Hulu requests removal from Boxee
centernetworks.com
centernetworks.com
While the advertising was kept in place, it still doesn't attract the rates that normal television does. Given a choice, content holders definitely prefer viewers to tune into ordinary broadcast television to watch their shows - online content is about capturing the potion of viewers who miss shows and don't watch broadcast television.
With Boxee, there is the potential that the online content will cut into the broadcast TV audience - hence this decision.
What is interesting is that the true motives are now more obvious. Online content, in the form of both iTunes and Hulu, is fine as long as it doesn't cut too close to the broadcast base.
Content holders have gone from vigorously defending their network broadcasts to now accepting online content, but only to a point. The next battle will take place when more intelligent PC-like DVR's come out on the market (like the PS3, but at a $100-150 price point) allowing viewers to easily stream online content to a television with a remote. The content owners have a short time window between now and then where they have the best of both worlds - both broadcast and online, but once it all goes online the very lucrative and protected broadcast market will be threatened.
With online, there is no more having to acquire broadcast licenses, no more large-scale infrastructure networks to reach your potential audience and no longer limited competition and cable monopolies with packaged channel selection.
Network TV: $20-40cpm per ad - 15-19 ads shown in 30 minutes
Cable: $1-15 cpm per ad - 10-22 ads shown (plus subscription revenue)
iTunes: $0.80 per viewer, so CPM of $80 total (est network share)
Hulu / Online: CPM $10-40. 1-4 ads per show.
If you do the math, its obvious that network broadcasts really rake it in. A 30 second spot on a prime time network show sells for anywhere from $400,000 to $800,000 per spot (for 15-30M viewers).
If everyone started watching Hulu instead, they would lose 80-90% of revenue. If everybody downloaded on iTunes (assuming 3 viewers per download, or more is likely) they would still lose out but not as much.
The problem is if the networks start offering a la carte shows for $2 a pop, they lose the bundling revenue (ie. channels you receive in a bundle but would never pay for on their own).
Supply and demand. If everyone started watching on Hulu they would be able to charge more per advertisement. These are rates given the current situation, not the future. Why do I say this? I watch Hulu. I do not watch TV otherwise. If the advertisers (and networks) want my eyeballs they need to provide content via Hulu.
I guess it's at that moment that you notice the whisps of steam rise from the snout and the lazily opening eye, and realize that Comcast over in the corner was never asleep at all, but saw the whole thing.
... oops somehow I failed to notice a 4 hour old reply saying the same thing. Apologies.
Hopefully someday they'll realize that when they cut off people from having legal access to their content, people will go back to their illegal methods. When will old media learn?
This is especially frustrating for me because I set up my HTPC with Boxee expressly to have an easy-to-navigate interface for Hulu via my remote control.
Hulu wasn't making any money with this. Boxee was full of people who would use Hulu without boxee and see the ads but the Hulu brand and ads wouldn't be connected as clearly as they would be online.
In a recession things like that can fly but when your trying to make money you gotta work for it.
There's a lot of early adopters and people using boxee+hulu, and pulling it means people will simply tune you out.
Boxee is taking off. Its users are voluntarily watching your ads. And, instead of trying to work with that and ride the wave, your tired media company is emasculating it. Sounds like the kind of brilliant logic that led the music publishers to destroy Napster, only stupider.
But now, they're here, and they want to play. There is a service and a userbase who are all clearly invested in supporting your legal content, sitting here staring content providers in the face. Surely entertainment hubris or ego will get in the way of things actually going smoothly in a situation like this, but its one of those times where I wish everyone would just shut up, play ball, and make money.
Honest question: don't you normally pay for ads, rather than getting paid for them? I must be missing something here.
2. They're hoping Hulu -because of its requirement of a computer- won't cannibalize their broadcast TV shows. In terms of their bottom line, Hulu > pirated shows on the Internet, but Hulu < TV.
Edit: nikblack explains it more eloquently in this comment: http://news.ycombinator.com/item?id=486620
How is bit-torrenting TV episodes illegal?
They are broadcast into my house for free, so why would it matter if I record them, or if Some Guy On The Internet records them for me? (I never watch TV un-timeshifted, so I don't see ads either way.)
Many startups face similar challenges and this reminds me of the struggles ones such as GlassesDirect.co.uk had to go through before becoming successful (they could have been crushed many times by Goliaths but fought through) - it had to close several times when major competitors and retailers tried to sabotage its business by forcing manufacturers/suppliers to drop GlassesDirect (else they would withdraw their vastly larger orders) and running smear campaigns in the press with false allegations about why using the service was illegal and substandard.
In this case, yes, content providers have a right to choose where/how their content is shown, but this is probably more to do with not getting licensing fees from Boxee than anything else. However, if they do not adopt/embrace legal methods such as Boxee (and insert extra adverts etc. to make the revenue they want), then they only encourage illegal methods.
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Concerted efforts to sabotage the new venture have proved fruitless. In September, his main supplier mysteriously dropped him. “They suddenly said they couldn’t do business with me. I reckon they had pressure put on them by a high-street chain. It took me a week to find a new supplier and re-do the website.” The trade press confirmed his paranoia when letters and articles appeared questioning the firm’s credentials and the General Optical Council launched an investigation. “Groundless attacks. I have fully qualified opticians working in labs, making the glasses. [http://www.realbusiness.co.uk/archive/4775601/feature-glasse...]
What an unpleasant predicament it must be to be in bed with such idiotic partners who just Do It Wrong so much of the time.
Why should you use it? It's a great step towards combining online content with a TV. It has a lot of pieces that are missing from AppleTV. (even though it's possible to install Boxee on AppleTV :))
That said, this is very unfortunate news. Just this week, I was contemplating replacing my cable with boxee/internet streams. Oh well.
This should work, but I get letterboxing on the left and right sides of my HDTV. I assume this is my TV, but who knows.
[Edit: it appears that Step 5 is unnecessary.]
Personally, I'm still working on a way to stream internet radio out over my iPod car adapter so that I can listen to it on the radio.