Why Hulu Should Embrace Boxee
For those that don’t know, Union Square Ventures is an investor in Boxee and I am on the board. For the past several weeks I have watched Boxee's management try their hardest to convince Hulu that Boxee is a big step forward for Hulu and Hulu's content partners.
Unfortunately, Boxee has yet to be successful with that effort and later this week Hulu content will disappear from Boxee. I hope it is a short separation that leads toward a long and happy relationship. Boxee's management is committed to working with Hulu to make that happen as Avner, Boxee's CEO outlined on the Boxee blog.
Boxee is a browser optimized for the 10 ft experience. Much like mobile browsers on phones, Boxee renders the content it finds on the web in a way that optimizes it for the device it runs on (in Boxee's case that is the TV). Boxee is also an RSS reader optimized for the 10 ft experience. Content owners may initially see broswers and RSS readers optimized for TV viewing as disruptive and threatening, but just like mobile browsers are the friend of content owners, so are TV browsers. And Boxee is by far the best TV browser out there for a host of reasons that I outlined in this post when we made our investment in Boxee.
Here's how I came to understand the power of Boxee.
I used to watch Hulu on my living room TV in the Safari browser:
Now I watch Hulu on my living room TV in Boxee:
It's the same content on the same device coming through the same pipe and the only difference is safari is a browser optimized for a computer with a keyboard and a mouse and Boxee is a browser optimized for a TV and a remote.
I spent some time this evening reading the comments on the Hulu blog post. I commend Hulu for being open and transparent about this decision and allowing the community to discuss and debate this decision out in the open. That's the way to do this kind of thing. Naturally, users are upset. There are over seventy comments already on the Hulu blog and over two hundred comments on the Boxee blog. As I tweeted earlier tonite, I hope that Hulu and its content partners take the time to read these comments and think about them.
There's a consistency to the comments and it is confusion first and foremost. Hulu users don't understand the distinction between watching Hulu through Firefox or Safari and wathicng Hulu through Boxee. And many of them are coming back to watching TV because they can watch over the internet, when they want, and how they want. They feel liberated by Hulu and Boxee and see them as a match made in heaven. Which they are. And I sure hope that Hulu and its content partners come to that realization quickly.
As they say, a picture is worth a thousand words, thanks for pointing out that they are both just browsers. I hope that the Hulu team can work with their contacts and bring it back to boxee and props to your team at boxee for acting in a responsible manner.
I hope your optimism prevails. The breakup seems so painfully counter to prevailing wisdom that it almost feels like Hulu is planning a deal with a different TV “browser” company (Apple?).War Boxee!
Hmm. I need to be more paranoid. I hadn’t even thought of that.
maybe – Apple TV is a great living room device/interface – but I don’t see how Hulu on Apple TV makes sense for Apple. many Hulu shows (free) are also on iTunes ($1.99 an episode). typically in higher quality.also, Hulu is already accessible via PS3 and Xbox 360, albeit through more traditional non-optimized browser or PC extender:http://www.whattheyplay.com…http://www.themediamall.com…
Hulu was added to FrontRow via an OSS project (Understudy). I use it on my Mac Mini, don’t think it’s available on AppleTV at this point. Since it’s open source and uses publicly available feeds, I think it’s harder for Hulu to shut down Understudy than it is to go after Boxee, Inc.
if you need any help being paranoid boss just let me know 🙂
Good post — I like the browser analogy.Today we saw two ugly numbers from Q4: Comcast lost more than 200,000 cable TV subscribers and CBS TV revenues fell 8% y/y. So it’s easy to see why old media would want to stab at Hulu, Boxee, and anything that could potentially be seen as a cable/network TV competitor. (Even if they don’t understand it.)But as someone who does not subscribe to cable — $80/month is a ripoff — and falls asleep to Hulu on Boxee every night, I am personally bummed out.
don’t forget that NBC and News Corp (Fox) own Hulu, so basically they’ve created the “monster” with which they’re fighting.
There’s an outside investor, providence equity, involved too
Media companies just seem to be dead set on strangling out any future opportunities for themselves. It’s like they’re sitting up in their ivory tower office buildings in new york with a big oak desk (with no computer on it) making decisions out of the playbook of Barbarians at The Gate……..only problem is people are a bit more nimble than they used to be and no matter how hard they try to consolidate the wealth the internet will dissolve them away bit by bit like a sugar cube in coffee.
Just got finished reading the various articles about this before stopping by to see if you had a post on it. And you do.Seems like Boxee’s destiny – IMHO – is to license its solution for the next generation internet-capable TV’s and STB’s. Boxee’s SW interface is far and away better than anything out there. While that doesn’t address the content-provider side of things – and Hulu really is just a content aggregator here – I think that if Boxee really is positioned as technology provider rather a (potential) operating media company then the content providers may not feel so threatened.I’m just guessing that the notion that Boxee’s UI is the “outermost container” in terms of hosting content, I assume that the perceived threat is that Boxee will run parallel (and non-rev shared) advertising alongside any “in-band” ads that are coming from upstream. Have the content owners made any declarative statements yet?However, if Boxee becomes a technology supplier, I could understand that that may change what business you thought you were investing in.In the end, I’m pretty sure this will get resolved.
to be fair, boxee’s interface has a long way to go to be truly user-friendly. still very, very rough around the edges, it takes way too many clicks to play content and it exposes too much of the file system and link structure (left to menu > Video > Internet > Hulu > Damages > I Agree, It Wasn’t Funny > Play).boxee certainly better than the other Home Theater PCs, but Apple TV interface a bit better than all of them. now if Apple just had an ad-supported biz model…
So true and that’s what boxee engaged whitney hess to help them withI hope you saw all the posts about that soliticing feedback for the design processWe need all the feedback we can get
nice summary of why boxee is good for Hulu and its content partners. you nailed it with “Boxee is a browser optimized for the 10 ft experience.” it lets me watch current and classic (relatively) high-quality TV programs and films from my couch whenever I want, funded by advertisements.I hope this isn’t the fork in the road where the TV/film companies follow in the misguided path of the music industry…
Interesting move. Is it correct to assume the content providers are attempting to maintain control over tv distribution? Do they have that authority in this instance, given that Boxee acts essentially as a mashup of content in the open on the internet, and Hulu is already a part of that open content?I too applaud Hulu’s transparency, but it sounds like the child is complaining to one parent about the decision of another. Hulu serves two masters – the user and the content provider. Unfortunately for them, the content provider still pays the bulk of the bills, and that is who is undoubtedly to blame for this mess. It’s gonna make dinners a little uncomfortable for a while…
I give the Hulu guys a lot of credit for being consistently clear and intellectually honest communicators. No double speak. Good news or bad, that’s about all you can ask for, so hopefully others don’t knee jerk into shooting the messenger, as it’s unwarranted in this case.Specific to Boxee, one wonders if in these tough economic times, we’ll see more of the old media suits saying, “If we piss off any of our PAYING distribution partners or lose even a smidgen of control that can otherwise be monetized, it’s just not worth the THEORETICAL downside.”Their knee jerk: there’s a time for vision and a time for counting beans. That said, I believe the exact opposite is what is true; namely, now is the time for long term planning, to deepen your engagement with consumers and create new value chains.As such, the move by Hulu’s media partners is truly penny-wise, pound foolish. A smarter path would be to work with Boxee, et al to garner deeper user/usage analytics so old media can better understand how new media consumers are digesting their content.Alas, maybe old habits will finally die hard.Mark–Read: What it Means to be a “Social” Media Center: Boxee, Apple TV and Square Connect (http://bit.ly/qc5hA)
Being from outside of the States, I’ve never really come across Hulu before. And, reading your post just then, I’ve only now been introduced to Boxee. Before I got passed the first paragraph of your post, I went to the Boxee site to see what the fuss was about. Front page: no explanation (not one that was obvious any way). Ok, so I created an account (which I would rarely do without knowing what I was signing up for), but even after logging in and licking on links for 5 or so minutes, I still couldn’t work out what this site or service was.At one point I thought it was a social networking site and then I came back to your post to find the answer. Now of course I’ve read it’s a browser to suit a TV, but I’m still not even sure that’s what it is or what that means or why I need a different browser just because my screen is bigger.I’m only mentioning this because it ludicrous that a VC backed business is so vague in its presentation to potential customers. I’m going to go read your post from when you invested in Boxee (in hope there’s more info), but I thought I’d comment on my experience thus far.Just constructive feedback from a potential user (and ex-director of a software business, now private equity investor).
