Did Big Cable Force Hulu Off Boxee?
by Peter Kafka
Posted on February 18, 2009 at 5:44 PM PT
Why is Hulu shutting down its feed to Boxee, the buzzy service that makes it really easy to watch Internet video on your TV?
As in the day’s other Hulu news–when the service pulled its video feed from CBS’s TV.com–Hulu is being vague about what happened. But at least the company is being apologetic about it.
Hulu CEO Jason Kilar has an extensive, thoughtful blog post explaining that he’s doing this at the behest of unnamed “content owners”–and acknowledging that the move sucks for Boxee’s small but ardent user base. Boxee CEO Avner Ronen has his own post, in which he explains that he’s been pleading with Hulu for the past two weeks to keep working with his company.
I’m speculating here. But I’ve got a good hunch why the unnamed content owners–recall that Hulu’s JV partners, News Corp.’s (NWS) Fox and GE’s (GE) NBC, are also the site’s two biggest content owners–pushed Hulu to drop Boxee: They did so because the big cable companies want them to. (News Corp. is the owner of Dow Jones, which owns this Web site.)
That’s because, as I noted before, it’s the cable TV providers that have the most to lose from cable bypass plays like Boxee: If you can get all the movies, TV shows and other content you want for free on the Web, why are you paying Comcast (CMCSA) or Time Warner Cable (TWC) for a cable TV subscription?
This isn’t a theoretical problem: Compensation for Web programming weighed heavily in the December dispute between Viacom (VIA) and Time Warner Cable. One of Time Warner Cable’s complaints was that it was paying Viacom for programming Viacom was also running on the Web, without getting a cut of any of the revenue the cable network made.
And last month executives from a major cable network told me they had no intention of putting most of their programming on the Web. That’s because they’d been told by their cable partners, who pay them a hefty fee for each subscriber that gets their shows, that putting that same stuff on the Internet was a lousy idea.
When I talked to Ronen about this impending showdown with the cable guys last month, he essentially shrugged (see video below): The cable guys are going to get passed over whether they like it or not, he said, so if they’re smart they’ll figure out a way to participate. Maybe. But I wondered aloud if they might not try flexing their considerable muscles instead. And perhaps that’s just what happened.
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Comments
Having hoped for years that TiVo would identify the correct business / distribution model, it will be interesting to watch Boxee’s travails. Lets see if Boxee’s ‘all-star cast’ of VCs can provide the much vaunted value add they so commonly trumpet along with their cash.
Posted by Jonathan Marcus at February 19th, 2009 at 9:04 amYou nailed it Peter. This is all about the cable companies holding on for dear life to a legacy business model that is being disrupted by web-to-tv services such as Boxee. No doubt they are the root of this unfortunate action.
More thoughts here:
Posted by Yaron Samid at February 19th, 2009 at 1:37 pmhttp://www.techaviv.com/2009/0.....oxee-saga/