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LAS VEGAS--Studios know how to make money in the traditional way--in the theater, via broadcast television. But the Internet still has them slightly flummoxed.

True, most of the major film and television studios are embracing the Web. But the exact formula for distributing their content while still making money remains somewhat up in the air.

Here at CES during a panel sponsored by Hollywood trade pub Variety, the heads of digitial distribution for Disney/ABC, Fox, Paramount Pictures, and Warner Bros. discussed what is and isn't working for them.

All present were adamant that there is no one good way to make money online yet. "We're using every model because consumers will ultimately decide how they want to consume (content)," said Tom Lesinski, president of Paramount Pictures Digital Entertainment. For Paramount, that means downloads of its films via iTunes, Xbox Live, Netflix Watch it Now, and the Vudu set-top box.

The head of Fox Entertainment's digital media group, Dan Fawcett, said the best way is to give content to people the way they're used to. "People online want things for free. They can get it for free on piracy sites," he said. "They are inclined to watch it with a reasonable amount of advertising, but downloading a movie that takes a couple of hours just to own it doesn't seem to be a very compelling consumer experience."

This, of course, gave Fawcett the opportunity to plug Hulu.com, the online video partnership between Fox and NBC Universal where some of the two companies' most popular shows are viewable for free with some ads.

Paramount's Lesinski agreed that studios have to "give (content) to people anyway they want," he said.

Digital content heads of major Hollywood studios at CES.

(Credit: Erica Ogg/CNET News.com)

And so did everyone else: a constant familiar refrain from all of them was "letting consumers consume content when and how they want." But isn't the way they want it instant and free?

Other tidbits: All of them profess to like Steve Jobs. Some think Apple and its iTunes Store hold too much sway over the download business, but those on the panel didn't seem to agree. Warner Bros. called Apple "a great partner," and Paramount is really, really happy that 5- and 10-year-old film titles are selling in volumes of hundreds of thousands today on iTunes. Disney, perhaps unsurprisingly, was almost defensive of Apple. (Jobs is Disney's largest shareholder.)

"Apple wanted to legitimize the marketplace," said Albert Cheng, executive vice president of digital media for Disney-ABC Television. "They compete with so many other different options, including piracy. To say Apple has so much control is looking at a very narrow slice of pie."

All had plenty to say on the impact of the Web on professional content. But despite talk of successes with viral video, streaming branded sites, and partnership deals across different platforms, none had an articulate response when an audience member asked when online revenue would surpass traditional revenue sources for each.

After some amused stares with each other, finally Fox's Fawcett was able to stammer: "Nowhere in the forseeable future."

Updated 12:30 p.m. PT

A coalition of major media and technology companies that notably does not include Google appears to be getting serious about copyright on the Internet.

A who's who of media companies--CBS, News Corp.'s Fox Entertainment Group, NBC Universal, Viacom, and Disney--as well as Microsoft and the News Corp.-owned MySpace, along with video-sharing sites Dailymotion and Veoh Networks released a set of guidelines Thursday designed to halt online piracy.

Notably absent from the list is Google, which unveiled filtering technology for its YouTube video-sharing site on Monday. Sources familiar with the coalition plan say Google was involved in the talks at one point, but backed out shortly before making its own announcement. Disney and Microsoft initiated the effort, multiple sources said.

"Initially Disney reached out directly to us," Veoh Networks CEO Steve Mitgang said in an interview with CNET News.com.

In response to questions, Google released a statement from YouTube Engineering Director Jeremy Doig: "We appreciate ideas from the various media companies on effective content identification technologies. We're glad that they recognize the need to cooperate on these issues, and we'll keep working with them to refine our industry-leading tools."

A YouTube spokesman who asked not to be named says Google had talked to Disney about the guidelines but Google and YouTube executives decided not to join the alliance because they were worried that creating "industry-wide mandates" would stifle innovation.

A source close to the deal hinted that the longstanding billion-dollar lawsuit between Viacom and Google over copyrighted content on YouTube may have played a role in Google's decision to back out, citing the possibility that it could have affected how the litigation would unfold. And another source familiar with the alliance finds fault with the fact that Google's new filtering system doesn't actually block infringing content from being posted, but supposedly removes it from the site within minutes. The media group's guidelines call for "blocking infringing uploads before they are made available to the public.