Thanks for the feedback. There’s a video that shows what boxee is at boxee.tv. That’s the best way to see what its all about
do you think Hulu negotiating with Time Warner, ComCast and the other cable providers? They can deliver more immediate living room scale than any other option. And Hulu exclusivity would be a rare, valuable, unique chip any cable provider can use to stand out amongst competitors. If its available on a $200 machine like Apple TV, they lose that exclusivity and negotiating position.
I hope it works out. Im hearing through the back channels that its not even the networks that host the shows at hulu that don’t understand, but actually the cable providers like Time Warner who are putting on the pressure because it takes away from their cable services.In oherwords, its not really a problem of users from hulu being on boxee (after all, the hulu ads travel to boxee too), the problem is that the Comcasts and Time Warners of the world are losing their monthly TV suscription fees left and right to boxee and hulu users. And everyone needs to do what Time Warner says because they have control over the big $ right now.Kinda like real-life pirates on the open seas. With big guns.
Then the cable companies should offer boxee on a cheap device with basic high speed data services and get on the right side of the movement
I agree. Yet AT&T tried selling a box a year or two ago and failed. TiVo is not new either but doesent make it look easy. And don’t get me started talking about Akimbo. Oy.
And that’s the whole point.This is like the whole piracy battle. Content companies complain about big losses due to piracy but many of those people wouldn’t have paid for the product anyway. Might as well create a revenue stream out of those folks. Hulu has done that very successfully for example.I don’t have cable. But I watch Hulu off and on on my TV. Even if Hulu went away, I wouldn’t get cable. Working in a very small niche market may not make business sense but Boxee is doing that for free for the content companies.There is a market for folks who choose not to have cable but still want to watch content on the TV. It is not cannibalism as much as catering to different audiences. And having a presence today makes it easier to adjust tomorrow when it becomes the dominating way that business gets done.
Would you take this deal if they agree to allow Hulu via Boxee to cable subscribers only?
Or like the auto companies killing mass transit in L.A.It’s always this way — I’ve been dealing with this not with every product I’ve shipped, but a fair number.Fred has disrupted the revenue stream of some giants and they don’t like it. Not really very surprising.We need to get him a Che Guevara beret and a Fidel Castro cigar to replace his khaki pants and blue button-down shirts. 🙂
I’ll wear them proudly Dave!
amusing how communist rebels become the symbol for capitalist creative destruction…
It is sort of strange. But I’ll go along with it anyway.
Well it was only a matter of time really. Ignoring the stupidity of Hulu not allow it let me bring up another point. Ease of use and accessibility to the average non-technical user. Boxee doesn’t have it. Netflix through Tivo accomplishes this. AppleTV accomplishes this. Boxee doesn’t. I really don’t see what market you are going after here.
There are almost 300k happy users (in a few months) that don’t see it the same way as you do. That’s why there’s a market. All that I am suggesting is the content owners engage in the market
That’s exactly why cable companies & content providers should NOT embrace Boxee unless Boxee provides a clearer picture of the value to the content creators. There’s no question they provide great value to consumers, but that’s only half of the equation. If Boxee has 300K users today, who knows how many millions it would be a year from now if content providers allow their content to be experienced by consumers for free with the same (or better) level of satisfaction they get by watching on TV.Why on Earth would a sane cable company support turning $140/month customers into $20/month customers? Why on Earth would a sane content provider allow a consumer to experience content through Boxee on a television and reap the benefits of only one or two ads vs the benefit of many ads plus affiliate fees from cable & satellite providers. Boxee needs to do a little bit more work explaining to content providers & cable companies what’s in it for them.TV is not like music – it costs a ton of money to create high quality movie/television content, and there needs to be a way to monetize it for people to continue to take great levels of risk to create high quality content.
Can you expand or point to an explanation of the statement “Boxee is also an RSS reader optimized for the 10 ft experience”? I’m an RSS advocate since scriptingnews was #1, and a boxee/appletv user for around a month… but I have no idea what that might mean. It must be a feature that I’m missing, and that is unacceptable.If boxee has/is something that is as fundamental a shift in media consumption as rss was to my information consumption…
Some of the content in boxee is delivered via RSS and is noted as such. Check out the CNN content. That one place where boxee is acting as an RSS reader. There are several such examples
I am still trying to grok this decision by “Big Media”. I use my AppleTV, not for its intended purpose, but specifically to watch Hulu on my big screen via Boxee. Maybe someone at “big media” looks at that as a slice of their pie being taken away, but they should really think about it. I paid $250 specifically to watch THEIR service on another medium WITH THEIR Ads. I’m trying to look for some kind of ulterior motive but I can’t find one.’Use my service (with advertising) but please, don’t use it too much.’It will just drive people to torrent and move underground. Which is unfortunate, because I thought we were past the need for that.From a tech standpoint this is also something that bothers me. Technically Boxee is a browser for the 10ft space. Why should I not be infuriated that a company is trying to tell me what browser to use?Hulu’s credibility is deteriorating with each passing minute.
That’s the way I see it too
What you are saying is spot on. Except I don’t see Hulu as the issue. Granted, I don’t have the inside info you do, but when I read the Hulu post, what I read between the lines was “The studios are a bunch of chumps. We hate them. “
Well Hulu is an awesome service and I understand they are stuck in a pickle. I just want to help them get out of it
Fred,Looks like i’m going to be ‘the lone voice of dissent’ here but i’m sorry i have to agree with Hulu’s position.I’m not sure if you were on the yi-tan conference call 3 weeks ago but i raised these questions with Avner on this call at that time and the answer he gave us at the time was that “Boxee is like a browser we just deliver the content” – unfortunately thats not the case as i see it.You are repurposing content without regards to the original content licensor.The analogy i used was it would be no different to recording FTA tv onto dvd’s and selling them down on canal street. (also because of my consulting to Amethon if you would like to discuss mobile browser reformatting and lack of concern for original content owners then this is a discussion for another time).I also agree with some of the other comments about how ‘old content’ doesn’t get it but this doesn’t negate the point it is their content.At the end of the day i think the next move is up to Boxee to go back and negotiate commercial terms that make sense for all partners involved.One of the lessons i learned out of working with Akimbo is that when you put a ‘fair deal for all’ onto the table then everyone works to move things forward as a team. At the moment one of the Boxee team providers dont perceive the value in being part of this and it’s up to Avner to convince them otherwise.(Actually, to be honest i think Hulu should be paying you but thats a discussion for another time as well).Cheers,Dean Collinswww.Cognation.net
DeanIf boxee put mozilla code into its app and rendered hulu with that code, would it make a difference in your analysis?I don’t get the distinction between what boxee is doing and what firefox does with hulu’s content
Fred,Save this web page and put the url into your diary to re-read one year from now. I think you might read it in a different light (lol i’ll be waiting for your call at that time).To answer your question – the distinction is quite simple this ‘isn’t what boxee is doing’, Boxee is repurposing content without the permission or involvement of the original licensor.If you dont like my example above of dvd’s in canal street how about this version.What Boxee is doing is taking copies of the NY Times, cutting them up to A4 size sheets and then distributing your version of the NY Times at the 32nd and 7th ave exit of Penn Station.Sure NY Times will be selling more copies so should be happy, but you are repurposing the content into your vision without the permission of the original licensor.I’m as ‘newtech’ as most people but the flaw here is that Boxee is making money from someone elses content without their permisson. Like i said before, one of the reasons Akimbo signed so many partners is their commercial agreement was fair to every partner and stakeholder.This isn’t fatal for Boxee, but it does require a restructure of the business model. It’s a temporary hurdle as long as you roll with it rather than fight it.Cheers,Dean Collinswww.Cognation.net
Dean, I don’t understand.Is showing content in a broswer repurposing?
It is when you are changing how the content appears.Boxee is NOT a browser.You are handling this wrong and will lose with this ‘line of tactics’. Take a breather and step away from the problem for 48 hours.Cheers,Dean
huh? the iPhone changes how content appears, and every browser in the world changes how the content appears. Hulu is html markup alone and then a browser, any browser, renders that content for the specific device the browser is running on. the iphone renders the content for a mobile device, boxee renders it for a tv screen, Chrome renders it for my laptop. There is absolutely no difference.To think that the studios are essentially saying “you can’t watch my tv content on your tv” makes the mind wobble.
