Broadband penetration has reached a point where a significant audience can now view content at high quality. The high-end online video segment (Web-TV) is wide open but few companies have taken advantage of this.

The new battle between Microsoft and Adobe is about this higher quality content. Microsoft realizes that Windows media has lost round 1 to Flash on most fronts, the one exception being live events where windows media is the market leader. Both have promised HD compatibility. The question is - how will money be made when it costs so much to deliver this high quality video over broadband?

Higher quality means higher bandwidth costs for content deliverers. Consumers have demonstrated a willingness to pay for IPTV in the form of FIOS and U-Verse, rather than traditional cable, but when it comes to successful monetization of WebTV in its current low-quality form there are few successful examples. Youtube is one exception - at the moment they have enough eyes to make advertising a viable revenue source. MLB.com is another and has started offering higher bitrate streaming for those willing to pay a higher price.

But what will happen when people begin to demand higher quality? Sites like Joost and Brightcove have already begun to differentiate themselves on quality. Youtube streams over 100 million videos per day at a bitrate of 364k and average viewing length of 2:30. Their bandwidth charges are already rumored to run between $1m -$2m per month. When people start to move to other sites that offer higher quality how will Google be able to keep up?

WPP today announced an investment in VideoEgg, a company that serves user-generated video on social networking sites. The company founded in 2005 aims to ease the video upload process. More than 12m users view their videos per month month across all partner communities.

More importantly they been more successful than YouTube or anyone else at getting users to interact with each other over video.

An example of this interaction is this video:

Of a VideoEgg presentation on how to upload a video with VideoEgg posted by a user who attended the SFWIN Conference last year.

They also have some pretty cool features such as a simple online editing system for novices not familiar with FCP or those uploading video directly from a phone. They have the ability to serve ads as flash ticker overlays on or in the player menu. And they seek out the prosumer content creators who have great content and provide a way to profitably syndicate in a way superior to what most video sites now offer.

As mentioned in a previous post, Yahoo! isn’t monitoring the advertising content associated with their video news clips. While the Dove Body Wash commercial in front of a news clip about professional wrestling is ironically funny, this morning’s blunder is absolutely not.

As we all know by now, there was a heinous incident at Virgina Tech, and the killer recorded his own video, saved it to disc, and then mailed it to NBC. Slowly this video has been making its way into the news. Whether or not you agree that any of this footage should be seen in public is a different matter.

But in one of the worst examples of inappropriate advertising, the :30 second pre-roll ad that ran in front of this news story was for………Netflix. The tagline in the commercial: “Nearly 1 Billion movies delivered so far.”

Please, Yahoo!, I’m begging you. Fix this immediately. We’ve got enough trouble making the case for pre-roll advertising without the leaders in the industry tripping over their own feet.

Here’s another in the Viral department that has been getting a lot of play in Boston

Watch the clip above before the MLB.com lawyers get hold. If that has happened already the folks at Barstoolsports have been smart enough to remove all branding, and dumb down the quality enough that it should fly under the radar. Though it’s not nearly as much fun to watch.

UPDATE 4/25/07 - Both Youtube videos have been removed but it lives on at Crave Online (for now):

Red Sox Pizza Incident courtesy of Crave & MLBAM

Get Ready for FunnyOrDie.com, co-founded by Ferrell and Adam McKay’s Gary Sanchez Productions

This video featuring Farrell, McKay and McKay’s daughter was posted late last week when the site launched and already has received more than 3 million views, most of them today as buzz spread via blogs and office AIM messages. That is some pretty solid traffic since this morning when it was featured in cynopsis at which point it had 1.4 million views.

Based on user feedback videos can be elevated to one of several channels - “Immortality”, “Uh-oh”, or “The Crypt” where bad videos go to die. The clip above has already been posted to and removed from Youtube at least once due to rights violation.

RIA - Rich Internet Applications are the talk of NAB.

Meanwhile Adobe announced it’s own player, building on flash to provide higher quality video, enhanced DRM and analytics, and adds live-event streaming, protected downloadable playback and monetization features such as custom player design and ad-insertion. Like Microsoft it includes interactive features though these appear to be less advanced than those offered by Silverlight.

Adobe also announced the Flash Media Solution Provider service, a consulting and implementation service specializing in assisting customers with setting up live-event streaming, one area in which Adobe has lagged behind Microsoft.

At this point there is a great deal more focus on Microsoft than on Adobe and the potential of the VC-1 codec used in Silverlight. It is possible that this format - capable in advanced modes of 1080p 24fps playback at 45MBps and with a maximum resolution of 2048 x 1536 24fps over 135MBps could become the standard on which future IPTV is based.

And when you think about the potential of interactive HDTV interfaces, that’s pretty exciting. For now, both PC and mac users should be happy to know they will have a lot more options when it comes to watching online video in the near future.

As the Nor’easter pounded most of the east coast, user generated videos provided valuable information - as well as some much needed diversion - to people trapped by the weather.

In Hoboken, pictures and video of the flooding posted to a local website served as a launching pad for a political debate about the state of the city’s infrastructure and a much needed eye opener for people who had no idea how badly parts of the city were flooded. The comments also served as a reference point for anyone trying to navigate their way through town. Users from all parts of the city provided info on what parts of town were drivable, walkable or simply best to avoid.

Even the Mayor got into the act, recording a video letting people know how well they were handling the situation. Purely self congratulatory, and the locals didn’t buy it, but worthy of a mention nonetheless.

Some highlights:

Intersection of newark and willow report: Just watched a few cars die in the middle of the lake, saw a Pizza man on a bike try to balance the bike and the pizza and ride thru the like, quite a feat, nominate him for the Chinese Ballet.

if your parked around Second and Clinton, move your cars…. The water is up to the car doors….
i peeked out of my apartment around that area and there is no intersection anymore, its all water.

The shoprite area is flooded badly. Water is up to doors on cars parked on jefferson across from shoprite. Saw a man leaving shoprite walking across jefferson who was waist deep in water.

Update, port-o-potty floating on its side at construction site at 1st and Harrison, repeat port-o-potty floating on its side

Huge fire on 2nd and Clinton-ish - neighborhood is engulfed in smoke.

The intersection of Harrison and First is under three feet of water the people of Harrison Court have had to put up sandbags of First and Jackson is under two feet of water.

“Haven’t thought about video as anything separately than other aspects, but could benefit from better tools, targeting, measurement.”

“Together with YouTube should bring much better experience to advertisers and users. Better targeted ads, better user experience. ”

Purchase enables merger of search and display.

Users to see significant benefit by seeing more relevant advertising.

Well it didn’t take long for Google to get the last laugh. Raining on CBS’s parade, Google purchased Doubleclick for $3.1 Billion IN CASH.

Key points:
The combination of Google and DoubleClick will offer superior tools for targeting, serving and analyzing online ads of all types, significantly benefiting customers and consumers:

* For users, the combined company will deliver an improved experience on the web, by increasing the relevancy and the quality of the ads they see.
* For online publishers, the combination provides access to new advertisers, which creates a powerful opportunity to monetize their inventory more efficiently.
* For agencies and advertisers, Google and DoubleClick will provide an easy and efficient way to manage both search and display ads in one place. They will be able to optimize their ad spending across different online media using a common set of metrics.

An investor webcast is available from Google’s Investor Relations page.

Take a look back at Kate Kaye’s coverage of the rumors on ClickZ. Kate was all over this story from the beginning, bringing the actual impact of a possible deal to the forefront.