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Hulu.com is going to great lengths to block boxee from accessing its “service,” and its self-serving justifications aren’t helping.

Yesterday The Unofficial Apple Weblog and other sites spread the news that web video provider Hulu.com forced the developers of the media player boxee to remove Hulu’s content from their app. Hulu’s CEO gives his version of the story on the hulu blog, and boxee’s developers explain it on the boxee blog.

In case that means nothing to you: Hulu.com is a website owned by NBC Universal and Fox that streams TV clips and full episodes, as well as some movies, from those two companies and its subsidiary studios (and a few outside affiliates). Boxee is an application that aggregates local video, music, and picture files along with sources from internet sites like CBS.com, ABC.com, Netflix streaming, and (formerly) Hulu. There is some social networking stuff added (you can see/mock what your friends have been watching), but it’s a safe assumption that the main draw of boxee for most of its users has been access to various web-based video sites under a consistent interface. And most importantly: the interface doesn’t require a mouse and keyboard, so it’s good for watching video on a television; and it’s an open platform, so it’s been ported to various devices that can easily be connected to a television. It’s pretty painless to install it on an Apple TV, which means you can watch recent episodes of TV shows in full screen on your home theater with minimal ads.

Everybody — including, ostensibly, Hulu’s CEO himself — is dismayed by the development, but of all the comments I’ve seen, only Christopher Breen at MacWorld seems to see through the self-serving nature of that Hulu blog post. The CEO talks about “hard decisions,” and how it all comes down to pleasing “the content providers.” But Hulu is owned by NBC Universal and Fox, who are the providers of all of the content, with very few exceptions (e.g. Dr. Horrible’s Singalong Blog). For him to refer to them “content providers” is like a high school kid referring to his parents as “the couple I live with.” It’s just an attempt to deflect the blame at some mysterious, unreachable Tight-Ass Suits Up In Corporate, without having to acknowledge that no, your bosses told you to do something and you did it.

boxee still includes ads just as if you’d watched via a web browser, so it’s not a question of removing a revenue stream. What it suggests is that somebody at NBC Universal or News Corp has seen the licensing deals for Netflix boxes, Netflix streaming over Xbox 360, rumors of TVs with iTunes pre-installed, and the like, and are wanting to keep pushing their vertical integration. They want you watching their content on equipment they sell (or from a manufacturer who pays them plenty to license their content). That completely violates the idea of starting a website with all your content in the first place — and spending millions to advertise that website during the Super Bowl — but nobody’s ever accused “content providers” of understanding what customers want. Which is exactly what that Hulu blog tries to take advantage of.

So what everybody must be wondering is: how does this affect Chuck? As it turns out, not as much as I’d initially thought. Hulu support on boxee has always been pretty weak, to be frank. Stuff would show up on the hulu site without showing up in boxee’s main interface unless you did a search (and doing searches with a remote control is painful). Pausing, rewinding, and fast-forwarding has been unpredictable at best on the main site, and is even worse in boxee. Support for other sites — Comedy Central, CBS.com, and ABC.com — has been more solid; Hulu was a weak wrapper around the website’s interface, with the only advantage being that it had tons of content.

And what’s that content? “Heroes,” which has gone past enjoyably bad to just bad. “Saturday Night Live,” which would only include about 15 minutes’ worth of clips. “Monk,” which is ending soon. “Psych,” which is a genuinely good show, but not necessarily anything I couldn’t wait to see on its eventual DVD release. “30 Rock,” which I’m already getting on iTunes because I want to “vote with my dollar” instead of watching it for free. And “Battlestar Galactica,” which is ending soon, has kind of gone downhill, and is pretty near unwatchable streaming because the space scenes and all the dark gray corridors all become a jumble of pixels.

So the internet can rest assured that I’ll be okay. What’s clear is that whoever at Hulu/NBC Universal/Fox made this decision just don’t understand how new media works, and — even worse — are convinced that they do. What’s interesting is how users will react: this can easily be interpreted as the usual “we used to get it for free” whining, and some people will undoubtedly threaten piracy. Which is a shame, because this is exactly the kind of use scenario the whole valid side of the DRM argument hangs on: emphasizing the value of content, instead of the manner in which that content is distributed. This isn’t the case of stealing something I’d normally have to pay for. If I can watch something for free full screen on a web browser, then the studios aren’t adding any value by “letting” me watch it on a television.

6 thoughts on “Content Withholders”

  1. What’s clear is that whoever at Hulu/NBC Universal/Fox made this decision just don’t understand how new media works, and — even worse — are convinced that they do.

    I worked on the Netflix streaming project, and I can tell you that it’s a lot more complicated than it needs to be, and the reason is it comes down to the contracts. Even though NBC is the “content provider” they are still, in most instances, licensing it from a production company, who in term is licensing certain parts (the theme song, for example) from even more entities. Throw “big name” stars into the mix and you’ve got even more legaleeze to deal with. And quite often there’s unique terms in every contract. Throw one oddball term in there — say Bille Joel’s contract for “My Life” being used as the Bosom Buddies theme song (season 1) says it won’t allow the song distributed through “less than FM quality audio” — and you have yourself a problem. The big media companies are getting better at getting their ducks in a row when contacts are concerned, but it’s far from perfect and they still aren’t very savvy. For example, HBO pays millions for the “TV” rights to a movie. Netflix get “streaming” rights for the same movie. But then Netflix goes and licenses products to show their streams on TV. Depending on the dots and crosses of the contract, there may be some infringement going on here. And my bet is this is a similar issue with Hulu. In short, I don’t think this is as simple as “A suit at NBC doesn’t want the content on Boxee”.