Dean – why is boxxe not considered a browser?
Quote:What Boxee is doing is taking copies of the NY Times, cutting them up to A4 size sheets and then distributing your version of the NY Times at the 32nd and 7th ave exit of Penn Station.But Hulu even offers the EMBED option which allows the user to modify the video to show all or a portion of the video. That seems more like cutting and distributing than what Boxee is doing wouldn’t you think?
Dean,In the case of your NY Times analogy, even that is not a copyright violation, as there is no duplication of an existing work. I don’t see NYT successfully stopping someone who performed such an act, even in court.In the case of Hulu in a browser, the “slice up” ad deals have already been worked out with the content providers. If NBC was willing to play a given ad via hulu.com, and the same ad shows in Boxee, then they really don’t have any say in negotiating a new deal.I fail to see how the flaw in Boxee’s plan is making money from someone else’s content. The companies should be delivery method agnostic. It’s akin to saying that Sony should seek permission from NBC to display its shows on their TVs, because they are making money on the device sale. It sounds like an abuse of copyright. If you don’t understand that, you cannot claim to be “newtech.”
What about Tivo. They are making money on someone elses content. The shows that get recorded on Tivo were licensed for a specific timeslot on a specific network. In your model, Tivo is illegally giving the user the ability to watch, rewatch at any given time, and even giving the user the software to download that same content to watch on an ipod, zune, pc etc. How is that different from Boxee?
Consumers (and that’s where every cent eventually comes from) don’t even know what “repurpose” *means*. And it’s not so much ignorance on their part, as the fact that the term actually has no meaning — it does not match up to anything in their world.If it looks about the same except for cosmetics (one appears to have a border around it (the web browser) and one does not) and if it _works_ the same (same Flash widget is loading and showing the video) then they’re going to think it’s the same. How are you going to teach these people obscure and subtle concepts like “repurpose”?
>>Save this web page and put the url into your diary to re-read one year from now. I think you might read it in a different light (lol i’ll be waiting for your call at that time).I’m still waiting to get my money from the last bet you made with the same certainty…
I think our bet still has 5 months to run?Having said that I was more confident until Neomedia had their USPTO case upheld on the 17th of feb.Am also very dissapointed in the EFF as from this statement it looks like they are giving up their challengehttp://www.eff.org/deeplink…So yes in 5 months from now i think you are going to win.Cheers,DeanBTW the point i was making to Fred wasn’t a bet. It was more a suggestion that the way they are handling this issue with Boxee is wrong and that they need to reframe the issue in a different way in order to convince Hulu that they want to be on the Boxee network.It’s a basic fundamental flaw in the way they have set up their case at the moment that is causing them these issues.
Maybe the post on lifehacker on a boxee extension (boxee is like Firefox in that you can create extenstions) that gets Hulu back on Boxee might work better than my argument http://lifehacker.com/51565…
ugh doesn’t anyone on the union square or boxee team play chess??
I’ve never enjoyed chess. I prefer WWE smackdown!
i prefer UFC during my personal time off as well.When it comes to business and my work hours i prefer chess and strategy.But hey you are richer out of the two of us so wtf do I really know.I think this discussion has reached an impass – I’m off to barcamp mobile for the rest of the day in case you are going to be there as well.
Where is it?
Hunter College, 68th st.
Thanks. I’ll try to stop by. Not sure I can
dean what do you think of boxee peer producing its pitch to content owners?http://boxee.pbwiki.com/
nice utilisation of crowd sourcing, obviously it needs to be reformatted to ppt before you pitch to a ‘c’-suite audience though.
You don’t think walking in with a laptop and browsing through a wiki willwork? :)How was barcamp mobile?I ended up playing basketball with my son and his friends
more touchy feely dogooders than ‘tech’.learnt some interesting points about Android though.http://deancollinsblog.blog…
Thanks for the post and the link!
The difference between Boxee and Firefox for Hulu and their content providers is that they lose control over how the content is displayed. Sure Hulu’s ads are shown in Boxee… but changing the game of digital media means figuring out how to make full use of the web to monetize content better. Say Hulu wanted to sell premium ads that skinned the whole web page, Pandora-style (putting large graphics in the background of the player and having animated content to the side). That would get lost in Boxee. Let’s say they wanted to have a sponsored pop-up trivia feature that showed facts about the content on the side of the player. That would get lost in Boxee. What about serving ads for products you’ve recently read about on tech blogs? That would get lost in Boxee if it didn’t support dynamic rendering based on cookies. Boxee isn’t a browser because it doesn’t have a markup standard that Hulu can use to pick the details of what they’re delivering. If Boxee did use mozilla code and just rendered hulu.com, or even specific hulu content pages, then it would definitely be a different story.The networks are still trying to figure out how to monetize this stuff well enough to keep producing shows with budgets like Lost and serving them up for free. I bet they want as much control as possible over the display of their content to figure out how to do that.
Boxee has an api and a sdk, think iphone app storeContent owners can do whatever they want with their content in boxee
hi dean,technically we are not different than a browser. the main difference is that many people use the “boxee browser” with a remote control and are viewing it on a big screen.it is nothing like recording TV Shows and selling them on DVDs. when Hulu’s content is playing in boxee it is using their player, they stream the content, they serve the ads.we are not trying to win tech argument at this stage. we are taking off Hulu from boxee tomorrow as a sign of good faith towards Hulu’s content partners and in order to facilitate a discussion. we hope we can convince them that the value that boxee brings to the table is greater than the perceived threat.avner
Hi Avner,See my revised example of NY times in A4 above.Cheers,Dean
LOL doesn’t sound like a great venture.we are not redistributing their content. we have a different browser. try accessing Hulu.com in firefox/IE while you disable images by default. how is that different?when it comes to playing Internet content boxee is essentially a browser designed for use with a remote.
>LOL doesn’t sound like a great venture.Yeh but i bet I could get funding for it 🙂
send me the powerpoint pitch 🙂
Quote: “You are repurposing content without regards to the original content licensor.”I respectfully disagree. If you assume that the original license was for computer screen viewing only (which I’m not sure that it is), Plasma and LCD tvs act as a compuer screens, so where’s the violation?I think with the success of Netflix on Rocku, Tivo, Xbox etc. Hulu wants to now take this revenue route into these type devices and surely would have worked with Boxee, except terms could not be reached. I also think that the likes of Clearleap and others who are enabling the Cable companies to handle web material to the TV, a deal with Hulu will ultimately be reached there as well.An alternate thought is that the possibility remains that Hulu is no longer deemed as needed by the content providers and they will not renew a contract with Hulu, but will opt for revenues through the likes of Netflix, Tivo, Xbox, Comcast etc.
My experience with Hulu wasn’t positive – streaming TV simply can’t compare to downloads or DVDs for consistency of viewing experience. Boxee’s optimized screen is a step forward, but it won’t solve the essential problem of choppy streaming and dead links.
Hulu withdrawing from Boxee seems like a lost opportunity for content providers. The current economy must be weighing very heavily on their revenue, for them not to tolerate any experimentation or potential channel conflict.Has Boxee explored the opportunity to share some attention data or user preferences with sites and content providers to entice them with added value and bring them back to the negotiation table?
Not sure if they’ve offered exactly that but they surely could
I wonder how much this has to do with differentiating between broadcast royalties and Internet royalties. This can put content owners in a difficult position as they appease their bread-n-butter distributors while trying to appeal to social media natives that know they are in control. As Jason said, “it’s a complex matter.” It can be simpler.Once everyone admits content has no public value unless it garners public attention, we realize the world has shifted from “content is king” to “context is king”. Ultimately, this frees content owners and consumers from an extortionist licensing model. Instead, value can be harvested directly from consumer interactions (e.g. Google Adwords). Hulu and Boxee seem well positioned to benefit both content owners and consumers in this new economy.
Hulu should get with the program. Completely short sighted on their part. Take a look at the history of the Internet. Every company and industry that has been short sighted about where the world is going has lost out on the early adapters who in the long run are the market makers of the next user interface.
