Slam Dunk: The Financial Impact of March Madness | The Upswing | Fast Company.

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The economic and more recent currency-related problems abroad are a big deal for media and any company seeking to participate in e-commerce, new paid content models and other boundless opportunities spurred by digital interactivity.

Global consumers and businesses must emerge from the recession free enough of debt and savvy enough about digital technology to invest and take risks. The Internet, while functional and fun, is far from realizing its full potential.

The paradigm shifts involving content creation and economics, marketing and commerce, mobile connectivity and personal relevance cannot occur in a vacuum. They rely on a financially healthy world willing to innovate against changing consumer behavior. As The Sunday New York Times reports, that fertile ground needed for growth is quick sand:

Greece’s problems, and those looming over its neighbors, have laid bare the dangers of divergent fiscal and political policies in the euro zone, calling into question the grand European experiment of squeezing 16 disparate countries into a monetary union.

via Is Greece’s Debt Trashing the Euro? – NYTimes.com.

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So much of the initial commentary and review of Apple’s new iPad has been focused on whether it will obliterate other multifunctional or more simple stand-alone devices. The conversation should be about how conventional businesses such as media and advertising will adapt to all of their digital options to connect with interactive consumers.

That’s the challenge.

Apple CEO Steve Jobs has just given us another way to traverse the digital transformation.  It would be a shame if by May 2010, when the iPad has been in distribution for a month, more consumers than businesses were responding to the challenge. At a price point that ranges from $499 to $830, there will be plenty of takers even in a painfully slow economic recovery. Initial forecasts call for the sale of anywhere from one million to five million iPads the first year and the sale of nearly 30 million Apple’s iPhones.

The ecosystem that engulfs Apple’s devices, distribution platform and faithful now include iBooks, iTunes and the App Store. They are unique, cost effective mechanisms to connect with consumers and to realize a return on their digital investment. More than three billion downloads have been made from the Apps Store (both paid and free) in the first 18 months, and iTunes  just reported a record quarter of sales and remains the top online content catalog. They are the new connectors.

Apple, with all of its nearly $200 billion market cap and nearly $60 billion in annual sales, has the financial and technical wherewithal to take us all a long way down the digital highway. The iPad will nibble away at other mobile devices — including those made by Apple — and raise the bar for hardware, software, content and commerce players. But there will continue to be plenty of room for all kinds of competitions–from smart phones and Blackberries, to Kindles and other e-readers, to Xbox and other gaming, and all kinds of laptops and netbooks. And it will take time for the competitve dance to play out.

With seamless interface, pile-on connectivity and touoch screen speed at the forefront, the more pressing issue is whether the producers of content and advertising companies will innovate and step out of their comfort zone to interact with consumers on this new playing field. The worst that can happen is media companies providing television and films, books and newspapers, magazines and video games –and the Madison Avenue players who support them — could develop new revenue  streams, marketing platforms and creative forums simply by reaching out to the consumers most interested in their goods and services. How bad can that be?

Read more of my analysis at BNET, Seeking Alpha and Mediapost.

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Don’t look now, but the television experience that has defined the way Americans get their news and entertainment for more than half a century is about to be transformed by Google’s YouTube.

The leading online video platform is fixed on finding new ways to hold viewer attention for longer periods of time — presumably to expose them to more of the advertising that contributes to more than 90 percent of Google’s total revenues.

The average YouTube user spends about 15 minutes a day watching online video compared to about five hours watching conventional television, which is its “true” competition, according to Hunter Walk, director of YouTube product management in an interview with The New York Times.

Walk is leading a team of about a dozen engineers, designers and project managers who are fine-tuning YouTube to give its users what they want — even when the users aren’t quite sure what that is. The goal is to get them to spend a few more minutes on the site every day by taping YouTube’s vast video library, Google’s algorithmic magic, and the irresistible draw of virtual recommendations and the art of discovery.

The changes YouTube gradually introduces will surely move us closer to the personalized — even intuitive — video experience that empowered consumers want. More than any other device, television is proof that the digital world is having difficulty keeping up with rapidly changing consumer behavior.

Television’s integral role in American life has made it just as challenging for traditional players to change the norm. The Big 4 broadcast networks — Fox, NBC, ABC and CBS  — are long past their prime and profits. They are fighting for survival by shifting their most popular content to co-owned online platforms such as Hulu  and paid video-on-demand venues such as Apple’s iTunes. They are  scrambling to reinvent themselves as dual revenues outlets that can supplement declining advertising revenues with hefty cable retransmission fees.

In 2010, television and video as we know it will experience even more radical change.  Hulu will launch its first paid content offerings. Netflix could big deeper into the paid TV world. Comcast will take controlling ownership of NBC Universal and likely reconstruct the struggling peacock network into one or more cable outlets supported by ads and subscriber fees.

Major cable operators such as Time Warner will be threatened with losing popular TV programs from content providers such as Fox, which is holding out for a 300 percent fee increase to renew a carriage contract that expires at midnight on New Year’s Eve.

The days of free, ad-supported programming piped into a living room boob tube are clearly numbered.

Maybe Fox owner and paid content maverick, News Corp. chairman Rupert Murdoch, figures it’s time to go for broke. Murdoch is throttling paid content video options on Hulu and on cable to parallel his plans to erect online pay walls for The Wall Street Journal and other of his popular newspapers.

In an age when TV viewing has become video  on multiple screens dominated by mobile devices, none of the old rules and economics apply. They are being reinvented –not by News Corp. and other Big Media — but by companies with funny-sounding names: Netflix, Boxee, TiVo, Hulu and YouTube.

Such  players are hammering out new business models and applications they’re hoping will strike a wildly popular cord with confused marketers and liberated consumers, who have reduced video viewing to just one of many customized options in their digital day. None ironically has found a way to quantify and qualify viewer connections in order to make digital video a going concern. Even so, there is no place in the interactive world for archaic TV ratings estimates.

As television viewing become more interactive and mobile video becomes more universal in 2010, we could be looking at a year of converged chaos with spectacular visual results.