Or at least that’s the way I read it. My guess is that Jim is using the “leaky wall” strategy to access the rest of the Journal piece rather than using a paid subscription. But the writers seem to have made that deliberately oblique. Or perhaps they think their audience has zero interest in the minutiae of media economics.

And for the record: In addition to Dow Jones and The Wall Street Journal, News Corp. (NWS) owns this Web site.

Is Hulu putting up a pay wall around its Web TV site? Nope.

Does Hulu want to charge people to watch Web TV? Yes.

Confused? Don’t be.

It’s pretty straightforward: Hulu, the joint venture between News Corp.’s (NWS) Fox, GE’s (GE) NBC Universal and Disney’s (DIS) ABC, doesn’t plan on charging people to watch the stuff it’s currently airing on the site–a mix of first-run shows from broadcast TV, a limited number of cable TV shows and a smattering of movies. But Hulu is trying to figure out how to create some kind of premium offering where you’ll pay for stuff that isn’t on the site right now.

That’s what Hulu’s backers have been saying for months, so it’s a little puzzling that News Corp. COO Chase Carey’s comments got folks worked up yesterday. Meanwhile, multiple sources familiar with Hulu’s plans tell me that…Hulu doesn’t actually have a plan yet, but it is trying to piece one together.

There are some pretty obvious ways to go here. Hulu could sell movies or TV shows on a pay-per-view basis, or it could sell subscriptions to shows it doesn’t offer now or to a deeper offering of shows it already has. You could call it “Hulu Plus” (no charge for that one, guys).

If you’re a fan of Fox’s “Family Guy,” for instance, Hulu is only of limited help: The site only has the most recent five episodes. So how much would you pay to watch the rest of them?

If you don’t have an answer for that, don’t worry–Team Hulu doesn’t know, either. Nor can they tell you if airing free shows on Hulu has cut into other revenue streams like broadcast TV advertising or DVD sales, even though “we’ve done a thousand regression analyses on this,” says an industry executive involved in the site.

Do bear in mind that this was a problem Hulu’s backers didn’t really envision when they were dreaming up the site; at the time, they were most concerned with building a video site that would allow them to barter with Google (GOOG) and Apple (AAPL).

Now they own one of the biggest video sites on the Web, one they say is performing ahead of plan. And Hulu is selling enough advertising that it’s coming close to reaching break-even, according to executives I spoke to this week.

But at the very least, adding a pay component to Hulu helps mollify those who fear the site is cannibalizing their existing businesses. Or who simply want another revenue stream. And a pay element dovetails with Hulu’s interest in joining up with the “authentication” movement pushed by cable guys like Comcast (CMCSA) and Time Warner (TWX).

Meanwhile, here’s the use case for Hulu that its backers originally envisioned–“catch up viewing.” I was on a plane when last night’s episode of the “The Office” aired, but I can watch the whole thing–with ads I can’t skip–on my laptop today. And so can you:

What is it? A TV (and movie) portal that looks more or less like every other TV (and movie) portal on the Web: Hulu, TV.com, Sling.com, Fancast, etc.

The only reason for AT&T (T) to launch its own portal now would be as a placeholder until it launches its own “TV Everywhere” play, where subscribers to its  “U-Verse” TV service would get Web access to cable shows. That’s the same strategy that Comcast (CMCSA), Time Warner Cable (TWC), Verizon (VZ) and everyone else in the pay TV business is trying.

But while AT&T will likely be doing the same, this site isn’t for that. At least, not according to the note AT&T sent to NewTeeVee, which makes it sound like the company is creating…another free Web TV portal:

We have started a soft launch of a new site called AT&T Entertainment. This site will feature free online content available to any consumer. We’re finalizing a few final elements, and we’ll share more details on our official launch soon.

Allrighty, then. As AT&T says, it’s a soft launch, so maybe when it’s ready for primetime, things will make more sense. But for now it’s a head-scratcher.

One thing that distinguishes AT&T’s site from, say, Hulu: Hulu lets you embed clips from the site on your blog, while AT&T’s site, which relies on Hulu for much of its content, doesn’t. So here’s an awesome, upsetting clip you can see on AT&T’s site, but can only embed by heading to Hulu. Makes sense, right?

Is a deal between Disney and Hulu, which has been in the works for many months, finally ready for primetime? Yes, say multiple people familiar with the matter who tell me an announcement should be coming in the next few days.

The arrangement will add Disney (DIS) programming–primarily television shows from ABC like “Lost,” although it will also include some of the company’s movies–to the joint venture between GE’s (GE) NBC and News Corp.’s (NWS) Fox. In return for giving Hulu exclusive access to some of its content, but not for some high-profile programming like ESPN, Disney will get an equity stake in the joint venture and seats on the company’s board.