But what is the upside for the TV & movie companies to work with Boxee today? Now that music companies kind of “get it”, are they making more money than they did 10 years ago? No way – online is a lose/lose for content & media creators right now – see newspapers (NY Times is open online now, and their stock is going to $0 because of it), see music, see magazines (I read NY Magazine online b/c it’s free rather than pay $50/yr to subscribe – it’s great for me, but they lose).The monetization opportunities online are nowhere near the traditional monetization opportunities for content providers, and they won’t be for a long time. Sure, it’s great for Boxee if Fox & NBC allow them to thrive on the backs of content they’ve created, but it’s not great for the people investing in & developing new TV & movie content, and it won’t be for a LONG time.
The airlines created Orbitz to “get back in the game” as Expedia, Travelocity and the like had become suboptimal distribution channels. So, they spent a hell of a lot of money developing a next generation dot com only to find (gasp!) their innovations had been matched, feature for feature, in less than a year. The ONLY thing the travel vendors have is content (which is in the form of pricing and availability). Should they clamp down and REALLY control their content they cut off their nose to spite their face.Now, the networks and content providers are doing the same thing. Their content is available through myriad outlets. Some are free. Some aren’t. But, the choice to close the spigot on Boxee is only going to raise awareness of Boxee and raise the ire of the Boxee audience. Now, reading Jason’s post at Hulu’s blog… he seems to get it without calling his overlords out. Tough spot to be in.Why not just acquire Boxee and gain control of a good thing? Seems like a more logical solution to this situation? I heard it said on many occassions by the management at Orbitz… we should have just bought so and so. The armchairin QB’g on this one three years from now will be very telling.
Fred – sorry to hear this news. I just built a Boxee HTPC and canceled my Comcast cable two weeks ago. If you (or any of the other readers) have contact info for the content owners I would be happy to call / write / email to express my displeasure with the decision.Thanks and good luck with getting this resolved!
Nat are you totally naive? HULU is an artifact of the Web2.0 good times. That’s going the way of CDnow and Webvan. Whatever is coming next won’t be free.
Wow. You built your own box. Now that is real commitment.
No we didn’t build our own box but we have a way to deliver linear streaming video to mobile that is good enough for advertisers to deliver their brand message instream….but that wasn’t my point. TVoIP has to be have delivery costs low enough to make an ad supported model cash flow positive from day 1. Hulu, Joost etc don’t.
Fred I really don’t see how you can say Hulu and Boxee are a match made in heaven when there is absolutely no genuine prospect that content creators and distributors will be able to receive an adequate return. The ad model for VoD is broken. PPV is FAIL. Discovery? If young hipsters can pull their cable how will they ever be able to watch 30 Rock with commercials? Why would they want to?
@phoneranger As much as you claim that “there is absolutely no genuine prospect that content creators and distributors will be able to receive an adequate return”, you have to look at the broader picture, for instance Hulu.com shows there is a strong very genuine prospect that content can get an adequate return. In fact, during 2008 Hulu’s advertising return was more then that of major content distributors like Youtube who are yet to make any money off their content’s providers video (http://news.cnet.com/8301-1…, see the way you can look at the difference between Youtube and Hulu is the fact that Youtube partnered with TIVO (http://www.tivo.com/mytivo/…, and made little to no money off it according to Wired.com (http://blog.wired.com/busin…, whereas Hulu partners with Boxee and leaves the ad’s in and makes a percentage of it’s total ad revenue from the reported 200,000 Boxee private alpha users (http://blog.boxee.tv/2009/0…
Some folks have alluded to this, but doesn’t this come back to Jeff Zucker’s “analog dollars for digital dimes” statement a year (or so) back? While this disappoints the consumer in me (I signed up for Boxee the day the Hulu integration was announced), I can see the business case. Boxee makes it too easy for the consumer to substitute away from broadcast/cable consumption of TV in favor of broadband consumption. Empower the consumer with a remote control and watch your “analog dollars” (yes we know TV’s almost all digital now) shift to “digital dimes,” cannibalizing your cash cow for a pet project.The real question that needs to be asked is not, “Why did Hulu shut down Boxee distribution?” but “What is Hulu’s strategy?” If we ask the latter question, then perhaps their rationale surfaces. My guess is that Hulu’s strategy is to build a computer user experience *for the consumer* that 1) minimizes piracy and 2) introduces broadcasters to online distribution while generating (modest) revenue. And, again, once you insert a remote control into the equation, you threaten your bread-and-butter: the living room consumer. Personal anecdote: last week my TiVo remote was going a little wonky and I didn’t want to sit through 20 minutes of commercials during 24; solution: forgo the HD on TiVo, watch on Hulu (via Boxee) in favor of 2-3 minutes of commercials.So, does the Boxee consumer in me hate this? Absolutely. But does the media strategist in me understand? Absolutely. Will TV execs need to figure out how to supplement those “digital dimes” quickly? Absolutely. In the meantime, just don’t expect them to support efforts that significantly threaten their old way of doing business.
Yours is probably the most respectable comment I’ve heard in favor of the move, and I can begin to see the rationale behind the switch. However, the analog dollars statement ignores the real competitor on the TV. It’s not that media companies are competing against themselves, it’s that Boxee is just one of many media center facilitators arising from the content shift online (in order to reclaim dollars they see as being “lost” to piracy). It’s still debatable whether those piracy dollars were ever going to be theirs to begin with, though. And once consumers see how easy it is to consume pirated media, even the “digital dollars” of Hulu isn’t enough competition (i.e. it still has commercials and potentially limited material, through a TV-unfriendly interface) with the better service and far better price. If you consider that the future media battlefield is going to be over customer experience (either streaming or download), it makes no sense to take your ball home over something as arbitrary and volatile as price.
If NBC were really smart, they’d invest in Boxee…
NBC *is* really smart. I think the folks at Boxee (AND the folks advising them) are smarter though. To the point of not selling out too soon. Who’s to say that discussion hasn’t already happened?The big alphabet soup networks OUGHT to begin eating their own lunch. Launch an online only network with exclusive content created for and delivered through the digital realm (www, mobile, etc). If they don’t someone else is/will.
it’s my belief that providing a means of piping the video onto a television is the crux of the issue (combined with Boxee’s popularity/exposure). And it could be simply an antiquated licensing/royalties system. You’ve got tons of stakeholders and they all want a piece of the pie. Additionally, the affiliate networks probably fear we’ll stop watching the local NBC to catch shows on Internet-connected STBs instead. If/when Hulu comes to the television set, I’m willing it bet it’ll only be back catalog titles.I also assume that without a formal agreement, you had to know this was a possibility
Fred.I love Boxee nd I’m on the side of keeping Hulu open. But isn;t the issue really with the ridiculous rules placed on Hulu by the content partners? I have the same issues arise with my Apple TV. Content disappears for no reason because the content partners have made some sort of deal with a cable company about showing certain content on the TV box or are trying to get me to buy a DVD since there is obviously no other way to watch that show on my TV.It’s a stupid model and is driving me further down the road of abandoning my Cable altogether.What the “content providers need to know is this:1. Music labels fail2. Newspapers fail3. TV broadcasting fails4. Anything overly protective failsAll because they are protecting their sandbox instead of expanding it.
Maybe we can change that pattern this time DonI’m hoping we can
What’s the solution for companies in industries 1, 2, and 3 above? Name me a digital media company that picked up where the music labels, newspapers and TV broadcasters failed that is profitable & making revenue that is anywhere near comparable to the revenues the traditional media companies were making in their heydey, and are STILL making today……Sure, companies in traditional media industries are investing in new technology that will ultimately replace some of the lost revenue moving forward (see NY Times buying About.com, Fox/NBC forming Hulu, CBS Radio investing in TargetSpot, etc.), but it would be irrational to fully embrace technologies that can kill a $bil business today and replace it with a $mil business (potentially – note that Boxee has no business model today that benefits the media companies)
MikeI’ve written about this a lot. With digital/web technology you don’t need a billion dollars to make $50mm in profits. The Huffington Post could (I won’t say will) make as much profit as the NY Times makes today in 5-10 years on a fraction of the revenue. Pandora could (I won’t say will) make as much profit as CBS Radio makes today in 5-10 years on a fraction of the revenue.My post from a few weeks agohttp://bit.ly/iKOpwas all about thisinternet based businesses have super high operating margins if run properly.Craigslist is the best example of this. The classifieds business has gone from billions of dollars in revenues to a fraction of that, but Craigslist probably makes $90mm in profits.
