Hulu's Blocking is Not a Strategy

Just posted on Bob Garfield's TheChaosScenario.net:

By Dorian Benkoil

It’s odd that Hulu doesn’t let Boxee easily put up its material. Boxee, if you’re not one of the swelling ranks of digerati, is a venture capital-backed open-source software project formed by an Israeli former military computer coder and his friends to let folks listen to, watch and tell each other online about all the videos, music, and photos they’re consuming. Boxee, which is in its early “alpha” testing stage and already claims 500,000 members, wants to create a “lean-back” experience for those who want to use a remote to easily click on whatever they want -- Netflix on Demand, iTunes music, YouTube, family photos from the laptop -- in a seamless interface that looks nice and avoids tons of mouse clicks and typing. And to do it on a TV, if they want, by hooking up the computer to the TV. Boxee, which by Fall plans to emerge in “Beta”, has been working on deals with various TV-connected device makers (like Roku and AppleTV) to bring their software to even more of the masses.

Hulu, of course, is the joint venture of three major TV networks to put their programming online, and, in the process, serve lots of high-priced ads in a format that can’t be skipped or TiVO’d or otherwise avoided. (Word is, that at least some Hulu ads, on a per-viewer basis, as of last month started costing more than similar ones on TV.) But for some reason, Hulu doesn’t want Boxee to make Hulu programming (everything from movies to popular shows like The Simpsons, Desperate Housewives and The Daily Show) available on Boxee. Apparently, the masters of Hulu don’t want to make the site readily available on Boxee because not only do they lose some control, but also because people might then be more inclined to watch TV programming via Hulu rather than over their cable, on-air or satellite boxes, for which the TV network folks spend tons of time and money negotiating rights, deals and so on. Boxee does have a workaround -- you can put Hulu’s RSS feed in your Boxee profile and get at least some of the programs that way. It’s more cumbersome than the Boxee grid that shows little expandable squares amalgamated on a screen.

But there’s another really easy way to watch Hulu on your TV: plug the laptop into your TV without worrying about Boxee. I bought a $24 connector (Boxee CEO Avner Ronen quipped that I’d “overpaid”), and my children and I have watched tons of programs through the computer on our large-screen TV over our wireless home Internet network. I set up a mouse and speakers and everything, and many’s the time my children lie on the couch watching their favorite shows without going through our digital cable box. It took me a little time to rig up, but it was worth it to give them the access they wanted (which, by the way, is often commercial-free), whether over Hulu, Netflix-on-Demand, YouTube or whatever.

So, while I do understand the possible business rationales for Hulu telling Boxee to not put them in their easy-to-use grid -- they want to control the user interface, they want to be compensated, they don’t want cable TV providers like Time Warner and Comcast to think of them as facilitating an “end-run” -- it’s a short-term protective game for which there’s an easy workaround. It’s more a blocking maneuver to preserve an existing model than a real, long-term strategy that could succeed over time to get loyal Hulu viewers.

Ronen, who’s very plain spoken and always willing to say things that will cause heartburn to traditional media execs, talked about some of this on my show Naked Media last week, appearing with former HuffingtonPost CEO Betsy Morgan. He said he’s talking to everyone he can at whatever network but gets tied up in a lot of wrangles over rights and such. His ultimate goal, he said, is to be the software that drives any and all connected video devices, whether the Roku box or a set-top cable box. And, he says, Hulu should be glad to be in the Boxee system, because his users will send them more traffic, and get more viewers for their programming and ads. He’s agnostic as to the model of the provider -- if someone can only access programming via subscription, he’s happy to provide it that way. He says that by early next year Boxee hopes to even have a payment system in place. The episode of Naked Media will be available on demand soon, and in iTunes.

Coming Soon to The Chaos Scenario

Starting soon, I’ll be contributing to Ad Age columnist, On the Media host and industry gadfly commentator Bob Garfield’s new “Chaos Scenario” Web project, TheChaosScenario.net. More than an attempt to sell his book of the same title (which it is), it’s an attempt to do something important, at the very least chronicle the severe disruption that’s wracking media across disciplines. There are no safe corners I can think of. Even once-protected pockets like paid cable TV are trying new models, such as TV Everywhere (a significant part of the discussion yesterday with Avner Ronen, CEO of Boxee and Betsy Morgan ex- of HuffPost, on Naked Media -- on demand version will be live soon).

The creative work is harder and more crucial than ever, the barriers to entry lower, the opportunities to block competition or claim exclusive turf more challenged than ever. Anyone can come along and, with hard work, smarts and energy, launch a blog or VLOG or Facebook page or YouTube channel that picks off a choice portion of your audience. True, they may not have the brand or the distribution or the heft -- yet. And major media companies are acquisition engines as much as anything, these days. Just type in the name of any major player and variants on the word “acquire” to see how much news pops up. But the protected environments that let TV and newspaper and magazine salespeople demand high fees and continued business from marketers, as well as pricey subscriptions and per-use fees from consumers, are eroding fast.

Check out Bob’s video, from his site, for more.