It’s a big deal for Disney, which until now has been focused on driving Web traffic to its own properties. And it’s a big deal for Hulu, which has now locked up three of the four broadcast networks.

Does all of this sound familiar? It should. It’s pretty much where things stood nearly a month ago when I was told a deal was going to be struck “any day.”

So what was the hold-up?

Just the tedium of i-dotting and t-crossing, I’m told. In this case, it comes in the form of haggling over programming decisions: Which shows and movies will appear on Hulu, how quickly they appear after their offline debut, how long they will stay on the site, etc.

A week ago, an executive involved in the negotiations told me the deal was “down to the short strokes.” By the end of last week, the four companies involved were massaging language for press releases, I’m told.

The long gestation period has led some observers to wonder if other players with a stake in online video–like Comcast (CMCSA), Google (GOOG) or CBS (CBS)–had been able to convince Disney’s Bob Iger not to go forward with the pact.

“Everyone’s been trying to tell Iger how stupid this deal is,” a TV executive tells me. The nuance of the critiques differs depending on who’s making them, but all of them make the same point: Throwing in with Hulu will strengthen the joint venture, which also includes investor Providence Equity Partners, but it won’t provide Disney with significant upside.

But the complaints seem to have fallen on deaf ears. While Google was able to get a deal with Disney to run excerpts of some of its programming on YouTube–a consolation prize, basically–it’s been unable to cobble together a deal for long-form programming.

Earlier this month, YouTube unveiled a new Hulu-like section for movies and television shows. But its inventory of TV shows and movies remains paltry and it doesn’t have any of the first-run shows that the TV networks highlight on their own sites (and on Hulu).

One thing to watch for going forward, regardless of when the Disney/ABC deal gets done, is how much access to those first-run shows Hulu users get.

Hulu is a hit with viewers but its network backers are still wary of training viewers to expect to watch their favorite shows on the Web whenever they want to watch them.

Which is why many of Hulu’s first-run TV shows have particularly short shelf lives. You can only see about half of this season’s run of NBC’s “The Office,” for instance. And if you want to watch new episodes of “Rescue Me,” which airs on News Corp.’s FX, you’ve got to be patient, then act fast. New episodes don’t show up on Hulu until eight days after they premiere on the cable channel, but they don’t last there for more than a couple of weeks.

In TV parlance, this now-you-see-it-now-you-don’t programming is called “windowing,” and casual Hulu users tend not to notice or complain about it. A small dust-up in January about “It’s Always Sunny In Philadelphia,” a disappearing FX sitcom, is the exception that proves the rule.

But what happens if NBC, Fox and ABC shows start taking longer to get to the Hulu site and leave sooner? We may find out. An executive at one of the joint venture’s network backers tells me to expect more restrictive windowing in the future as the TV guys try to get a handle on the Web.

Which means that just as the Disney deal pumps more content into Hulu, it may end up becoming harder to find.

When I first met Avner Ronen in January, the Boxee CEO was beaming. His Web video company was one of the breakout hits at the Consumer Electronics Show.

But when I had lunch with Ronen yesterday, he was much more subdued. Going head-to-head against the TV establishment can take the wind out of you.

In the span of two months, Boxee has gone from obscure start-up to an irritant or worse for the TV business.

That’s because Boxee, which makes it easy to sort and play video you grab from the Web, symbolizes a real threat for the established players: That one day, many consumers will consume most of their TV via video they find on the Web. And then they’ll cut TV networks and cable operators out of the picture.

That’s a long way from happening, but just the notion of it seemed to be enough for GE’s (GE) NBC and News Corp.’s (NWS) Fox, which apparently forced their Hulu joint venture to stop working with Boxee last month.

Now Hulu and Boxee are in a cat-and-mouse game, whereby Boxee’s engineers try to find ways to get Hulu’s stuff onto their browsers and the Hulu guys try to stop them. (News Corp. is the owner of Dow Jones, which owns this Web site.)

Ronen isn’t optimistic that this is going to change anytime soon. He also says the past few months have taught him how little he knew about the media business prior to starting Boxee in 2007. Had he known how entrenched and complicated the relationships between broadcasters, programmers, cable networks and cable operators are, he says, he might never have tried to get the company going.

But Ronen still figures he’ll thrive in the long run. He notes that some big media companies that aren’t NBC and Fox–Netflix (NFLX) and Disney’s (DIS) ABC, for instance–have been happy to work with Boxee, or at least not to complain about the service.

I’ll let him explain why, and lay out Boxee’s future plans (which included a beta launch this summer and Boxee-enabled devices next year) in this video interview.