wow this really touches a button for a lot of people (comments all over the internet are exploding!)…anyway I have a couple of questions if someone doesn’t mind giving a bit more insight:1. Do the content providers (ie. the networks and shows) envision that they’ll be able to get additional deals from each distribution channel? Ie. hulu.com pays for the rights to distribute the content via hulu.com (but nowhere else), and then fox.com also pays for the rights to distribute the (same) content via fox.com, and therefore boxee needs to get a deal to also distribute the (same) content via set top boxes? From a consumer’s point of view it’s stupid, but from a corporate point of view it makes a lot of sense and could easily be the angle they are trying to work towards…if this is the case, the ones that are going to be lose out, and SHOULD be fighting it the most right now is actually Hulu.com as they really are a middle man that’s going to get left out in the cold if this approach takes hold.2. Are the various distribution channels using the content as a means of making money outside of the embedded ads? What I mean is that, if hulu.com’s plan is to make money on the ‘experience of watching tv online’ then a system like boxee directly eats into that approach (ie. you aren’t seeing hulu.com ads, upsells, etc. outside of the video stream)…this is also the case for each of the content producers…if their true intention is to offer the online content just as a way to get people to ‘do’ something else related to their brand…then boxee is a real problem for them. However, if it’s really just about getting as many eyeballs as possible to your video content, then there should be no reason not to welcome boxee with open arms. (but I suspect that most content producers are not really viewing ‘getting more viewers of our content’ as the real end game).3. If boxee’s just a different browser, would rendering the full hulu.com experience to the t.v. solve this problem? Would it make sense to make the full experience view the start of the program and then have the ability to go to full screen mode (just like hulu.com lets you do anyway) when you start a program? Then it really is no different than firefox, ie, safari, or what have you…
Number 3 is my point.
Agree on #3.How about when Hulu recognizes the Boxee ‘browser’s’ user agent, the content is served with an additional ad or ads per commercial break? Hulu has proven that enough consumers have demonstrated that they are fine with watching their favorite time-shifted content for free with ad-support. You get about 5 commercials per break with regular TV — and if a show is being viewed on a cable network, you not only have to watch all those ads, but you’re paying to do so as well! And with the user’s Boxee profile and a cookie that exposes the watcher’s viewing trends, couldn’t those ads be narrowly targeted on a per-user basis? That’s super vaulable, right? Tell me again why the networks say they can’t make money with Hulu?A shame, really.Broken record with this line, but I’ve for a while described Boxee as pushing the state of the industry forward despite itself.Consumers don’t want silos. That’s what the providers push, of course, to stake their territory, but in this time-shifted, on-demand world, consumers are over that. We have too many consumption options to be told “Tuesday, 8 PM.” It’s not 1974. And consumers have no allegiance to a network or music label. I don’t care if Scrubs is on NBC or ABC…I just want to watch Scrubs. I don’t care what label Dave Matthews Band is on. I just want to fire up iTunes and download their tracks. Imagine if iTunes launched with only two of the four majors on board, and then the other two formed their own insular download stores. How soon would each fail? How annoying would that be to the consumer? “Is DMB on Universal? Let me check their store. Nope. Warner? Let me check their store. Nope. Oh, right, Sony…” and, Fail.Sound crazy? That scenario is essentially being played out with video now. Hulu = NBC/FOX, TV.com = CBS, and then ABC.com.Silos = annoyed customers.The ideal for consumers would be a one-stop shop, a la iTunes.So, we’d have:1) iTunes for the audience that desires paid downloads of professional content.2) YouTube for non-professional user-gen content.3) And a Hulu-esque, but all-inclusive destination for free, ad-supported streaming professional content. (Ed. – If you look up “blew it” in the dictionary, there’s a Joost logo).Now, just as the music labels had to go through several missteps before iTunes, it seems that the video content publishers are going down the same path.From a Rolling Stone interview with Steve Jobs in 2003 on iTunes:”It took us 18 months…At first, they kicked us out. But we kept going back again and again. Then we started making headway. And the reason we did, I think, is because we made predictions. We said: These [other music services] that are out there now are going to fail. Music Net’s gonna fail, Press Play’s gonna fail…Slowly but surely, as these things didn’t pan out, we started to gain some credibility with these folks. And they started to say: You know, you’re right on these things — tell us more.”Sad that we have to go through this all over again before the networks eventually capitulate for the good of the consumer.Or won’t they?Will they just transfer the “network” construct to the internet? Seems that they’re trying, unfortunately.Boxee, again, was the best effort so far at breaking down those barriers and giving consumers that one-stop shop.This Hulu move is a step backward. It’s Deja Vu all over again for consumers. Sigh…P.S. The recent Understudy plugin for Front Row still works with Hulu…http://code.google.com/p/un…
This whole “lost revenue” claim for Hulu is silly. Hulu plays 90% remnant ads from the ads council on their shows. They’re not making a profit and Boxee only helps them stream their loss to more tvs.
If you’d like to talk about lost revenue – I offer the following example of the past two weeks, when I watched “Family Guy” (yes, I like my humor crude):Last week – watched via Hulu on my AppleTV – sat through all commercial breaks, saw ’em all – a great deal for an advertiser.Two weeks ago – watch via my FIOS DVR – used 30 second skip for all commercial breaks, saw not one ad – I am sure all Fox advertisers cannot be happy with me (or w/Fox).I’m not going to sit through commercials on any DVR’d show, period. If I am a good example, Hulu has good reason to charge/share back to content providers a multiple of what they can currently get from real, non-remnant advertisers. Boxee or Hulu has (or should have) all the data necessary to go to market and sell “real” advertising spots.I’ll even sit through a (reasonable) preroll after clicking the Hulu tile on Boxee (“Hulu on Boxee presented by…”). With 300,000 Boxee users launching Hulu once every other day (Fred/Avner, can you confirm these numbers?) and a $100 CPM (justifiable, given the example of “guaranteed viewership” I gave above), that’s $450K in renenue/month and >$5M/year. Maybe not enough to get content providers excited today, but when Boxee gets to 6M users, the numbers start to get interesting.Just my $0.02.
90% of the ads at hulu these days are ad council – they don’t get paid for those. maybe 2 per show are paid for. maybe.even at the $100 cpm (which gut says NO WAY, but let’s play with it here), and 2 paid commercial views per, that means hulu makes 20 cents per view. which i doubt.don’t forget streaming costs hulu. infrastructure can kill if it isn’t profitable. from one streaming company’s site – “white label pricing starts at $1 per viewer hour for 1,000 viewer hours per month or less and scales down to $0.25 per viewer hour for streams that a reach 50,000 viewer hours per month or more.”p
Sorry I couldn’t get to this sooner, but around all of the real work I had to do yesterday, this whole business with Boxee and Hulu made for fascinating reading.This controversy is (more) evidence of the new emerging economy. Zucker’s “analog dollars” is the issue, not the “digital pennies,” for a free economy cannot sustain greed indefinitely. The idea that “content providers” can continue merrily on their way while everybody else suffers is insane, and rather than bellyache about digital pennies, the entertainment industry needs to carefully examine the cost and profit requirements it demands from consumers while taking in those analog dollars.The entertainment economy is built on an opaque black box, while the new world demands transparency. And here’s the thing I’m discovering with media clients: transparency produces a very different view of everything, especially costs. And if costs are transparent, then so are profits. This is the real fear stated in Zucker’s comment. He’s actually saying, “I don’t want to trade opaque dollars for transparent pennies.” Good luck with that, because at the heart of the personal media revolution is a satisfaction with those pennies. Emerging businesses are always that way.One commenter argues that Boxee isn’t a browser and that it is “repurposing content without permission.” In his remarkable discussion with students at Berkeley in 2004, then FCC Chairman Michael Powell made this statement: “Application separation is the most important paradigm shift in the history of communications, and it will change things forever.” Indeed, separating content from the forms in which it was originally presented isn’t “repurposing” the content as much as it is redefining the form. This, again, is a part of the opaque/transparency meme, for the former “forms” are incredibly costly, and as long as any business (can you say Detroit) can function opaquely, it can charge what it wants. We can argue about competition and all that, but when the people paying for it complain, nobody listens, and that’s a problem in a connected, empowered world.Hulu is playing a dangerous game here on behalf of “its” content providers, for the horse has already left the barn on the controlled distribution of the forms in which content is presented. The Web is not cable pipes, despite the wishes of the Jeff Zuckers of the world to make it so.
