In the midst of all the excitement around new business models and the internet revolution it's easy to forget that the old order continues to exist.
The latest demonstration of this comes from Hulu and Boxee. If you are in London you'd be forgiven for saying "who on earth are these folks?" as both of them have almost no impact over here - as you can't get the content you want (which would be BBC iPlayer and the ITV, Channel 4 and five services on Boxee please)
What's happened? At the content owner's request Hulu has asked Boxee to remove Hulu's content. Boxee has agreed. This was at the request of the content owners it seems. The consumer seems to be the only loser here as this makes rational sense for all the 3 parties. So what is going on - let's look at the perspective from each of the three parties.
Content owners
The main current source of revenue is from cable subscriptions and TV advertising on cable. While they are interested in exploring new models for this (hence the investment in Hulu) at the moment the overall majority of revenue comes from traditional routes. Boxee threatens those - people can replace their cable subscription and set top box with a device running Boxee and get the same content. Thus reducing the revenue stream from the traditional route, with no clear replacement yet. So as a content owner if I want to continue to fund exploration in new business models I need to maintain my revenue stream - accordingly shut down Boxee
Hulu
Hulu's is utterly dependent on it's content - without the content Hulu has no value proposition - so it needs to make sure that it keeps it's content providers (and owners!) happy. While Hulu provides the potential to monetize the internet traffic the problem isn't solved well enough yet. So Hulu needs to comply (though it must be frustrating as this means that they can't explore the possibility of monetizing the content on TV sets).
Boxee
They need to comply - otherwise they risk both lawsuits, and an escalating technical arms race as Hulu engineers come up with an inventive way to "turn off" Boxee, and Boxee's engineers come up with workaround solutions. This would ultimately be destructive for both Hulu and Boxee - as it diverts resource from their respective core value propositions - Hulu's is monetizing video content on the web, and Boxee's is bringing high quality TV experience with internet video.
So - what next? I'd expect that we'll see similar solutions come back in the future - it's in all parties interest to get this to work - I'm sure Boxee would happily license to Hulu and their content providers a solution for a "next generation" set top box.
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