The first stage is, of course, the use of the internet to deliver the same content that we see on our television. According to the New York Times, viewer numbers show that this stage is going gangbusters. Each network has finalized its content host for streaming video viewing of its content. According to Nielsen, viewership via the internet jumped 16% in the first half of 2007, before many of these deals were even locked down.

Even as we struggle to figure out the dollar impact of stage one, stage two is upon us – the production of shows specifically for the internet. Here, I'm not referring to the user-generated content (USG) of Chinese teens lipsynching Backstreet Boys songs, but professional productions by some of the industry's best and brightest. Take, for example, Michael Eisner's Tornante Co., creators of Prom Queen. The recent news that Google (NASDAQ:GOOG) and Simon Frasier are working on a secret project together makes a lot of sense in stage two terms.

All of this is great news to us as viewers, but a nightmare for advertisers. In a world where content comes from a thousand sources, is distributed over hundreds of delivery systems, with advertising sold by dozens of vendors, the poor advertiser's head can spin. And not in a comedic way; in an Exorcist way.

There are several reports that the HBO unit of Time Warner Inc. (NYSE:TWX) might launch an Internet TV channel. In fact, some HBO content is already available online. Some of it is legal, but much of it is not.

The Financial Times noted that the Internet channel would be available only to broadband subscribers and would allow customers to click a branded menu and download the HBO content they wish to view. The article also noted that HBO's CEO Chris Albrecht said the company was in talks with cable operators.

MarketWatch has also reported this, although it cites the Financial Times. Business Week too ran an online story discussing the opportunity for AOL's In2TV, along with other online video providers, to do this.

CNNMoney.com, a Time Warner property, also used this same Financial Times reference. CNNMoney looks like it was running this from Reuters, but as it is the legitimate arm of TWX in the online financial news (along with AOL Money & Finance) and not a blogger site, this report could have more credence.

Whenever you see reports like this, what you usually think is that the company has decided to leak some potential news to see how it is received. That is one of the oldest and cheapest ways to see the reaction to a product launch or initiative, and it costs the company next to nothing. If something is getting rotten feedback, they can kill the initiative and then say they didn't have any formal plans; if the reaction is strong and suggests the initiative will be a revenue generator, then the company moves ahead with a focus group.

If you think of the potential advertising revenues that HBO could take in incrementally for nearly free, this makes sense. Now the real question is just what the actual content would be. As long as they don't cannibalize new content, this makes perfect sense and could be another incremental income source.

In its never-ending quest to capture eyeballs, Time Warner is going for laughs. DCComics, home of Superman, Batman and Wonder Woman, has teamed up with Warner Books to cross promote a pre-publication version of Brad Meltzer's The Book of Fate, a graphic novel thriller chocked full of American historical tidbits.

Also on a comedic note, Turner Broadcasting System announced it will distribute two "very funny broadband destinations: veryfunnyads.com and Laugh Lab." Veryfunnyads.com will be the world's largest online collection of humorous commercials. Viewers will be able to email links to their favorite commercials. Veryfunnyads.com will offer periodic updates to its collection. This just could replace fantasy football leagues as many people's favorite work-time activity. Veryfunnyads.com launched today via a one-hour World's Funniest Commercials show on TBS. Laugh Lab will feature original materials from well known stand-ups, as well as encore performances of comedy materials already distributed by TBS. Viewers will be able to customize their choice of comedy videos.

Using the capabilities provided by its purchase of Truveo, Time Warner subsidiary AOL aims to be the premier web video site. AOL Video will provide online video search capabilities and will also carry thousands of hours of programming by partnering and sharing revenue with Arts and Entertainment network, the History Channel, Nickelodeon and MTV channels. The initial 30,000 videos also include on-demand news segments from ABD, CNN and Reuters. AOL plans to increase its sale of video ads to over $1 billion in the next few years as additional programming, both original and encore performances, is put on the Web. TV ad marketing is already a $60 billion per year industry.