Hulu's Superbowl Ad and the Boxee Fight

[A note to start. My company, Wesabe, is funded in part by a venture firm, Union Square Ventures, which is one of the funders of Boxee, a character in the drama described below. That said, I’ve never met or spoken with anyone from Boxee, and have only ever talked to Union Square about them to ask for an invite. I don’t have any access to any inside information about Boxee. This post is based instead on the time I spent working at Lucasfilm from 1997 to 1999. Well, really, the following isn’t based on Lucasfilm itself, but instead on my conversations with the major studios (of which Lucasfilm is not one — Fox/Disney/etc., who control distribution, are) about this topic of video on the Internet, which was just starting to be hotly debated at the time.

Some of the comments below also come from participating in discussions about copy protection and Divx, which, if you’ll remember, was at that time a self-destructing DVD-like format that would let the studios control how long you could watch their entertainment. No, seriously, it started to self-destruct when it was exposed to air and these people all thought it was certain to win over DVD. Wrong, but instructive.]

The secret to understanding why Hulu‘s “content providers” — and boy do they love being called that — have instructed Hulu to block Boxee users from their “content” — again, not what they would call it — isn’t some big secret. In fact, it was broadcast during the Superbowl, in Hulu’s excellent Superbowl ad:

[Update: I’m told you can’t see that embedded video unless you live in the US. If you don’t, can you see this YouTube copy? I’ll laugh if that works. Let me know. Update again: Yeah, you can watch the Hulu ad from anywhere on YouTube. That’s awesome. It’s even Hulu’s YouTube account that posted it!]

Here’s the relevant part, as spoken by Alec Baldwin:

Hulu beams TV directly to your [sardonic gesture to the camera] portable computing devices, giving you more of the cerebral-gelatinizing shows you want, any time, anywhere, for free.

Emphasis added: portable computing devices. Not to your TV — from your TV. To your dumb-ass laptop, you smelly, hairy, friendless, gamer-freak nerd. (Sorry, I hate to talk about you that way, but that’s how they think of the Internet. I think you smell great.) To your TV is something completely different, and from the “content providers'” point of view, completely wrong. Aren’t Apple and Tivo and YouTube bad enough as it is?

Boxee was featured in an awesome New York Times article one month ago, with a picture of their product on a big-screen TV, and Hulu’s logo clearly visible in the upper right corner. I can almost hear some lawyer somewhere in Hollywood screaming, “I thought Hulu was a WEB SITE! I do NOT see a WEB BROWSER in this PHOTOGRAPH!” at the sight of it. Boxee’s blog post on the controversy says they heard from Hulu about this two weeks ago; I’d bet Hulu heard from that lawyer two weeks before that — the morning the article appeared. Those calls are fun.

You’d think the “content providers” would know already this — Boxee — would happen; even with Hulu gone from Boxee, I can still watch Hulu on my TV, albeit with a much lamer interface. Hooking a computer to a TV is easy enough. Maybe they did know, and just waited to see how Boxee would get along until it got too high-profile to ignore. I doubt it, though. Most entertainment lawyers don’t go for the idea, “Let’s allow it for a little while and see what happens.” They instead argue, “Let’s stop it immediately and see if we have a better option we can control more, later.” I’d guess Hulu had a deal to show “content” on computers, and the “content providers” balked when those computers started talking to their precious televisions.

So why does Hulu exist at all? Hulu must have seemed like the “better option” for getting people to watch TV ads on their computers — better, perhaps, than the iTunes Music Store selling the same “content” piecemeal and getting price control over video as they have for music. Or, perhaps, than YouTube, selling and showing ads without the studios necessarily involved in any way. Let’s control ads on the Internet by putting them on our “content” through Hulu, an entertainment industry company, not a smelly nerd company. Great. It’s a plan.

Maybe BitTorrent came up in the discussion, but I doubt it — BitTorrent is for smelly nerds. This isn’t about you folks. This is about the mass market. Those people can’t be disrupting their TV watching with some WEB SITE they saw in the NEW YORK TIMES.