  2. That’s what Hulu’s CEO is trying to make it out to be: “it’s difficult and complicated.” But this isn’t like boxee or Netflix or some third party trying to break into the distribution process; this is an NBC/Fox owned company trying to blame the issue on NBC/Fox. They already deal with music licensing issues on Hulu — that’s exactly why they only have clips of SNL instead of entire episodes. When you’re dealing with companies named NBC Universal and Fox NewsCorp, it becomes pretty clear that there’s only a few corporate entities in control of everything, and they’re running out of places to point fingers. (Whether the left hand knows what the right hand is doing is a separate issue, but regardless that’s not something that the customer should ever be concerned about).

    And when I say “don’t understand new media,” I’m talking about exactly the thing you mention: not understanding the differences between content, distribution, and eventual viewing. Streaming is streaming, whether you’re watching it on a web browser on a PC, a web browser on a TV, or boxee on a TV. That’s not the same as broadcast, and it’s not the same as DVD release (each of which can be viewed on various devices). That’s my whole point: making distinctions between the destination of the media is completely failing to understand how new media is going to happen.

  3. Um, yeah, um, it seemed to me that Lemoore’s point was that “understanding how new media is going to happen” doesn’t change the fact that the blurring of boundaries between destinations makes a big tangle out of a lot of existing legal agreements.

    The situation you seem to suggest is that the fat cats are sitting there chuckling, saying “Oh yeah baby, Hulu is grabbing eyeballs away from iTunes and YouTube, yeah baby yeah baby yeah HEY WHOAH NO FAIR WATCHING IT ON YOUR TEEVEE!” Which sounds likely, I’ll grant you. I can believe it.

    However, it’s also credible to me that the situation is one where the skinny cats are sitting there fretting, saying “we’re losing ad revenue hand over fist and our entire business model seems to be evaporating before our eyes and at least maybe this Hulu thing is kind of working, who knows, and what’s this memo here from legal OH DAMN WEVE OPENED OURSELVES UP TO A KAJILLION LAWSUITS ABORT ABORT ABORT.”

    As you said, though, it’s sleazy to pretend that it’s a “my boss made me do it” situation, no matter what.

    I would love to know more about what you think the right side of the DRM argument is, and how it could be applied intelligently in this case. It’s such a wicky sticket.

  4. Oh I think I see. I’m talking about “understanding new media” from the point of view of the consumer, which is where I think both the big media companies and the rabid anti-DRM types are getting it wrong. I’ll gladly admit that I don’t understand how it works in terms of subsidiary production studios and per-stream royalties and the like, because as a consumer, I neither need nor want to.

    In essence, I was agreeing with Hanford although it didn’t sound like it. Whenever I hear someone say that the situation is complicated, my first response is that no, it really isn’t. There are creators, distributors, and consumers. Each part has a responsibility to add value to the transaction.

    Anything more complicated than that, and you’ve got a situation like the RIAA has been perpetrating for the last decade. When you’re arguing positions like “ripping a CD to your computer violates the EULA,” that’s something that can only be defended through elaborate legal wrangling, and it makes no sense to the consumer. When the consumer doesn’t understand what he’s paying for, then he’s not going to pay it.

    Where the anti-DRM arguments go off the deep end is when they stop acknowledging the value of every point in the chain: in particular, distribution. When you hear “average people” on the internet — i.e. most users, and not the shut-ins who get off on piracy for its own sake — they’ll frequently talk about wanting to pay the creator of a work. But you never hear “I want to make sure that the hundreds if not thousands of people who worked in promotion, advertising, production, and distribution are compensated for their work, too.” Because it’s invisible to them.

    And in the case of Fox and NBC’s Hulu, a stream I’m watching via my Apple TV is the same as a stream I watch from a web browser. They’re not adding value to the leap from my desktop to my couch; the developers of boxee and the Apple TV installer are. (And they’re not asking for money). If it’s not a distinction to the consumer, it shouldn’t be a distinction to the providers, no matter how many volumes of entertainment law are involved.

    I think that the old “people who steal [software/music/movies] aren’t the ones who’d buy it anyway” argument is mostly bullshit, but there is a kernel of truth to it: whether it’s naive or not, I think that most people do want to “close the loop” and make sure the creators of something they like are compensated. Where the media companies are getting it wrong is failing to acknowledge that it’s that link between distributor and consumer that’s important, not the link between distributor and PC, distributor and iPod, distributor and TV, distributor and satellite dish, etc.

  5. And when I say “most people want to make sure the creators are compensated,” of course what I really mean is most of the people who matter. There’s obviously no shortage of people who have no problem stealing content and finding increasingly convoluted ways to rationalize it on account of its not being a physical product or some other B.S.

    But the real customer base that you can count on aren’t the shoplifters, but the people who are happy to buy your product, but don’t understand why they have to pay you multiple times for it, or why you won’t let them wear it because they’re in their living room or because they live in a different country.

  6. You make some really good points I hadn’t heard before.

    I’d guess some of the failure to “get it” comes from the fact that the networks never really had to sell things to consumers before. Their business is built on selling to advertisers–in a lot of ways, viewers weren’t actually their customers, they were more like their product.

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