"It's unprecedented that these disparate companies have come together," the source says. "It's a real loss that Google isn't a part of this."

The companies expect to implement the guidelines before the end of the year, another source at one of the companies says. It hasn't been made clear whether this will mean we'll be seeing more announcements and partnerships--or more specifically, whether the two video-sharing platforms involved in the alliance, Veoh and DailyMotion, will become more attractive business partners for the major media and technology companies involved.

"Our goal is to be a vital partner for premium independent and individual producers. We're already a partner to CBS," Veoh's Mitgang said, referring to the company's new online video-sharing network. "We are actively working with everybody on the list regarding this."

Representatives from multiple companies involved in the initiative emphasized that it's not a closed partnership and that other corporations may be introduced into it as well--provided they are willing to adhere to and support the guidelines.

"The principles acknowledge a collective respect for protecting copyrights and recognize that filtering technologies must be effective and are only a part of what is necessary to achieve this goal," a joint news release said.

The guidelines also call for companies to: balance the legitimate "fair use" rights for using copyrighted material, promptly address claims that content was blocked in error, and upgrade technology "when commercially reasonable."

Protecting fair use--which allows people to post excerpts of copyright content and use content for educational purposes and for parody--is important, says Ken Boehm, chairman of the National Legal and Policy Center, which monitors copyright issues online.

Boehm criticized Google for not joining the effort. "Google is continuing to play hard ball," he says. "They are going to use their market share and economic power to just hold off any kind of reform or compromise."

Several sources say plans have been made for representatives from some members of the new alliance--though it's not yet clear which companies--to head to Washington, D.C. soon to meet with members of Congress on the matter. Rather than move to encourage more legislation, it's to educate lawmakers on the issues and show them that occasionally-sparring media and technology companies can handle this on their own.

A full list of the principles involved in this new set of guidelines, which emphasize high-tech filtering, quick removal of pirated content, and promotion of infringement-free digital content, are publicly available at the new site UGCPrinciples.com.

The news was originally reported by the Wall Street Journal earlier on Thursday.

With contributions from CNET News.com's Elinor Mills.

Pirates getting in the way of business? Let's form Voltron.

(Credit: TV Tokyo)

The announcement has been made--read CNET News.com's full coverage here.

The Wall Street Journal reported on Thursday that an impressive cast of major media and technology companies plans to announce a high-profile list of joint guidelines for preserving copyright and fighting piracy online. Sources told The Journal that the companies involved include media moguls CBS Corp., NBC Universal, News Corp.'s Fox (and its MySpace social network), Viacom, and Disney, as well as tech icon Microsoft and French video-sharing site DailyMotion.

It's unclear whether these are the only parties involved in the deal. Inquiries to several of the companies allegedly involved in the agreement went unanswered.

The most notable party absent from the group is Google, according to The Journal's Kevin Delaney. Apparently, the Mountain View, Calif.-based tech titan had been in talks about joining but did not go through with it. Google is the parent company of YouTube, the wildly popular video-sharing site that had come under fire from media companies for making it easy to share copyrighted content.

Google recently announced an antipiracy technology initiative for YouTube.

Update: One of the biggest gotchas in the Web 2.0 world is getting caught editing Wikipedia entries that you have some relationship with. It seems it happens nearly every day, but it's still news when big names are discovered doing so.

That's why analysis suggesting people at Fox News and The New York Times are guilty of making such changes could be embarrassing to both organizations.

According to the political blog DailyKos, someone at Fox News--as identified by usage of a Fox News IP Address--has "scrubbed" a series of entries having to do with several of the service's personalities, including Brit Hume, Chris Wallace and Bill O'Reilly.

At the same time, The Times has allegedly been mucking with the Wikipedia entry on The Wall Street Journal, as well as about Rep. Tom DeLay, according to Media Bistro. And while the changes allegedly made by someone at The Times don't directly relate to the publication, they still would most likely be considered outside the boundaries of proper Wikipedia behavior.

Representatives of Fox News did not immediately respond to requests for comment Wednesday afternoon. I will update this entry when I hear from the company.

But Abbe Serphos, director of public relations for The New York Times Company, told CNET News.com that, "The IP address listed is our external IP address for all Internet browsing. Therefore, we cannot tell who may have made a posting to the site."

