In short, I’m not surprised at all.
I’ve had several e-mail exchanges in the last month regarding Boxee and what I consider to be the market’s second attempt at digital media adapters (the first was marked by devices from companies like BroadQ, Digital 5, Mediabolic, Oregan Networks). And in those e-mails, I pretty much anticipated what’s happening now between Hulu and Boxee (Hulu’s blog post, Boxee’s blog post). Things I’ve had to say:
“Generally, I think 3rd parties like Boxee that are trying to channel content from sites like Hulu to the TV without deals in place with those sites are headed for trouble. I think the Hulus of the world are going to really want to tightly control how they get delivered on the TV (and in some cases, they won’t want to see their content delivered on TVs). I think the way Roku and Netflix are working together is probably a model for partnerships like this.”
In an e-mail exchange with Brent Evans (author of the GeekTonic blog):
“What is Boxee’s value add? They are essentially a user interface wrapper to a bunch of online services. Eventually, I think those services (Hulu, ABC, etc.) will own their own living room user interfaces. Maybe Boxee will goad the market into getting to that point…”
And in another e-mail exchange:
“The more a company can cut real bonafide deals with these content sources (like Roku has done with Netflix), the more successful they’ll be. Most of these devices just scrape sites like Hulu and somehow display their flash player content on the television — ie Hulu, CBS, etc (the content publishers) can easily break all these devices that don’t have real partnerships. That I can tell, they aren’t doing anything illegal per se, but it’s more that Hulu will eventually want to control and dictate the business terms of Hulu content on the television.”
So I wasn’t at all surprised by Hulu’s announcement that they had asked Boxee to remove them. Not that I think it’s a BAD idea for Boxee to channel Hulu’s content… As long as Hulu’s ads are being displayed, it doesn’t break their business model so they should eventually be open to this kind of syndication.
So why does Hulu want to cut-off Boxee (who, according to the Boxee blog post, drove 100,000 views on Hulu last week)? My guesses:
- Officially or unofficially, Hulu’s content licenses may limit them to delivering content on a traditional PC with keyboard and mouse. Getting onto the TV might be make Hulu a threat to existing revenue streams created by the same content on the traditional TV. And Hulu may not be delivering as much money per “view” (or whatever metric) as those existing revenue streams deliver.
- Hulu just may want to control their TV experience themselves. They have been very purposeful in the design of their website. Why wouldn’t they want to be similiarly purposeful in the design of their user interface on a television? Or if it’s not UI design, they may just not want Boxee to get too powerful at this early stage in the game.