So that’s my guess about why Hulu blocked Boxee: those ads you see on Heroes are higher margin when you see them on your TV than when you see them on Hulu, and the only reason they’re on Hulu is to make money from Heroes when you watch it online, so Apple or Google doesn’t make that money instead. They were meant for your “portable computing devices” and not your precious TV. Now go back to the couch until we call for you again.

I’m sure Hulu is totally pissed. They pretty much said just that in a somewhat more stilted way. The real insult, though, is calling the people who made them cut Boxee off “content providers.” They might as well have told the studios they are the moral equivalent of the guy schlepping reels around the projector booth. Someone will win this war eventually, they seem to be saying, and you could have helped make it us. Now you have a choice: someone else — not you, someone smart — will win instead, or you can change your mind.

That’s pretty much my view, too. DVDs (mentioned in the note at the start) became a big boon for the studios, once their crazy ideas about self-destructing Divx discs went the way of the Dodo. The studios have a very long history of betting against technology people want, and on technology people don’t want. This is just another such case. The technology people want always wins in the end — no duh — and usually benefits the businesses who fought that technology to the death. Here’s hoping the technology people want — Boxee — doesn’t wind up benefiting the studios fighting it now.

  • Amen. I really liked watching hulu through boxee while it lasted. It’s a bummer to go back to the web interface.

  • Steve

    I think you nailed it with your last paragraph. The “studios” or whichever group represents them consistently tries to stop inevitable technological evolution. I think Boxee is more appealing/superior personally. It’s interesting to stay on top of the newest battle these guys get themselves into. Reminds me of the ongoing digital security battle I keep up with at

  • amen, thank you very much

  • Well said. The brain damagedness of large corporations never ceases to amaze me. In the meantime, I guess I’ll just litter my TV’s desktop with links straight to all the shows I usually watch on Hulu :)

  • I can’t watch the video you embedded. Hulu stuff always shows black and an “Only works in the United States” message here in Germany.

  • HAVOCtheHedgehog@ETQW

    ummm if it wasnt for Boxee i would have never been to hulu’s site, and prolly still wont.. if it worked once im sure and unauthorized plug-in will appear *cough* =D its as if the ad’s were cut or we could pause the stream…

  • Kevin

    Another interesting thing to point out is the Understudy ( plugin from google which lets you watch hulu and netflix from right within Front Row, which is explicitly marketed as a way to enjoy your media on your television.

    I’d say grab a copy now while it still has support :-)

  • Dave

    DiVX was actually a format that used a special player connected to a phone line. You’d purchase a movie, it’d play for like 48 hours and then you’d have to pay if you wanted to watch it after that or on someone else’s player. Circuit City came up with this awful idea. The discs didn’t self-destruct, that was another awful idea.

  • Anonymous

    A minor correction:

    DIVX (the DVD-related product, not the video codec) did not self-destruct when exposed to air. Rather, it used special DVDs and players that only played the discs when permitted by the studios. The players had modems to connect them with servers to check for permission, and there were several tiers of service available per disc. A customer could buy a DIVX disc, but would only be allowed to watch it for a couple of days after the first play, before the player would quit. The customer would then have to pay additional fees to play it again, possibly upgrading to a more expensive tier of service allowing more plays for that specific disc. It can probably be more accurately thought of as a way to rent movies without either having to return them or get new copies of the movies periodically. Or being rather Pay-Per-View like.

    What the author was confusing this with is Flexplay, which is still in business (I saw a spinner rack of their discs the other day), which uses special discs that will play in any ordinary DVD player (as opposed to DIVX, which only worked in DIVX players) but which are coated with a chemical that turns them opaque to the lasers in those players after a couple of days’ exposure to air. Flexplay, in fact, came along years after DIVX had crashed and burned and it was hoped that it would succeed; so far, not really. Flexplay differs from DIVX in that the former plays in ordinary players, but is totally incapable of being used after a few days, when it turns into trash. The latter required special players, additional fees, and permission from the studios, but theoretically could last longer. DVD-D was a similar product.

  • David Neal

    “Content providers” have been dragged kicking and screaming from one buckets of cash producing technology to the next… player piano rolls, phonograph records (vinyl and acetate), cassette tapes, VHS VCRs, and DVDs were all protested as destroying jobs, destroying the industry, destroying revenue streams and in each case yielded huge payouts. Seriously the MPAA’s Jack Valenti compared VCRs to a serial killer with regards to its potential effects on the movie industry. Since his comparison we’ve had box office revenues explode (wide release, foreign syndication) and one can argue the larger interest in movies comes from the larger audience thanks to VHS and DVD.

