Fred Wilson finds himself on two sides of the fundamental issue of our time: the user’s right to access data the way he or she wants to. On one side, that of the user, Wilson is an investor and board member of Boxee, a startup that translates web pages into a form more easily consumable on a TV screen. One site in particular, Hulu, just shut Boxee down at the insistence of the content providers for material on the NBC and Fox-owned site.
Boxee’s popular because it leverages Hulu’s free access to mainstream content in an on-demand solution. It’s the long-awaited rollup of TV or the computer, where on demand entertainment can be watched on the big screen under computer control. The studios don’t want us getting used to that methodology, especially not when it breaks out of the tightly controlled box where you can watch for free (ad-supported) or pay (DVD and Pay per view on demand) but not free on demand on the big screen.
The main reason for this is the one users mentioned in the Hulu comments, namely that the Boxee/Hulu combination encouraged users to quit using satellite and cable services and their DVRs and time shift off the Net instead. It’s a variant of the reason Apple doesn’t open up AppleTV to direct recording and playing of studio content so as to protect the pay to download iTunes service.
Fred suggests users don’t understand the distinction between watching via Safari or Firefox and via Boxee. That may be true, but we certainly do understand it probably has to do with the studios protecting the networks and the set manufacturers just like they did when they all stonewalled DVRs until enough competition developed between satellite and cable to trigger the dissemination of free recorders to encourage switching.
The other side of the Where’s My Data Home version game that Fred is involved in is Twitter, where he has a similar investment and board role. Twitter has spent much of the last month or so rate limiting its third party developers, degrading their user experiences and in some cases, killing the add-ons outright. While it’s hard to tell whether the blame lies with outages like this week’s slowdown of Twitter messages moving to FriendFeed (near real time to 30 minutes at last word), the net effect is to raise questions about the viability of the satellite service.
FriendFeed aggregates many different activity and news streams, but Twitter produces the lion’s share of traffic to and from the smaller site. None of this would be noteworthy except that Twitter has been anything but open about how and with whom they will share “their” data. The history of Twitter’s removal of Track, acquisition of Summize search services, and recent surfacing of packaged search terms suggests the long awaited business model is tied to controlling the data pipeline, much as the studios control theirs in the case of Hulu, Boxee, iTunes et al.
Wilson commends Hulu for being open and transparent and “allowing the community to discuss and debate this decision out in the open” on the Hulu blog. He’s right about Boxee and should take his own advice to heart and encourage Twitter to do the same about user’s concerns on its site. “Open and transparent” is the first step forward to a time when users can use third party sites such as FriendFeed without fear that they will be cut off from living in the new converged media reality. Right now even Facebook looks more responsive to user concerns than Twitter.
Twitter will probably sell a premium data stream with the rate card varying based on time delay.
Typical Steve Gilmore – complex thoughts, but on-target.
Could someone please point us to an example of an open model that is cash flow positive. Craigslist? Not really. Google? Of course not. Farming? Sometimes. Please give us one example.
Auttomatic
Craigslist, are you kidding me! They are making a killing!
Craigslist is not cashflow positive? Can you provide more info on that?
In any case, I am reminded of a Steve Ballmer quote about search, that I think applies even more to relatively simple social network tools that are increasingly inter-connected.
“it’s the easiest thing to switch out”
While both Facebook and Twitter are giants (or growing fast, in Twitter’s case) both have stumbled, and neither is perfect by any stretch.
Each is chasing the post facto (post success) business model Dragon and neither seems to be anywhere near the Princess.
I think his point is that CraigsList blocks other sites from scraping its data.
IPTV will ultimately render Hulu’s protests irrelevant. It’s just a matter of time.
Until then, they’re like music industry execs insisting upon DRM while consumers with digital music players work around them.
IPTV has great promise – a la carte programming, virtually infinite on-demand content, p2p data distribution with smart rules to pre-cache content etc all supported by suscription and targeted (ie better value) advertising but …. the very arguments that are currently causing pain at Hulu and downstream re-users of the content like Boxee are going to continue to hurt any chance of real progress.
I’d be happy to pay for content. I’d be happy to have it wrapped in DRM as long as there was a concept of fair use (if I buy it let me keep it forever. if I rent it enforce the terms I agreed to but let me watch/listen on multiple devices if I want etc)
The problem is … no-one has worked out a viable model that will allow the incumbent riders of the gravy train continue to make money while producing decent content (though the quality of a lot of content the studios deliver is questionable now as everyone heads for low cost RealityTV programming!)
Interesting issues debating data pipeline control.
The Boxee/Hulu solution for accessing mainstream content under computer control seemed close to perfect.
Hoping this is a mere bump in the road as we edge closer to true converged media reality.
If the studios and networks would just embrace Internet technology they would be making bank. The more they fight the more the end user finds ways to do it themselves, eventually not ever needing their proprietary players and DRM’d videos.
It happened first with music — see Napster and all of the P2P clones that followed. Now we have BitTorrent and flash-like video that actually works. If they wait any longer they will effectively cut themselves out of the loop.