Wow. Terry, this is an incredible comment. Thank you for sharing all of thiswith us.I’ve reblogged part of it at fredwilson.vc
This sort of “now you have it”, Oops, “now you don’t”, content game is why the streaming model is ultimately unsatisfactory for a lot of people, why they actually want to own the content so it can’t be taken away. Streaming leaves way too much control in the hands of the streamer and not enough control in the hands of the consumer.Cheers,BW
“I don’t want to trade opaque dollars for transparent pennies.”I love that quote, thanks.Yes, you are right that Content Providers will have to adjust the cost structures to accommodate those “digital pennies”. I don’t think there has been much of a response in terms of adjusting production costs to this new landscapes. There’s just been a few experiments in low-cost webisodes, but high-budget glossy content product is still the norm, it seems. Contrast this with a push towards high-end, cinematic-like content that was spearheaded by HBO, e.g. Soprano’s, 6 feet under, etc, and now adopted by others, e.g. Mad Men. I wonder how this desire for high-end content will mesh with lower production budgets.In parallel, it’ll be interested to see if this affects some of the Entertainment unions (like the UAW since you mention Detroit) whereby concessions will have to be made on the cost side.
I think everyone is talking around the real problem … it’s all about cannibalization. With Hulu, NBC and Fox figure they’re not cannibalizing their TV audience too much; they’re just getting some ‘die-hards’ (in their minds) who are willing to watch ‘TV Shows’ on their computers. The danger that boxee represents to these content providers is that boxee is going directly for their current ‘TV Audience’. This TV audience is still very lucrative, much more so if they continue to watch regular TV, rather than the content that runs on Hulu (with fewer commercial, generating less revenue).Fred, commented: “Then the cable companies should offer boxee on a cheap device with basic high speed data services and get on the right side of the movement”.Again, you’re suggesting they cannibalize their high margin cable business to get into the low margin, commoditized business of just providing a ‘pipe’ … why would they do that?At the end of the day, established businesses will generally hold on to high margin business as long as they can. If they’re smart, they’ll decide to cannibalize themselves, and find new avenues for revenue growth (read: highly personalized targeted ads on Hulu); if they are idiots, they’ll cling to their high margin business too long, and let someone else cannibalize their business.The biggest problem for the likes of Hulu, boxee, or anyone else trying to break up the vertically integrated media companies, is that they need to do a better job of getting higher (MUCH HIGHER) advertising rates. I’m always amazed that when I watch shows on Hulu, I’m not targeted with more relevant ads than when I watch regular network TV.As for boxee specifically … it seems like Hulu could just create their own ‘TV browser’ version for their content (or buy boxee) … when they can finally show they have the ad rates to replace current revenue streams from regular TV.
@kottcamp – I agree completely. I think it has a LOT to do with the fact that Boxee makes it EASIER TO WATCH VIDEO ON YOUR TV.But, then I remember that just yesterday Hulu laid the smackdown on TV.com (which doesn’t make it easier to watch on your tv or online)Why are Hulu lawyers working overtime right now?
I think Dean brings up a valuable point that should not be ignored. Hulu was created to capture additional eyeballs and offer content owners a central location to publish and distribute their content to viewers in a traditional 3ft environment. (meaning PC views not TV) This allows Hulu content owners to create additional revenue streams while not interfering with traditional cable agreements. However, Boxee is creating a blurring of those lines through the introduction of their ” TV Browser”. I quote TV browser because I think you are understating the real value of the application to apear harmless. However, Boxee is really an operating system for PC TV based applications. Even one of the other posters clearly stated they canceled their cable subscription and moved to Boxee as their new provider. If you was a real example, it would be like saying the Magic Jack, or Vonage is not a threat to the phone companies- of course it is.
Boxee only appears to be harmful if you are trying to sell a cable bundle as the wave of the future. The recent popularity of TV shows on DVD is a good indicator that what many already suspected to be true, in fact is: People want to choose what they watch. Cable companies have recently started figuring that out, and are trying to bridge their own gap with self-branded DVRs. Trying to continue wedging media into the constant flow of selected TV programs isn’t going to win any of the players any customer experience points, and they’ll lose revenue via market share.But, Boxee’s deal wasn’t shut out by cable companies. We’ve been told it was by the content providers. If the content providers agreed to the terms of Hulu’s advertisement for serving up on-demand content, there is no material difference if the consumer experiences it through Boxee. If someone is worried that it will put an end to traditional television viewing, then I think their fear is justified, for the better.Even still, we won’t see the masses clamoring for better demand viewing for another 8 or 9 years. But, the demand is coming, prolonging the existing business model only puts the content companies in a much worse position to take advantage of it.
@Alex … my guess is that Hulu’s tv.com ‘smackdown’ is mostly competition … why help tv.com grow, with your content? Sure, you get more distribution (net-new web users), but my guess is they (Hulu’s owners) are trying to re-create a distribution model similar to what they have now … after all you don’t see CBS playing ’24’. With ‘competitors’ like Mac TV, their users are buying content.As an aside, Hulu may have legitimate concern about not being able to track their content usage on other sites for their advertisers (granted most of these could be overcome by technology).
@kottcamp – the CPMs for “online” television (through Hulu, abc.com, nbc.com, aol, etc) are much higher then they are for broadcast media. Online television currently is their “high-margin” business.However, what you say about cannibalization is a legit concern, and I could see that being a reason for blocking boxee.But, in my experience, it tends to be more about the companies that control the content being unwilling to quickly adopt new distribution methods. I think they’ll come around to Boxee, but it will probably take them a while. Remember, it took youtube showing up and having everyone and their brother post tv shows before they moved towards putting their content online. They’re big companies, they do things slowly, sometimes very slowly…. (Look at music distribution)
What happens when a Hulu “repurposer” decides not to work with Hulu (as Boxee is doing)? In an above mentioned comment there were solutions that look like they use uPnP from your computer to deliver Boxee to another device (360, PS3, etc). For all intents and purposes these applications could be written and sourced from China, The Congo or where ever. Since I assume the show is still being streamed to the PC before being delivered to the device it is still streaming from/to inside the US (your PC servs it to the device). How does Hulu expect to defend against this if the application developers were asked to quit “repurposing” Hulu and they (app devs) decided not to?Would the content providers then be fighting with a new class of ‘pirate streamers’. It just seems like a no win, they can still get people to view their ads with Boxee (who want to work within Hulu’s bounds) I am sure there are probably others out there who won’t.It just seems like escalation waiting to happen.
It will be interesting if Boxee have a look at the Big Champagne Stats for the next couple of Weeks for the popular shows on HULU and monitor the increase in bittorrent usage for HULUs most popular content .If Boxee can show the content owners that HULU helps limit piracy of their content becuse of its convenience they might start to listen but for now many Boxee users will just download the shows via bittorrent .
I think Hulu shot themselves in the foot — missing a golden chance to charge for premium CPMs for set top devices , and creating need for a cottage industry where people will actively try to convince Hulu that a set-top box is just IE.I wrote about this in depth here:http://www.destructuring.ne…
something that has been around, but I’ve heard more chatter about in the past 30 days.http://en.wikipedia.org/wik…Probably because it is CableLabs certified and can be downloaded straight to the TV.This looks like the “old”days when Microsoft would see a disruptive technology coming along and announce they were doing the same. Of course with no intention of competing simply to freeze the momentum and market.
I am very disappointed that Hulu is cutting off Boxee, because I like their content and queueing features. But Boxee is more important to me than Hulu. If Hulu doesn’t relent, it’s not the end of the world. I won’t get rid of my AppleTV or Boxee. And I won’t even send a nastygram to Hulu, because they’re too big to listen anymore.I think I’d be much more successful asking the really smart engineers at Boxee to let me watch SciFi Rewind and Heroes and let them figure out how to make that happen for me. It doesn’t have to come from Hulu. I can already get my important content from NBC.com and SciFi.com. So can Boxee.Now, Hulu had done a lot of work aggregating that content and certainly has access to some content that is hard to find online. But I have a lot of faith in the Boxee team. So much so that I DID, in fact, get rid of my cable box (surely what the content providers feared).But removing your content from my preferred channel just means I’m not going to watch your content anymore.
Fred, the issue for Hulu isn’t the mode of viewing or the access to the TV (though, yes, it is for it’s content providers), its that Hulu doesn’t want to be out-aggregated. This is a Kilar-led move, though he is hiding behind the “big-media” excuse.