    It hasn’t occured yet to the providers apparently that there may be people who exit purchasing cable TV or media from other classic providers (satellite, over-the-air) and only have cable service for the cable modem so that they can download and/or stream content. In fact in 20 years the cable-tv providers should really just be big dumb distribution systems for streams coming straight from the “providers”, because that’ll be the only way to capture those eyeballs. They haven’t gotten it yet. They will.

  • James

    I watch Hulu exclusively through Boxee on my Apple TV (well i did) and canceled my cable/sat subscription months ago – even before Hulu support was great on Boxee… and bough an antenna and HD receiver for OTA broadcasts.

    I have no interest in watching TV shows on my laptop or PC. I want to watch them from my couch on my HD TV with a remote in hand to play/pause, etc.

    I hope the content providers are listening (Hulu too) because I will never ever pay for cable again with it’s current business model (if they go a la carte maybe). I will instead go back to what I was doing before good Hulu support on Boxee… download Torrent files from an RSS feed directly through Boxee on my internet connection while I’m at work… so I have a full lineup at home waiting for me in the evening. It took 15 minutes to figure it out – very simple and easy, not geeky at all.

    I like Hulu – ad supported content over my internet connection. I already pay for a good digital content delivery service – I won’t pay double for the same service just to watch it on my TV AND have to sit through ads.

  • Well said.
    After all to the media industrie this whole “internet thing” doesn´t serve any other purpose than to spread their Advertorials.

  • RR

    > In fact in 20 years the cable-tv providers
    > should really just be big dumb distribution
    > systems for streams coming straight from the
    > “[content] providers”

    Cable TV has been this for decades. The “content providers” want “internet” to be this, too.

  • joem

    I think you’re a little wrong. Calling their content providers “content providers” is no big deal. Hulu has been calling them “content providers” from the beginning. They’re called that all over the site (check the About page). Apple before them has also referred to content providers as “content providers,” too.

    And lastly, “content provider” is a perfectly apt term. I don’t see anything derogatory about it.

    (BTW, I urge everyone to write to Hulu’s content providers and tell them your thoughts. Let them know of their mistakes, since they’re unfortunately probably not going to read any blog comment threads.)

  • David Neal

    RR [02.19.09 08:29 AM]

    >> In fact in 20 years the cable-tv providers
    >> should really just be big dumb distribution
    >> systems for streams coming straight from the
    >> “[content] providers”

    >Cable TV has been this for decades. The “content >providers” want “internet” to be this, too.

    Cable TV inserts their own ads, local broadcasters can shift around broadcast schedules although that’s rare.

    What I envision is hub and spoke distribution of content (potentially still with local advert inserts). Consider a packaged episode of lost in MPEG format with XML for metadata to describe where and when commercials can be inserted, when the episode can be aired, etc.

  • Well put, and sadly, probably real close to the truth–the idea of media executives screaming about something they saw in the NY Times isn’t far-fetched by half.

    The one thing I have to wonder is whether cable providers, which are either contractually tied to, or sometimes co-owned by, the content providers, had a role in it. The hype in the NY Times, at my own site, and elsewhere was that Boxee gave you the ability to “cut the cable” and get your TV shows per diem, when you want.

    Could a Time Warner, Comcast, or other cable executive have gotten just a little irked at the idea of people feeling free to use just their cable internet for TV content, rather than signing up for the increasingly lucrative “three-play” package deals?

  • Guillermo

    Hey Marc,

    Thought you should know, that even though I can’t watch the hulu video in the article (I’m outside the US), I had no problem watching the ad through the youtube link (in HD, even).

    And if you wanted another reason to laugh, there’s another part from the same Alec Baldwin quote relevant to this: “anywhere”

    I guess they really mean “anywhere in the U.S.”. Isn’t this false advertising, by the way?

