Thoughts On The Boxee-Hulu Saga

boxee_huluThe blogoshere is abuzz today about Hulu pulling its content from Boxee at the request of it’s content partners and owners, NBC and Fox. TechAviv NY member Boxee, in case you’ve been comatose for the last 6 months, is the new open source social media center phenom that is taking the Internet by storm with over 300K alpha testers in its first few months. The controversial decision is fueling a wave of understandable emotion by Boxee and non-Boxee users alike. This is an explosive topic because it touches the sensitive and intertwined issues of consumer and content rights on the Internet. I’d like to share some perspective as the founder of a web video organization and as an advisor to both TV networks and Boxee.

First of all I commend Boxee CEO Avner Ronen and Hulu CEO Jason Kilar on the thoughtful tone of their blog posts (here and here) on the matter. These are two smart young guys on the bleeding edge of the new media revolution. Take a moment to read their posts and comment exchanges in the blogosphere (here and here). Pay attention aspiring CEO’s, this is leadership. They both want Hulu on Boxee and in front of millions of leaned-back TV viewers. NBC and Fox also want their ad-supported content viewed by as many people as possible.

So what’s the problem here?
Many point to the technical and legal differences between a standard browser streaming a video on your TV and Boxee. Others opine that legacy TV distribution contracts are crippling Internet delivery to TV sets. Some say big media is just afraid of anything new they can’t control, own or fully understand.

All the issues combined have confused executives at the powers that be but there is only one real factor that directly dictated this move; Money. Cable companies are losing a boat-load of it due to the recession and because services such as Boxee make it easier to watch quality TV over the web, on your TV, for free. What they don’t realize yet (they’re getting there, just slowly as usual) is that they are in the best position to monetize such interactive services by offering them via their entrenched set-top boxes. All their new boxes have the technical ability to connect to the Internet. Glance back there. You’ll see an empty Ethernet port. Your cable company is just waiting to figure out what to do with it so as not to cannibalize the biggest portion of their “triple play” subscription revenue: TV. What they know is that they can’t compete with the Boxee’s of the world on the software and innovation front. What they should be doing is talking to Boxee about licensing and embedding their best-of-breed media center software on their boxes. It will be a while before that conversation happens and in the meantime, in an effort to give themselves time to think, they’ve most likely pressured NBC and Fox to request Hulu pull their content from Boxee. Hulu really has no play in the matter. Its at the mercy of it’s owners. It’s a real shame that these mistakes keep repeating themselves as fear, ignorance and greed slow the path of consumer-driven innovation.

Peter Kafka of AllThingsDigital nailed it in this post and interview with Avner:

Boxee is going to come out of this story as a powerful poster child of the new era of Internet TV. They are the innovative underdog disruptor and this the best press their mission could get. These guys are the real deal. The cable companies and TV networks are going to get a black eye once again for failing to embrace unstoppable consumer demand and the inevitably evolving nature of their business models.

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Categories: Innovation, Startups, Video

8 Comments on “Thoughts On The Boxee-Hulu Saga”

  1. February 19, 2009 at 1:33 pm #

    You'd think all the people involved on the networks' side would figure out how to take advantage of a hot, new technology like Boxee rather than freak out. It's not like the whole TV-web convergence is a new phenomenon. What a shame.

  2. Fanfoot
    February 20, 2009 at 6:41 pm #

    Boxee is dead. The big media companies won't win this war of course, we just have to first wait to see what they kill (PlayOn, ReQuest, even Windows 7 Media Center?) and what they don't. Once that's done the open source guys will figure out how to fake it so that you can still access Hulu on some STB by doing the appropriate LYING to the host to make it look like you're using a standard browser. Then the media companies can decide whether to kill web video completely or NOT. And the ball will just have been moved downfield about 6 months.If they do try and kill it they will repeat the music business mistakes. And they'll be dead. Not soon. But in the long run they'll be dead.Everybody under a certain age already knows how to use torrents and they're highly motivated.If they figure out how to monetize this stuff over the top, and do it quickly enough, they have a chance. Hulu is probably dead too unless they can get their ROI up to parity with cable. And even then they might still be dead just for being too early (again?).And just so its clear, anything involving a cable company STB is simply a waste of everybody's time. That's not the answer anybody wants. And it will take so long to develop and be so broken when it shows up there's no point in even caring about it.

    • February 20, 2009 at 8:09 pm #

      Wow, that's a lot of death. Who lives?

      • February 20, 2009 at 10:58 pm #

        Cracked me up! Indeed a grim picture.

    • February 20, 2009 at 10:57 pm #

      (fanfoot:) “Boxee is dead”Even if it can't play video from web-streaming partners (arguably one of the coolest aspects of it), it's got its own torrent browser, can play local media and podcasts. Losing “authorized” web video won't kill it, just drive more users to BT (or other gray-area streaming sites) so they can load it up in Boxee.Very interesting blog post, best analysis yet.

      • February 21, 2009 at 8:03 am #

        Thanks wazungu. I agree, its unfortunate but people will find a way to get the content one way or another. Hulu just makes it easy enough that people are happy to watch the ads and everyone wins. They are to TV what iTunes is to music. The model works online. Now the cable co's just need to realize the new opportunities of their ideal position in the supply chain and let go of the outdated business practices that only hurt them in the end.

  3. February 20, 2009 at 8:08 pm #

    Wow, that's a lot of death. Who lives?

  4. February 21, 2009 at 3:03 pm #

    Thanks wazungu. I agree, its unfortunate but people will find a way to get the content one way or another. Hulu just makes it easy enough that people are happy to watch the ads and everyone wins. They are to TV what iTunes is to music. The model works online. Now the cable co's just need to realize the new opportunities of their ideal position in the supply chain and let go of the outdated business practices that only hurt them in the end.

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