To state the obvious, this is not about usability but about business. The problem with Boxee is that it is not a full fleged browser. It filters the content more than mobile phone browsers and it only works for a subset of the Internet.To avoid this situation you must create an Internet browser that works well from 10′ with a remote in hand for all of the Internet, possibly optimising it for the most important sites. This way content providers can’t discriminate against you and in the process you are enabling all that niche content too.PS.Your picture illustrates your point, but you can get a much better experience watching Hulu by customising your browser so it is in full-fullscreen or “kiosk” mode.
Pulling Hulu from Boxee is like pulling NBC from Tivo. Ridiculous.
I don’t know anything about this from Hulu’s perspective and I don’t have time to read the whole comment thread here, so i’ll probably just reiterate what ninety-one other people have said: Hulu’s current CEO has been on the money with all his decisions up until now. This seems so far off-base for how a smart person would react that this HAS to be coming from the networks affiliated with the service. They’re the only ones I can imagine confusing a browser with disintermediation. In fact, I bet Jason tried to talk them out of it. The networks affiliated with that service are ultimately going to be Hulu’s downfall IF they won’t permit Jason to run the company the way he would like to run it.
Hulu is the next iTunes music store and Boxee is the next iPod. Hulu (Fox and NBC) understand what they have and are advertising it. Its the cable companies that are freaked and they are looking alot like the record companies, pushing against their longterm interests trying to preserve their existing business model.
Fred,This may go down as the “Heidi game” of internet TV.George is right, the cable companies are freaked and they’ve been talking about it pretty openly. I suspect as well that the content guys are freaked because they are worried they may take a near term revenue hit if the cable guys force them to cut the price of cable channel fees as the audience shifts to online viewing. Netflix Watch Instantly has to be a source of concern to the MSOs as well. A million people connected to the service via Xbox Live in its first 85 days of availability. The audience is routing around multichannel disitribution very rapidly (Boxee was more lubricant for this trend). The folks that are vested in the old model of distribution are getting very anxious.Here is what Glenn Britt (CEO of Time Warner Cable) had to say on the last earnings call:”On the online issue, I think just to clarify what I’ve been saying, the whole cable network industry, I mean all of the distributors, satellite and telco too, this whole economic ecosystem is dependent on subscription revenue and ad revenue and what I’ve really been saying is that as cable networks put more and more content online for free, that will over time start eroding the subscription revenue source. There isn’t a whole lot that we can do about that. This is the program networks that are doing it. And the reality is, we are starting to see the beginnings of cord cutting where people, particularly young people are saying all I need is broadband. I don’t need video and obviously they’re already saying they don’t need wire line phone, so the impact of that potentially over time is to reduce the number of customers.So I’m saying all this because my remarks get misinterpreted. I’m not saying these things as a negotiating ploy. I’m really saying them to predict that people will choose not to buy subscription video if they can get the same stuff for free. In other words, free wins. And if we don’t have a customer, then the programmers don’t get paid for the customer that we don’t have anymore and I think I’m right, that about half of the average cable network revenues are subscription and half are advertising.So I think the danger here is that over time, the subscription revenue could erode.”
Thanks for leaving a comment BrianThis is going to be interesting to watchI’m happy that I’ve got a front row seat and a ticket to this game
There is one more argument that shouldn’t be ignored, and might explain the content owner’s backwards behavior. It’s not about strategy, it’s about symbols.When you pull up the Internet Video pane in Boxee, as someone at Comcast or NBC must have done, you see Hulu’s name alongside ONNetworks, NNN, and Revision3. One of the reasons NBC/News Corp created Hulu was to appease content owners by controlling the context in which their content was presented. Boxee’s problem is that it doesn’t put television content on a pedestal. To someone who has spent their life in the television business, that is herecy and needs to be stopped.Boxee may be the future, but there are still plenty of powerful people clinging to the past.
Fred it seems to me that Hulu is after the growing Boxee market, wants to nip things in the bud before Boxee gains a large following, and sees no reason to pay anything. With all due respect this is probably a case where they’d have bought Boxee if big players (who need a big payback) were not involved, but you aren’t going to settle for anything close to what Hulu can pay to just get this done themselves. They have the infrastructure already so the marginal cost to develop a Boxee environment can’t be more than what, a few 100k? Good luck but I think you may have to chalk this up as another example of the risks of building a business on top of another who is providing the “must have” part of the equation. http://joeduck.com/2009/02/…
There are seriously about 1,000 reasons that NBC should be scrambling to get this resolved with its partners. It’s not even that Boxee is imperative to the future of Hulu specifically, but the past decade has taught us quite a bit about the consumption of content, one of which being the methods in which consumers choose to consume content.The success of Hulu thus far has shown that people will often make use of legit channels when given a viable alternative to piracy. Even if it means watching a few commercials, it’s clearer than ever that people simply want to have options when it comes to mediums.Sure it creates some extra upfront work for content owners to develop ways to protect their materials, but if the eyes are online, on Boxee or anywhere else, copyright owners need to get in front and adjust their models to work with whatever the latest and greatest happens to be.The coddling has gone of for far too long and it’s just holding progression to a snail’s pace. If the medium is the message, it’s about time that content owners get a grip on what the message is saying.
The problem for the networks is that the more people are annoyed by issues like this, the more likely they are to pirate their content. Hulu’s real competition isn’t traditional broadcasting, it’s bittorrent. Something I wrote about last night http://seanreiser.com/conte…
This is yet another clear case of Big Cable Co. applying pressure down their supply chain when faced with a disruptive technology that threatens their business model and confuses their lawyers. This is not about hulu, nbc or fox. They all want as many ad-monetized eyeballs on as many devices as possible. Hopefully this round of fear and greed at Big Cable Co. will pass faster than it did in the past or watch for the consumer backlash to be profound. Boxee has unearthed an unstoppable consumer demand. More thoughts:http://www.techaviv.com/200…
IN 12 MONTHS, HERE’S WHERE WE MAY BE:- Hulu will make an ISP deal with Comcast just like ESPN360 is doing. The cable model is coming to the internet, whether we like it or not. – Comcast/another ISP will buy Boxee- Net Neutrality is at riskPipes (audience) or content? I think pipes will always win.
I think one of your prognostications is pretty likely to happen, although might be closer to 24 months.ESPN360 model seems obnoxious at first blush, but makes a lot of sense given the higher infrastructure/bandwidth costs associated with “high quality” streaming video. and as you point out, it follows the traditional revenue model (cable fees) that the TV industry already understands.I think I might even be willing to pay a small monthly fee to get ESPN360 + Hulu + any other high quality pro video streaming “channel” on top of my cable Internet bill. as long as it was substantially less than the cost of cable Internet + TV since the selection, quality, reliability would be so much less.wrt “Comcast/another ISP will buy Boxee” – see EchoStar acquiring Slingmedia and how that has played out in stagnated innovation from the latter.having had another day to think about this… while I agree boxee is just a “video browser for the TV” and thus effectively no different than visiting Hulu.com in a traditional Web browser, I think boxee should offer money or consumer usage data to appease content owners / networks who surely will lose more and more cable TV customers if boxee really takes off. if that happens w/o such compenstation I fear the quantity and quality of great content will decline… vicious cycle.
If control of content is the driver for content providers to pull their content due to fear of loosing TV viewers or analog dollars, the natural approach would be for Hulu (or others) to create their own content. Fox TV started creating their own content and became a legitimate competitor to the big 3. The problem is the online digital dime business model doesn’t support creating it’s own content. It needs content investment from those whose biz model does support content creation.We are all blasting the content providers for not seeing what we do and suggesting they need Hulu and other next generation distributors. And, to an extent, they do and will more so over time. However, we can’t forget that the current biz model requires others content, because that biz model just doesn’t support creating its own. Until it can, new online content distributor models will be at the mercy of those that can and do. (Hint; maybe NBC and Hulu should partner for a Hulu exclusive show.)