  • Xander

    I will never understand why media companies put themselves in these super awkward positions where their only option is to sue their own customers. By preventing Hulu via Boxee, they now leave their customers who want to watch their shows with the following options:

    a) just watch hulu on TV directly
    b) get a cable subscription and record shows of interest
    c) download shows via bittorrent

    Option a) is clumsy. Option b) is what the content providers want, because they think they will get more ad revenue. But DVRs just skip over the commercials so content providers don’t gain anything. Option c) is still a great distribution method with the side benefit of being ad- and DRM- free. By making legitimate, revenue-generating uses of their content difficult or impossible, content providers are practically begging us to pirate their material. Then they get all pissed when we pirate their material.

    This is exactly like African aid groups that build solar powered water wells in impoverished villages before checking to see what the impoverished villages actually need. Turns out they need bikes, so the villagers take apart the pump and build a couple bikes.

    All other companies turn a profit by selling something in a way consistent with their customers’ desires and demands. Anyone who doesn’t listen to their customers ought to be competed out of the market.

  • The solution here, actually, is simple. (Hmm… maybe that’s why it eludes these ‘content providers’.) All Hulu has to do is offer content specially made for Boxee – the same thing it offers via laptop, but with more/most of the commercial content it offers via the usual TV route.

    Could you fast-forward through the ads? Maybe, maybe not. But I have a TiVo, and can zip past the commercials NOW, if I want to. Or I can just leave the room, like everyone else.

  • Hade

    Although it could be in one of the comments that are still in the pipeline, I’m not sure anyone has mentioned this yet: people outside the US can indeed watch the YouTube video you posted.

  • Philippe

    You can laugh. It works! (the YouTube link…)

  • misterblue

    >> In fact in 20 years the cable-tv providers
    >> should really just be big dumb distribution
    >> systems for streams coming straight from the
    >> “providers”, because that’ll be the only way to
    >> capture those eyeballs. They haven’t gotten it
    >> yet. They will.

    > Cable TV has been this for decades. The
    > “content providers” want “internet” to be this, too.

    The cable companies do realize this. That’s what the whole tiered internet argument is about. The cable companies get most of their control by negotiating with the “content providers” for channel space. Remember Disney going off Comcast a while back? Disney didn’t want to pay what Comcast was asking.

    But now the Internet is a pipe to the home that is filling with video and the cable companies want the same control over there. They want to negotiate with the Disneys and Googles for prime “channels” on the Internet.

    In cable company thinking, they want a cable channel distribution model for the Internet with them continuing to control (and get paid for) prime placement and coverage.

  • Hulu… wait… ALL the “content providers”… should get a Twitter account up and interact with some REAL people for once.

  • Derreck

    Dear content providers:

    Just stop providing content, because you obviously don’t want people to watch your programming, and you don’t want to make money from the advertisements that are displayed on your content.

    Fantastic job alienating your viewer base. The person(s) in charge should definitely be promoted.

    – Derreck

    P.S. promoted to janitor

  • Anonymous

    Networks used to sell ads on Time based demographics. Then just age based demographics. They want to sell ads on Location based demographics, and how can they do that if they do not know when or where you are?

    Here is an idea. Just sell the ads. They will get the same amount of attention based on the CONTENT of the ads.

    Networks sort of created this mess themselves by toying with the schedule too much, never letting a program build an audience in a single time slot. Now people have learned to timeshift and have more flexible working hours instead.

    Here is a clue, Asses in front of widescreens at a certain time aren’t any more or less valuble than an ass on a bus with a cellphone. Stop trying to tell your ad cliients otherwise

  • Chris

    The DIVX DVD format was different than the DIVX self destruct DVDs sold through circuit city.

    DIVX self destruct DVDs were the brainchild of a partnership between the company (DIVX) and Circuit City. It was the same company that made the time limited (not self destructing) DVDs.

    I believe the self destructing DVDs lasted 48 hours once exposed to air and they sold for around $5.

  • Adam

    If you want to watch Hulu videos outside of the USA just go to and download hotspot shield. Just turn it on anytime you need to view a video. Works great.

  • SW

    Hulu exists as a way to create forensic evidence of copyright infringement. Isn’t it obvious?