And if, like me, you’re going to be in Austin for South By Southwest on Saturday, you can ask him yourself, at a panel discussion where he’ll share the stage with College Humor’s Ricky Van Veen and B.J. Novak of “The Office.”

But this time, Morgan has abandoned the Web for TV.

And Morgan’s Simulmedia, which just announced a $4 million funding round led by Union Square Ventures and Avalon Ventures, isn’t even going after the TV of the future.

Instead, it’s chasing an odd niche that exists today: television commercials for television shows–e.g., the ads NBC runs during “The Office” to try to get you to watch “30 Rock.”

Morgan says this is a $10 billion business, and argues that most of the money spent on it is wasted. He says his company can solve that with software that swaps

out different spots depending on factors like geography, timing, and even weather. Weather? Well, in advance of last Sunday’s snowstorm in New York, he says, his clients-to-be could have run ads letting parents know about all the kids’ programming available on their cable system.

This sounds similar to lots of other efforts to make TV advertising more Web-like by serving up different ads to different viewers based on who they are and what they watch. Basically, a variant of the behavioral targeting technology that made Tacoda worth $275 million to Time Warner’s (TWX) AOL, which bought the Morgan’s company in 2007.

But Morgan, who spent less than five months at AOL as an EVP before bolting, says his start-up is chasing a different market, using different techniques. He explains why in this interview:


[ See post to watch video ]
]]> http://mediamemo.allthingsd.com/20090306/a-web-ad-guys-third-act-better-tv-ads-for-tv-shows/feed/ 0 http://mediamemo.allthingsd.com/20090112/boxee-webtv-that-makes-sense-is-that-good-or-bad-for-big-cable/ http://mediamemo.allthingsd.com/20090112/boxee-webtv-that-makes-sense-is-that-good-or-bad-for-big-cable/#comments Mon, 12 Jan 2009 18:19:56 +0000 Peter Kafka http://mediamemo.allthingsd.com/?p=3053 This year’s Consumer Electronic Show, like every year’s CES, was peppered with big talk about merging your PC and your TV, led by a new widget initiative from Yahoo (YHOO). And my reaction was the same one I have every year: Why?

No need to go on about my lack of interest in this forced marriage, which the consumer electronics business has been trying to make work for more than a decade (see the 1993 Time cover to the right). Slate’s Farhad Manjoo has done it for me. If you’re pressed for time, the title will do: “I don’t want my Web TV.”

Here’s what I do want: The ability to use my TV to watch all the great video the Web makes available–actual TV shows and movies like “The Office” on Hulu, “Lost” on ABC.com, “No Country For Old Men” on Netflix’s (NFLX) on-demand service. Which is where Boxee comes in.

The New York-based start-up makes elegant software that cobbles together offerings from all of those services, plus many more–with whatever media you have stored on your hard drive–and serves it up to you on your big screen, with a minimum of fuss. Right now it’s a niche product–it only works on PCs running Linux, or Apple’s (AAPL) Mac mini and AppleTV boxes–but that should change soon.

It’s slick stuff, and when you get a chance to watch it in action, it’s the first time that all those anecdotal stories about people dropping their cable TV subscriptions and just watching Internet video finally make sense: Why pay for cable stations you don’t want when you can watch just about everything you do want, on demand, for free?

This is also why I’m not sure how long the big cable companies will allow Boxee to operate unfettered. As the recent dispute between Time Warner Cable (TWC) and Viacom (VIA) illustrates, the cable operators are increasingly dismayed about paying the cable networks big fees for their content, only to find them giving it away online. And with Boxee providing customers with a real opportunity to drop cable TV in favor of a broadband connection, I worry that it’s a matter of time before they find some way to throttle the company.

Technically, the cable guys (and the telcos, who are also in the TV business) aren’t supposed to be able to do anything about Boxee. They’re just supposed to act as a dumb pipe serving up high-speed Internet access and keep their mouths shut. In the real world, I don’t think that’s going to fly. See: The many bandwidth caps the cable guys are starting to experiment with, which are aimed at heavy Web video users.

Boxee founder Avner Ronen disagrees, of course. He thinks the cable guys will want to work with his company (he plans to make money by licensing his software to gadget makers and extracting fees from content providers like Netflix, but that’s all down the line). And maybe he’s right: When I dropped by his CES booth on Friday, he was being swarmed by emissaries from CableLabs, the cable guys’ tech consortium. They were the third group of cable execs to visit the company that day.

I’ll let Ronen make his case in the video below; and I’ve also included a brief demo video from the company. But that clip doesn’t really do Boxee justice. Ask one of the 100,000 super-early adopters who are using the software themselves. Or any of the nervous cable guys who saw it last week.


[ See post to watch video ]


quick intro to boxee from boxee on Vimeo.
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