It’s not just simple cannibalization, but one that involves a very powerful distribution partner – cable companies. Cable companies provide literally billions of dollars in revenue to content providers. Content providers ofcourse would like to have multiple ways of distributing their content, especially if the new methods of delivery provide them a leverage over their customers – namely the cable companies. However, all these alternate methods of distribution are anemic at best. None of these match the reach and quality of paid distribution channels like cable. However strong content owners desire may be to gain leverage over cable companies, they also realize that their bread and butter is coming from them in the form of billions of dollars. It is unlikely content providers can overcome the power of their distribution partners (aka cable companies) any time soon. Cable companies have one more trump card – they also own the pipe on which the Internet based alternate distribution has to work. Unless there is powerful regulatory intervention, it is unlikely content providers will go out and enable companies like Boxee. It is not that they don’t want to, but they will get an earful and more from their most powerful customers whose revenues are threatened by these alternate forms of distribution. And these customers have leverage today because they pump in $ Billions to these content providers. It will be good if VCs fund sustainable business ideas rather than flash in the pan type ideas which fail at the first business challenge. Boxee as browser for TV are all BS. If it is a browser, why cant they reproduce everything on the web page including the synchronised display ads, clich thru web pages and everything? In this whole mess it is the advertiser who is also getting ripped off since the advertiser doesnt get the eyeballs on the ads sorrounding the video (not the embedded ads) but pays for it anyway.
I’m surprised people care about watching Hulu on their tv. I tried watching Hulu on a large 1080p television (via a browser, not Boxee), and the video quality is too poor to make for an enjoyable experience. I’ll gladly keep paying for cable.
really? I find it totally acceptable (when the stream doesn’t constantly hiccup) given the availability of current content at significantly lower cost vs. paying for cable/satellite TV service or subscribing to Netflix or buying from iTunes. that said, for action movies I prefer to pay for the higher quality/reliability of iTunes or DVD.
See post by Ed Felten at Princeton http://freedom-to-tinker.co…
Great link and great blogthanks
Fred,I have been reading your blog since about 2004 …great posts & insights…been trying to get my friends at Calculated Risk <http: http://www.calculatedriskblog.com=“”/> & NakedCapitalism <http: http://www.nakedcapitalism.com=“”/> to adopt Twitter at least tothe extent of using Twitterfeed <http: twitterfeed.com=””/> but its been a tough sell sofar read this post<http: http://www.nakedcapitalism.com=“” 2009=”” 02=”” twitter-communication-and-my.html=””>by Yves Smith to see what I am up against! I even asked Jack,Ev<https: twitter.com=”” empressario=”” status=”” 1174713303=””> , and Biz to comment on her blog but didn’t see any comments from them yet. Any input to her would be great! Thanksagain for your reply. Here’s are my notes on — What isTwitter<http: docs.google.com=”” doc?id=”dcvrgm3v_202crxgcndx”>?DwightMeltdown 2008 <http: meltdown2008.blogspot.com=””/>
I don’t see a link anywhere
Hulu certainly appears to have a more dynamic experience with Boxee, how can Hulu decide that the content selection on Boxee isn’t working out for them, how can old media step in and go “Whoa, we are moving just a bit too fast, becoming a little too innovative, let’s pull back”. Let’s face it people aren’t as dumb as the media companies think they are, lots of people are connecting their computers to their TV’s and playing Hulu content (http://radar.oreilly.com/20… through their web browser, see this is the point when the old media and new media should merge because the majority of users are booksmart about these things. If the old media can just wake up and realise this, then our enjoyment of this media content can continue to grow out to new outlets!
Some excellent comments here already. I wanted to write yesterday, but was offline all day, so here’s my late-to-the-party contribution.1. I’m sure you’ll agree we’re already in the “attention era”. And surprise, it’s competitive. TV’s long-dominance is threatened by competitors like videogames/YouTube/the internet in general. The “content providers'” (aka Big Media’s) competitive advantage is in creating compelling content. Hulu is a distribution channel, and putting up ANY barriers to consumption weakens their ability to compete. The content providers have hobbled their own horse. (Sidebar: is it misleading to describe Fox and NBC as “content providers” as they are networks too?)2. To me, Boxee served two important roles w/r/t Hulu. First it was a “skin” for the 10 foot experience. Second, it promised a centralized future in which content providers (Hulu, YouTube, Netflix, etc) are aggregated into a unified interface. BUT… if Hulu really “wanted” this, they would have provided an API that would encourage innovation while retaining some control over how “their” content could be repurposed (possibly requiring data in return). While I applaud their website offering, they really should have dealt with the API issues, creating a platform for delivering their “channels”.3. DVRs are a threat to content providers. Hulu’s ads are much shorter than a typical broadcast—perhaps a concession to the points in #1 above? One important difference is that Hulu controls the stream, so unless you cache it (wrap their player?), it’s hard to skip commercials. Maybe this means nothing, as in time this probably gets circumvented, but at least in the short run it turns the DVR tide slightly (i.e. Boxee people would watch more commercials than Tivo people). Furthermore, consumers can keep Tivo episodes as long as they want (ignoring broadcast flag issues), whereas Hulu viewers can’t.4. I was most struck by the Disney quote on the Hulu blog announcement. Has there been any company more fixated on controlling its content than Disney? Big Media must embrace change or suffer through the throes that the recording industry finds itself in.
Isn’t this sort of about controlling delivery – which while a dying concept – is still worth pursuing if you’ve got content streaming through your services?
seemed hard to enforce if you’re still distributing to any browser, and sure enoughLifehacker – http://lifehacker.com/51576…might seem like Hulu, after coming from nowhere to get tremendous traction v. YouTube , gets hamstrung by the content provider who prefers extending analog revenue stream by a few months v. owning a stake in the digital future.or alternatively, content providers cleverly throw a sop to cable companies, knowing it won’t matter anyway.either way, will make a hell of a case study
Couple of points…Technical: The webkit browser (safari) allows easily for a script to go directly to Full Screen from Play. It also allows cloaking such that there’d be no way to know what browser you are even using.Hulu side: I think everyone should first admit how much they’d care about Hulu if the number of ads increase 2x 3x… because at any level of scale, thats coming.Ad supported content: Ultimately the best way of reducing the the number of ads you need to see to “pay” for content, is to expose as much personal data about yourself as possible. This rule is manifesting itself as we speak… here’s your basic math: 16 ads per half hour * .015 cents = 24 cents. Expose enough data, and some people will watch that show with only 1 ad.Cable side: Cable is a great deal. All in total communication (triple play) still costs less than it costs to heat your home, lease your car, (and for many people) drink your Starbucks.Nice comment on the low cost device Fred 😉
Here is the real problem for Boxee. I have Boxee Alpha on my AppleTV and have been a frequent user. Boxee with Hulu great…Boxee without Hulu…I don’t think I’ll use it again.Unfortunately Hulu’s move feels much like my experience with Tivo and DirecTV. I LOVED Tivo. Resisted going to the DirecTV DVR. Complained to DirecTV about their strong-arm’ing of Tivo. Spent a bunch of money to keep and upgrade my Tivo(s) but finally, just this year, gave up and moved over to DirecTV HDDVRs. I absolutely hate them. It has ruined my viewing experience, the interface stinks, I watch less of the shows that I used to conveniently get through Tivo.My gut tells me that Hulu is Tivo’ing Boxee. Best of luck to those boys but I think they need to start looking over their shoulder. Something is coming.Signed…a disappointed Boxee’r.
We are going to try hard to insure it is not soIn the meantime, Lifehacker has some ideas for youhttp://lifehacker.com/51576…Remember that Boxee is software and like Firefox, it’s a browser that has anextension architecture
I’m always amazed that you respond to most of the comments you receive. It is impressive.Completely playing devils advocate. Sure, Boxee is software…so is Tivo (though they have an appliance they deliver it on top of). But when so-called partners block added experience, say like directv disabling the wireless functionality in the Tivo software, they can collapse the value of a product. You can always ‘hack’ these things but lets face the fact that most consumers just want the stinking functionality out the box. Buyers are consumers of features/functions. I’m not sure that I agree with your browser positioning, though I understand why you are going that route.The extension concept of the product has always gotten an, oh man this could be cool, reaction from me. Looking forward to the additional extensions that get added into the product and I hope big media doesn’t kill them before it happens.BTW. I’m going to use the lifehacker hack. Guess who Hulu is going to go after next…
Open source software FTW
I got here late — but, your photos really put emphasis on the point I’ve been trying to make: what’s the difference between using Safari or Firefox and using Boxee?Which begs the question… how can Hulu actually block a particular browser? That’s basically what it’s doing… Not the technical how, but with what right do they have to do that sort of blocking? Seems to me Boxee could easily enable playback in other ways to circumvent this… hopefully it doesn’t have to resort to that. After all, in each case, Hulu is simply flash content to be played back in a flash browser. I can even use the flash browser on the PS3, which is designed for TV use…