Steve Raymond’s weblog

That’s Just Dumb Old Media Guy Redux

Hulu‘s content partners are have asked Hulu to ask Boxee to remove Hulu from it’s product.  This makes no sense.

If you haven’t used Boxee, its an interface for media based on the XBox Media Center (XBMC) platform.  You can install it on your Mac and it’ll scan all your media folders and give you a browsable interface thats compatible with the little white Apple remote.  It also does a good job with streaming content sources (like Hulu, Comedy Centtral, etc) and it is social (you can make friends and see what they are watching, etc.)

But what really had people excited was that you could install Boxee on AppleTV and access all the same functionality on your living room on your sweet HDTV with your home stereo etc.  I’ve been following this space for a long time and it seemed like just maybe someone had finally cracked the living room media center code, which has seen hundreds of millions of dollars in flame outs.  Why?  An open architecture that would work on any living room based linux box with a good mix of streaming vs. owned media and a nice UI and some lite social networking.  No DRM, no prepackaged content deals with a locked partner set.  And a small company with a moderate burn rate that didn’t need to become a behemoth to be successful and provide a good return to its investors.  Success would mean that the streaming/caching models that are developing on the internet would work on your best media-watching screen.

And Boxee has been going about their business the right way.  They preserve the Hulu interface, preserve its commercials, don’t allow stream ripping, etc.  Its basically the same experience you can have right now on your PC.  Any Macgiver with some duct tape and some patch cables can already put Hulu on their TV.  Boxee just made it easier.

I don’t actually use Boxee a ton, but it’s great for what it is.  I NEVER watch live TV, I always time shift so I never watch commercials in my living room.  The only exception being on Hulu on Boxee on Apple TV.

So if you are a media company and you’ve already come to terms with putting your content on Hulu, why on earth would you not want entrepreneurs to figure out ways to get that content on more screens?  Of course this means that existing models and franchises (like Sat TV and cable TV esp.) are threatened, but that was the case before Boxee.  And as Mark Cuban has so elequently (and correctly) argued the internet is a long way from being able to replace satellite and cable for breadth of on demand HD content in the living room at a mass market level.  Companies like Boxee are exactly the kind of companies you want innovating for you, because if the innovation doesn’t happen there its all hacks and hackers and torrents.  Plus if they start picking up steam you can buy them and have them help you evolve and live to fight on.  Its like our experience with the music industry all over again.

The living room TV is a screen, just like my phone and my computer screen.  Captive media audiences are a thing of the last century, you can’t lock down the content and you can’t completely control distribution.   If you can’t figure out a way to create loyal followers with great user experiences, your content is useless.  Pissing off early adopters is a horrible way to go about evolving your business.

UPDATE:  check out Jonathan Strauss’s Boxee logo with a black eye.

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  • http://jonathanhstrauss.com jonathanhstrauss

    This coming from the guy whose employer is suing YouTube :-P

    I agree that the cable/satellite providers are most likely the ones most threatened by a product like Boxee. And I think they may have used their leverage in the form of carriage fees to make the content owners care about this threat as much as they do. As broadcast tv audiences are fragmenting, so is ad revenue. Which means carriage fees, a relatively fixed revenue source, take on much greater relative significance to the networks.

  • http://youarekillingme.net steveray

    1 Billion Dollars!! muahahahaha

    But seriously, in the case of Youtube an argument on behalf of the content owner can be made, and Google was a big company with deep pockets that was being passively confrontational (if that makes sense). In this case Boxee was taking an existing much hyped product and business model and making it better without fundamentally changing it. What did Hulu and their content partners expect was going to happen? They know you can hook a PC up to a plasma screen, don't they?

  • http://jonathanhstrauss.com jonathanhstrauss

    First of all, I think the cable and satellite providers, if not the content owners, have been upset about Hulu on Boxee for some time now and that the recent flurry of glowing press coverage (especially the NY Times article of January 16) made them feel the need to act. As I speculate in my post on the subject, the 2 week gap between the NY Times article and Boxee getting notice from Hulu fits the timeline of acute reaction by these types of companies.

    Secondly, I think the arguments are much stronger for the similarities between Viacom/YouTube and Big Content/Boxee than the differences. Without YouTube, users would just have watched the same infringing content on other streaming services or got it through BitTorrent (the equivalent of hooking your PC to your tv). But, the problem was that YouTube was creating value for themselves by making this already common behavior more convenient (the value Boxee is creating for themselves has been in the form of brand equity and users from all this good press). While you can argue that there is a significant difference in the fact that the behavior YouTube facilitated was clearly illegal from the start, I would say that by making this policy change Big Content has rendered the behavior Boxee was enabling (i.e. Hulu on the tv) effectively illegal as well (and thereby indicated that they always viewed it as illegal).

  • http://jonathanhstrauss.com jonathanhstrauss

    P.S. Feel free to reuse my black-eye Boxee logo if you'd like :-)http://www.flickr.com/photos/jonathanhstrauss/3

  • http://jonathanhstrauss.com jonathanhstrauss

    This coming from the guy whose employer is suing YouTube :-P

    I agree that the cable/satellite providers are most likely the ones most threatened by a product like Boxee. And I think they may have used their leverage in the form of carriage fees to make the content owners care about this threat as much as they do. As broadcast tv audiences are fragmenting, so is ad revenue. Which means carriage fees, a relatively fixed revenue source, take on much greater relative significance to the networks.

  • http://youarekillingme.net steveray

    1 Billion Dollars!! muahahahaha

    But seriously, in the case of Youtube an argument on behalf of the content owner can be made, and Google was a big company with deep pockets that was being passively confrontational (if that makes sense). In this case Boxee was taking an existing much hyped product and business model and making it better without fundamentally changing it. What did Hulu and their content partners expect was going to happen? They know you can hook a PC up to a plasma screen, don't they?

  • http://jonathanhstrauss.com jonathanhstrauss

    First of all, I think the cable and satellite providers, if not the content owners, have been upset about Hulu on Boxee for some time now and that the recent flurry of glowing press coverage (especially the NY Times article of January 16) made them feel the need to act. As I speculate in my post on the subject, the 2 week gap between the NY Times article and Boxee getting notice from Hulu fits the timeline of acute reaction by these types of companies.

    Secondly, I think the arguments are much stronger for the similarities between Viacom/YouTube and Big Content/Boxee than the differences. Without YouTube, users would just have watched the same infringing content on other streaming services or got it through BitTorrent (the equivalent of hooking your PC to your tv). But, the problem was that YouTube was creating value for themselves by making this already common behavior more convenient (the value Boxee is creating for themselves has been in the form of brand equity and users from all this good press). While you can argue that there is a significant difference in the fact that the behavior YouTube facilitated was clearly illegal from the start, I would say that by making this policy change Big Content has rendered the behavior Boxee was enabling (i.e. Hulu on the tv) effectively illegal as well (and thereby indicated that they always viewed it as illegal).

  • http://jonathanhstrauss.com jonathanhstrauss

    P.S. Feel free to reuse my black-eye Boxee logo if you'd like :-)http://www.flickr.com/photos/jonathanhstrauss/3