  • SW

    Sorry… I meant to say, Boxee exists as a way to create forensic evidence of copyright infringement. But that was probably obvious…

  • Wow, and I had been planning on upgrading my home theater setup with an Intel Mac Mini as soon as Apple updated them based on this ability (And Netflix streaming).

    Oh, well, back to BitTorrent downloading the shows with no ads, and no money at ALL going to _Content Providers_.

  • Anonymous

    Why does this remind me of the auto industry?

  • colinnwn

    Last night I submitted a post to the Hulu blog saying I love Hulu and know their hand was forced, but I would not watch Hulu until their “content partners” relent or they revealed which “partners” did this. I said I did this not out of protest of Hulu, but so I could ensure the “partners” who did this didn’t get revenue from my advertising views. I said I hoped they could reveal which “partners” did this so I could return to Hulu and avoid only shows from those “partners”, but I knew that was unlikely because those “partners” probably provided Hulu some of their VC.

    My comment wasn’t published, but there are other negative comments on the blog. I wonder which part of what I said was unpalatable?

  • fly

    Luckily we have a $50 Craigslist computer with an upgraded graphics card running our bigscreen TV with a touchpad keyboard on the coffeetable acting as a remote, and not a device like an AppleTV. We go back to streaming Netflix and Hulu via browsers instead of the nice Boxee interface.

    We canceled our Satellite subscription a year ago over the cost, cable is not an option here. I’m not excited about spending $200 for a Physical antenna (70+ miles out) that only pulls in lame network programming, but may for the sports broadcasts alone.

  • Bill

    Referring to Hulu as separate from the “content providers” is a bit misleading. Those “content providers” own Hulu.

  • Ken

    Great article!

    I am happy to see the outrage about this. I have read several articles talking about “content repurposing” and how Boxee was somehow in violation of the terms of Hulu. What the…? I used Boxee on a Mac Mini…it just so happened that the MONITOR connected to my Mac Mini was a 61″ Samsung DLP. I even connected it via DVI, so it’s a monitor, right? I don’t have it connected to an antenna, DirecTV box, or cable, so it’s not a TV, is it? It’s connected to my DVD player, but my Mac Mini has a DVD player in it too?

    These definitions are loony! What is a computer? What is the difference between a PS3 with Blu-Ray that can watch movies and a Blu-Ray player? Most Blu-Ray players have more processing power than home PC’s did a decade ago.

    Too bad I won’t watch Hulu now. At all. I hope you are indeed correct, and Hulu’s “polite” language is still showing the correct disdain and disregard for the complete lack of understanding that the “content providers” have.

    (BTW, I’d love to read your take on the Balkanization of web-based programming with EVERY STATION HAVING ITS OWN SITE instead of some simple, sane, single location that is easily usable…oh wait, that WAS Boxee…

    I’m all out of quotation marks, so I’m done…

  • xscribe

    Another consideration: Actors contracts garner little
    revenue from ‘new media’ such as the internet. Producers held the line and
    refused to give the unions the same royalties they have traditionally paid for broadcast

    Now, when an actor sees their face on a TV, yet they are not being compensated
    because the video stream was transmitted over the internet instead of a broadcast
    or cable network, all hells gonna break loose – and the networks just don’t want to
    deal with it…

  • Thom

    The actual reason for pulling it from boxee is that they haven’t developed a model for charging enough from the advertisers. You see, the people who pay for ad time on Hulu are getting a different rate than those paying for it on TV.

    Now if Hulu can be thought of as just another channel on a person’s big screen TV instead of a 21″ monitor, then well…Hulu is not charging enough, right?

    John McClane had it right when he said “it’s always about the money.”

  • Sean

    The only reason Hulu even exists is because NBC threw a hissy fit and pulled all their content from iTunes when Apple wouldn’t let them have pricing control.

    After NBC pulled all their content from iTunes, they created Hulu. A website where, in order to protect TV-on-DVD sales, you can only watch the last few episodes of any currently-airing NBC show (ditto for certain shows from other networks, such as Battlestar Galactica), and where older seasons of shows (or even the entire show) are removed regularly and without warning.

  • I’ve been very confused as to why this happened, but your article makes perfect sense.

    I had thought that the TV industry, was actually ‘getting’ this internet thing unlike their dumber in-bred cousin, the RIAA.