To be sure, such conduct is often done by individuals using company computers and can't be attributed to the organization itself. But in this day and age, it is well-known that editing Wikipedia entries in such a way is verbotten.

Further, thanks to this new tool, which allows for easy tracking of articles on the free encyclopedia, it is going to be harder and harder to get away with it.

Earlier today it was made official, after much speculation, that Photobucket had been acquired by Fox Interactive Media, a division of News Corp. CNET News.com spoke with Photobucket CEO and co-founder Alex Welch on Wednesday morning to hash out some of the rumors and talk about what's in store for the popular image-sharing site.

According to Welch, the company put itself up for sale in order to accelerate growth beyond its current membership base of approximately 42 million. "When we look at Fox, it was really a natural choice for Photobucket because we really want to grow out our brand globally," he said. "It was really about taking that next step much sooner and much faster."

Rumors had suggested that the acquisition would be on the part of the Fox Interactive-owned MySpace, but as it turns out, Photobucket will be an individual Fox Interactive property--not a division of MySpace. "All of our discussions have been directly with Fox Interactive Media," Welch explained. "Photobucket is going to be acquired by Fox Interactive, and Photobucket is going to remain a standalone company within Fox Interactive."

Photobucket will indeed remain intact, but Welch said that the company has "a very detailed product roadmap over the next couple years" concerning its new involvement with Fox Interactive. He hinted that some of the company's other brands, like gaming site IGN.com, may come into play.

Tech news junkies have probably been wondering exactly how the deal came to fruition, considering the much-publicized spat between Photobucket and MySpace when the social networking site decided to block all videos and slideshows from Photobucket last month. The conflict, which stemmed from Photobucket's advertising tie-ins with Spider-Man 3, was eventually resolved. But then acquisition rumors started to swirl, and it all seemed a little bit disjointed.

Obviously, a lot of the details can't be publicly disclosed. But Welch was able to say that that was because Photobucket had been in discussion with Fox Interactive, not its MySpace division. There hadn't initially been much communication between the acquisition talks with Fox Interactive and the terms-of-service debate with MySpace. "We'd been in discussion with a number of parties, including Fox. The incident that happened was between Photobucket and MySpace, not Photobucket and Fox. It was an isolated incident," Welch said. "We resolved the issues by opening up discussions between the companies," and then the acquisition talks with Fox Interactive were able to continue while Photobucket's widgets returned to MySpace.

From what it sounds like, things appear to be running smoothly now.

The announcement from Fox Interactive on Wednesday also revealed that, as rumored, the company had acquired media mashup tool Flektor. But Welch said that there isn't any immediate collaboration between Photobucket and Flektor--yet. Instead, Photobucket is going to focus on its own growth. "As of right now, we're going to continue to build our our toolset to really satisfy our users, to give them really interesting things to do with media."

It's official: MySpace.com parent company Fox Interactive Media has formally announced its agreements to acquire image-sharing site Photobucket and slide show mashup creator Flektor. Financial terms of the purchases were not disclosed by Fox Interactive Media, which is a division of media giant News Corp.

Both acquisitions had been rumored for some time. The Photobucket deal, originally reported earlier this month, is inarguably the more significant of the two: Photobucket, after all, is the 34th most visited site on the Web, with over 42 million users and 17 million monthly visitors. Its history with Fox Interactive Media hasn't been smooth: There was well-publicized friction between the two companies when MySpace blocked Photobucket's embeddable video and slide show widgets in April, citing a terms-of-service violation related to a Spider-Man 3 advertising campaign. Later in April, Photobucket announced that an accord had been reached with MySpace, and within weeks, the acquisition rumors began to fly. The rumored price has been about $250 million.

In a post on Photobucket's official blog, co-founder Alex Welch wrote that "we expect nothing to change in our day-to-day operations," and that "the plan is to operate Photobucket as an independent, standalone company within FIM."

As for Flektor, reputedly a $10 million to $20 million purchase for Fox Interactive Media, initial reports circulated on TechCrunch several weeks ago. Flektor, which lets people edit audio, video and photos to create their own embeddable slide shows, was founded just last year.

Photobucket and Flektor, however, will not become MySpace properties as many of the early reports had hinted; they'll instead be Fox Interactive Media brands, alongside MySpace as well as IGN.com and Rotten Tomatoes.