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.

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.

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.

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.

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.

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”.