    Like Netflix having the foresight to see the DVD having a limited lifespan (and embracing online), it seemed as if the major networks saw cable/satellite having a limited lifespan and were gearing up for the online world.

    But, alas, I think you are right…they just had no clue that the internet was REPLACING cable/satellite…not just a fad for watching TV on my cell phone.

    The irony, of course is that Boxee has a built in bittorrent client. They must be completely oblivious to this fact. Consumers wanted TV via boxee. They were more than willing to watch TV with ads via Hulu on Boxee. No more hulu? Well, they’re not going to instead go to, they’ll just change the boxee channel to bittorrent.

  • norm

    I might be in the margins on this one, but losing Hulu isn’t that big of a deal. I can just watch the shows I’m interested through the Comedy Central channel on Boxee. Instead of watching Hulu ads, I’ll watch Comedy Central ads. Hulu loses.

  • It seems really simple to me. The Hulu content providers see TV’s competition as the Boxee company and packaged software. When in truth, TV’s competition is the distribution technologies that power Boxee – streaming video, downloads, and torrent – in an easy to use interface.

    It’s the classic shortsighted mistake that the music industry made when they thought killing Napster would cause music sharing to stop. They could have worked with Napster to figure out effective and competitive revenue models. Instead in the absence of a single convenient music sharing website and platform, multiple competing websites and technologies were created. The music industry had no chance and no single entity to sue.

    People want content wherever and whenever they choose and with the most convenience. If it isn’t available through Boxee then consumers will invent ways to get around and surpass it. In a few years, we’ll all be saying the same thing, namely, that blocking Boxee from Hulu was one of the critical missteps that led to the end of the TV/movie content provider industry as we knew it.

  • Jarvis Latteier

    I have a different take on what is Happening.
    NBC, Fox, Apple they are all looking for the correct delivery method.

    I don’t believe they are missing the mark at all, this is just growing pains. J. B. Perrette, the president of digital distribution for NBC Universal was quoted in the May 8, 2008 NY Times as saying, “The number of people watching the company’s programs free, with ads, on or is far greater than those buying $1.99 copies to download and own. The ad-supported business is certainly scaling and proving to be a very compelling user experience.” Remember the big fight Apple and NBC had back in September 07? I believe the true root of the problem was NBC had a clearer picture of the future than Apple. In April 2007 Hulu was announced, with AOL, MSN, MySpace and Yahoo! planned as “initial distribution partners”. NBC had invested in what they believed to be the future, free Ad supported streaming content. I believe Apple was also invited to invest, but Apple being Apple didn’t want to share.

    I think this is still a power play between Apple and NBC. NBC wants the content on AppleTV but wants it delivered in a way that Apple isn’t comfortable with. Hulu is an effort to pull the rug out from under Apple and force their hand. Apple TVs sales tripled in Q4 of 08 in parallel with the release of Boxee for Apple TV. Boxee is circumventing the arm twisting that NBCs Hulu has on Apple. That is why it got pulled.

    Or perhaps Apple is in talks to acquire Hulu and is locking it down. PalyOn UPNP server, SecondRunTV and other plugins may be stepping on Apples toes. Hulu was looking to deliver streaming content to the iPhone, and Adobe is now working with Apple to get Flash on the iPhone. With the “ION” HD Chipset looming and a nationwide broadband investment, AppleTV has the opportunity to take the lead in online distribution. Users could buy the shows in HD or stream SD for free.

    Apple had Q4 profits and has a turnkey infrastructure. With the announcement of iTunes Replay, I smell something brewing this year, fingers crossed.

    Viva La Revolución!

  • Rus

    I was considering an AppleTV and using it for Boxee because I recently canceled my cable … I get great reception of DTV. Guess I’ll just go for a slingbox at a friend’s house.

    This decision essentially gives me options that are questionable instead of legal and fair.

    I might just put a small PC next to the TV, but it won’t include access to Hulu – I’ll stream ABC instead.

  • Josh

    So basically DiVX was just the precursor to Blu-Ray? All they did was relax the remote authentication scheme slightly and added larger capacity discs. Oh boy!

