Hulu, Boxee and the Challenge of Web Television

by Mielle Sullivan, Janus Networks

The long anticipated television/computer convergence hit a potentially crippling set back this week when Hulu, one of the most popular streaming video sites removed its content from Boxee, a popular Internet to TV integration app.

Hulu had been available on Boxee since October. Both companies had gained followers and popularity as a result. It seemed like the perfect arrangement: Hulu brought you the content, Boxee brought it to your television. Given the seemingly mutual beneficial relationship, it is hard to understand why Hulu would break it off. At present, Hulu doesn’t have an alternate method of bringing it’s content directly to TVs, and this decision has angered many users who will likely not consumeHulu’s content if they can’t do so through a TV.

Hulu also pulled its content from TV.com, a CBS site. Hulu is a joint venture between NBC and Universal News Corp, so there is some network competition. What is probably more important, however, is securingHulu’s brand as the place for Internet television. Though it has tremendous potential, Boxee is a start up still in alpha testing. Hulu has hundreds of thousands of users, is growing very fast and probably has the best brand name for TV and movie length web videos. From that perspective, it is easy to see whyHulu would want control over its distribution. Also, just because Hulu is free and and ad supported now, doesn’t mean it won’t want to offer paid premium or subscription services in the future.

Nevertheless, Boxee is not necessarily competition for a paid subscription model or distribution. It functions more like an aggregator or a portal to video content on the web–merely making it easier to find and put on your TV. My guess is that Hulu, along with its content providers and cable companies (who do authorize some of Hulu’s content) are planning their own video web portal so they can control the user experience. But this may be disastrous for Hulu. It is hard to create a walled garden on the Internet. The more you try to hide away, the more incentive there is for another company to come along and offer the same thing, or something similar, for free.Hulu became popular because it was easy, had great content and was free. If it tries to control its users too much, they will simply go elsewhere.

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