I download my TV shows on BitTorrent and then play them on my plasma via my XBOX360 and PC. No commercials, no waiting, and I get them all in one place.
iTunes has sold 1,000,000,000+ songs. When are they going to learn?
It’s the same lot as the music execs. Instead of learning to make money off data, they are going to cut off their noses trying to protect the content, which is a losing battle.
Why would they want a bunch of free word-of-mouth marketers showcasing their content to their friends? I’ll not quote Cory Doctorow here. They can look him up. Maybe pay him for some advice! LOL.
Awesome. You managed to take an argument about one of the current hot topics in tech and turn it around to your crusade about Twitter. Here I as thinking I would get some insight into the Hulu vs Boxee debate and why Fred Wilson is importat to all of this.
Wow, I think the situation is simpler than all this: Hulu will soon offer their own Boxee-like environment and it’ll be a lot easier to control ads and other monetizing schemes if they are not running content via a third party. Hulu simply is nipping Boxee in the bud before it gains a large following. Rightly or not, they probably have succeeded.
MediaMall playon STILL STREAMS Hulu to your HDTV.
Who gives a crap about Boxee.
Reminds me of what happened to the music industry when the content providers tried to maintain their analog-age business models at any cost. The audience shrunk because they refused to put up with the nonsense. Which isn’t the same as “can’t monetize” by the way. But how much should I spend per month on cable, internet. netflix, mobile data plans and for ^%^&* studio-produced least-common-denominator ENTERTAINMENT??? I don’t think it’s sustainable folks…
One wonders if in these tough economic times, we’ll see more of old media reverting to bad (distribution) habits.
You can already imagine the meeting of the suits:
“There’s a time for vision and a time for counting beans. We’re in bean counting mode right now. If we piss off any of our PAYING distribution partners or lose even a smidgen of control that can otherwise be monetized, it’s just not worth it.”
That said, I believe the exact opposite; namely, now is the time for long term planning, to deepen your engagement with consumers and create new value chains, so the move by your media partners is truly penny-wise, pound foolish.
A smarter path would be for old media to work with Boxee to gain deeper user/usage insights so they can better understand how new media consumers are digesting and propagating their content.
Alas.
Mark
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Read: What it Means to be a “Social” Media Center: Boxee, Apple TV and Square Connect (http://bit.ly/qc5hA)
I download all my TV shows from Bittorent. Why? Because there’s no legal alternative in Canada. I want my show on my HDTV, commercial free and of course, in HD. Where’s the offer? Where’s the content? No where to be found. I’m willing to pay but no one offer me the possibility to purchase Lost in HD in Canada.
And if you ask, no I don’t have a cable/satellite subscription. I don’t need to pay 50 bucks+ a month just to watch 2-3 TV shows.
So again, piracy is still the best alternative.
Steve DECAF!
also Twitter is a joke – let’s all agree to get past our fascination w/ a crude SMS to web gateway. The telco’s are going to roll them up within the year. And it’s really not that interesting of an application.
Is there an editor there? Not just for spelling errors like ‘degarding’, but for readability issues. These aren’t arcane mystical incantations, the arguments can be made in plain English– and usually should.
‘On-demand’ should be hyphenated. The first sentence uses abbreviated and possessive apostrophes when an ‘is’ in the first case would never require re-reading, etc. I dare you to read the second sentence of the fourth paragraph aloud and not fall to your knees, weeping for some form of punctuation.
I would love to exercise my right to access this data in the way I choose– readable English. Barring that, make it a lot shorter.
Ah nothing brings out the grammar trolls quicker than a mispelling.
Anyway, this was a very well thought and expressed article. I made comments on another site last month about how retarded it is for Hulu’s content partners force them to remove content instead of going long tail. This action isn’t too far removed from that argument. They need to put as much of their content out into as many venues as possible.
Anyway, this was a very well thought and expressed article.
No it isn’t. You can see that he’s capable of rendering a competent analysis, but this isn’t it.
steve,
i get your point and will plead guilty as charged to finding myself on both sides of this issue
but there’s a big difference between hulu saying outright no to boxee and twitter rate limiting its api
twitter’s been clear about the api thing. it’s a scalability/reliability issue and they are working hard to scale the service and api to the point that they can offer more.
twitter doesn’t charge for its api and has allowed people to build pretty much anything they want on top of twitter.
there’s a big difference between the two situations
Do you think the main reason Hulu’s overlords axed Boxee support was that ad revenue on Hulu per episode is currently less than they can get through traditional broadcast channels?
I realize this is an apples to oranges comparison, but still…
i don’t really know the reasons for this and boxee’s management is hoping to engage in a discussion with Hulu and their content partners to get this fixed asap
pretty much anything but Track, that is, Fred. And Track is very much similar to Boxee’s value add.