  • Graham

    Great article! Just saw this on the Google Understudy page:

    Hulu Fullscreen update

    Support for fullscreen viewing of Hulu is not available. They have indicated that content providers do not want easy access to content on a TV screen.

  • ggg

    A little over 10 years ago I worked for a company that was partially owned by one of the major networks and we were tasked with exploring the concept of broadcasting TV content over the Internet. Based on my experience there, it sounds to me like you are quite on the nose with your theory that the real issue with the Hulu/Boxee ordeal has to do with Hulu content being shown on a TV rather than on a computer, but I don’t think you went far enough to explain the driving force of the actions.

    One thing that content providers and their partners are VERY sensitive about are broadcasting rights. When I worked for said company, we met with all kinds of other companies like DSL companies, internet branches of cable companies, set top box manufacturers, etc. and we pretended like we had all of this content that we wanted to provide over the Internet through their networks and devices.

    But the dirty little secret was that we only had rights to broadcast the network’s content over TV and we had zero rights to broadcast *any* of it over the Internet. At the time, no one had any rights to broadcast any “real” content over the Internet. That’s because to gain the rights, you need a contract that covers the producers of the show, the writers, the actors, all the way down to the crews on the sets. These guys get paid every time a show airs on TV and on the Internet it’s a little different because you can watch anything at any time, so the economics are very different.

    In the last 10 years, it seems that companies like Hulu and the rest of the networks that broadcast their shows over the Internet have obtained such rights, but it is likely the case that there are different rules and broadcasting rights between content that broadcast over TV and content that is broadcast over the Internet.

    Something like Boxee blurs these lines and the Hulu lawyers are probably freaking out seeing people watching Hulu on their TV because they are afraid they might have to pay TV contract residuals instead of Internet contract residuals when someone watches Hulu on their TV. Or at least the lawyers know that there is an argument to be had regarding the difference between rights to broadcast on TV and the Internet if they both end up on a TV and probably think it’s easier for the time being to just disallow (to the best of their ability) Hulu content to be displayed on TV while they work out the logistics.

  • whimsy

    At this moment, having a 24″ imac with a USB-based Cable/OTA reciever hanging from a VESA-mount on my living room wall as a TV/Media Center is help illustrate how ridiculous it is to try and make some techincal difference between TV and Computer.

    Everyone who visits my house thinks it’s a TV until I pop-open Safari to show video off some blog somewhere.

    They can try and kill Boxee but it won’t change my habits around when I use eye-tv, front-row, safari, DVD-Player or itunes/vlc/whatever to access media content.

    And, as others have noted elsewhere, I accutally ~watch~ the adds in Hulu – vs. fast-forwarding them, turning down the volume or just leaving the room for a quick break when I use eye-tv…

    Clearly, “they” don’t “get it”

  • The reason is because Hulu ads were not clickable inside of Boxee, so advertisers are the real “content providers” referenced.

  • Clarity provided

    What a great article, but there are some problems with his logic. First of all, he is assuming that it is Hulu vs. the “content providers” (aka studios such as ABC, NBC, etc.)

    Hulu IS the “content provider”, well, at least they are owned by the content providers (ie studios). The big bully here is the cable operators, or cable companies, such as Time Warner, Cox, Comcast, etc. THEY are the ones that are left out of the loop if Hulu and Boxee become “pals”. It’s the cable companies that are pressuring the “content providers” to block Boxee. The Cable Companies will become obsolete if something like Boxee is allowed to bring Hulu to the precious TV.

    Ultimately, it is the Cable Companies who absolutely despise Hulu. For all Hulu and the studious care, they can still get the Ad revenue from the Ad firms at the same rate as today but the Cable Companies are still the hand that feeds the Studios. They pay billions of $$$ a year for the rights to show that “content”. The “content providers” would like for their shows to be more easily available, but they don’t want to lose the revenue from the Cable Companies.

  • David

    It as inevitable really. There are so many free content video sites now, and each one is a channel for losing money for a studio somewhere. They have to adjust and find a way to make profit off of it somehow. I agree with the last statement though the most that it’s cable companies who take a licking the hardest. However, more and more people are trying to cut their spending by switching to TV to PC plans instead – they should look into this more and people are using thedevelopment of apps more than ever now to get what they want. Another good place to investigate.