Daily Update: Autistic Cheater, Netflix and Hulu, More

Good afternoon. And a curiously crazy, busy week comes to a close.

And no, I'm not talking about Macworld, obviously.

Did you hear the story about the autistic kid that was labeled a cheater on Xbox LIVE? And about the kid's mother, who raised a huge stink about this? Well, turns out he was cheating. And the mother knew about it all the time, even though she tried to turn it into a sob story in the press. Shameful.

Netflix posted a 52 percent jump in profits and a 34 percent increase in revenues during the fourth quarter, giving the service a subscriber based that "likely surpasses for the first time traditional video services such as Showtime and Starz.." Those services have about 18 million subscribers each. So Netflix could have somewhere around 20 million subscribers now. Not too shabby.

Meanwhile, Hulu is reportedly coming up with a plan to to dramatically transform itself. The worry, apparently, is that too much of the content on Hulu is available for free elsewhere on the web, and maybe the service would be better off as a web-based On Demand service of sorts. I don't think there's room for Hulu, frankly.

An interesting article in today's New York Times says that declining music sales in traditional formats (CDs, etc.) is sinking well faster than digital music sales are rising. In fact, the digital music market may have already peaked, with sales flattening. I'm not saying this is payback for the music industry's years of silly attempts at killing digital music, but ... actually, I am saying that.

In its last exclusive quarter with the iPhone, AT&T only added 400,000 net new contract customers, down from 1.3 million a year earlier. (It did activate 4.1 iPhones in the quarter, but lost customers elsewhere.) And now the company has a new strategy: Focus on Android. 

And finally, Sony revealed its next generation PSP, which is currently codenamed NGP (for Next Generation Portable). There's a lot going on with this device--3G, touch pads, dual cameras, and so on. But the big deal, from my perspective, is that Sony is finally fixing the one glaring issue with the current PSP: Now, instead of just one analog stick, the NGP will feature two, just like a modern Xbox 360 or PS3, enabling the device to support true shooters like Call of Duty. And not coincidentally, that's exactly what's going to happen: When the device launches later this year, the new Call of Duty game will be available for this device. I can't wait: For all the hub-bub around touch screen devices, you can't do a shooter justice. This is exactly the kind of hardware you need.