I can’t word my sentiment better than Fred:
“twitter doesn’t charge for its api and has allowed people to build pretty much anything they want on top of twitter.
there’s a big difference between the two situations”
Steve, I’ve been quoted for addressing people
who were given a free (complete) class for a month, had success, then found out there was
a version others had paid $900 for and screeched at the publishers;
“you should have given us that one for free you bastards”.
Your typical thinking, like the overzealous friendfeed defenders (I love friendfeed and they’re good dudes, but they wouldn’t have a pulse without twitter’s generosity).
“It is ugly to demand as a socialist, the tools to be a capitalist” -@Ed
“It is ugly to demand as a socialist, the tools to be a capitalist” but human nature and history shows that they invariably do, which is why socialism doesn’t work. There’s probably a decent analog to zero-cost content and services here. But a pox on both houses, the capitalists also rig things so that I need to pay $hundreds per month for the channels that give me access to the content and services. Any opinions on whether that revenue stream is fairly apportioned?
Steve, you hit the central hypocrisy of Web2 promoters. Use influence to deride others on openness, transparency and APIs – but make sure you control the critical component. For TV, that would be the interface, Boxee. The victim of the abuse is the content business, Hulu. Of course they are now implicitly demonized as — anti-technology, unopen, unfair, untransparent, immoral, outdated, etc. I’m tired of the implied ‘character attacks’ on others’ businesses and brands – e.g. ‘old media’. It’s as transparent as playground bullies – but last I checked, NBC and Fox paid to play.
The guy in the pic looks a bit like Rahm Emmanuel doesn’t he?
Protecting content might be a losing battle but how do we expect the content producers to make money when we want the content to be available everywhere for free?
Advertisements usually pay for it but once the content ends up on a UGC site the ROI is close to zero.
Eyeballs are great to launch something but I don’t think those UGC CPMs pay the bill.
BitTorrents are having a ball with U2′s latest.
U2′s concerts will probably make up for it but not everyone’s in a similar position.
The only way for content producers to protect their TV programs is to sign license deals with sites that distribute the content.
What happened to Boxee should not be the end of Boxee, it’s just a sign Boxee needs to start negotiations or change the business model.
I’m not sure those negotiations will be succesful because is Hulu waiting for another iTunes?
I use iTunes a lot but it sort of became a very powerful player and I don’t think Fox and NBC want that to happen to someone else when they themselve can have it all.
I think it’s extremely difficult to make money in a browser based environment because people got used to having everything for free.
iTunes is a program and so is Boxee, which makes it easier to charge money.
I have no clue what business model the Boxee guys have in mind and I never used it but I can see why it’s a big threat to Hulu.
Hulu’s browser based and if they can pull off what I think they are about to do then there’s no way they will share their own content (Hulu’s a joint venture of NBC and News Corp) with someone else.
Did Boxee & CBS’ tv.com help Hulu reach its tipping point & now they are no longer needed?
I haven’t looked at the numbers but it wouldn’t surprise me.
I hate to say it but when Boxee folds because of this or when Boxee signs a licensing deal : content will become king again.
And about Twitter. I could be wrong but it’s a vertical search engine in the making.
The question to me is is Twitter better off when it looks for conversations / status updates / intentions coming from inside Twitter or when it searches for those in other places as well?
When Twitter manages to combine the conversations taking place in some very specific communities would it be a smart idea if Twitter gave those communities a percentage of all profits?
It would be like having adsense on your website but you’re only making money when someone does a search on Twitter and the conversations on your site are being used to monetize that search (or stream).
Nice story Steve, boxee is doing everything they can to be open and transparent and LEGAL with content that goes into the service. It’s interesting to see the user backlash against Hulu – with the early adopter community stating they will go to torrents (without ads) in result to their pulling from the service.
From what I have seen from twitter at such an early stage, which is growing even faster than boxee, Twitter has done everything that they can to allow open connectivity into their platform as well. As we all hate the fail whale, I can understand their limiting. As more clients tax their system inefficiently, I can see more limitations coming into play.
As for the Hulu/Boxee situation, Hulu is held between a rock and a hard spot with their content holders. They love the extra traffic and ad views that they receive, 100k streams from boxee last week alone. It is my opinion that they were not running their IP ad network effectively – by showing PSA’s during two or three week old programming. They will figure that out with better algorithms, weighting, etc.
As for Hulu being stuck between a rock and ahard place: this little sword fight is just a posturing game – no different than YouTube had with the networks in 2006 and 2007. I would have thought that we had this “figured out” after those days. It is 2009, but old media got scared. Own it guys. Don’t run from it.
On a positive note, check out the boxee initiative to have users create the language for the media companies to wake up and smell the digital coffee. http://boxee.pbwiki.com/
Meh. I had IPTV in college, and I’m gonna be honest, it wasn’t great. Hulu is really fine – it works just as well for time-shifting, and if I want anything better than that, I want to be in my living room, on my DVR and a big TV, far away from my computer as possible…
I have been using Hulu for a some time now. I am able to keep up with some of my shows if I miss them due to working late here. It is very convenient and I have not had a problem yet.