Television networks are fine with a lot of content being available on the Internet because they know that most people still watch television in their living rooms.  But how would the networks feel about all that content available on the Internet if someone made it very easy for people to watch that content on their living room televisions?

There is a software startup called Boxee, and most of you have never heard of it.  It works with AppleTVs (which not very many people have) and Apple Macs and Macbooks (which many, many people do have).  They are currently testing a version for Microsoft Windows.   What Boxee aims to do is very simple, it aims to make it easy for people to watch Internet video on their televisions.

While there are a lot of Macs and MacBooks out there, there aren’t very many hooked up to television sets yet.  But of the relatively tiny group of geeks currently playing around with Boxee, the number one request from the user base was to add Hulu.  So, last fall, Boxee started providing its users with access to Hulu.  They were in talks with Hulu, but never had any formal arrangement.

Now there will be no more Hulu on Boxee.   And I know most people outside of Boxee users won’t care or notice, but this is somewhat of a big deal.

I don’t want to confuse this with Hulu knocking its content off the CBS owned  It’s certainly been an interesting week for the Hulu team and the is a lot different than Boxee.  First of all, Hulu has to decide what it is, and it seems it is going through those decision making processes.  If it’s a content distributor that sells advertising, it should want to deliver it as far and wide as possible.  If it also feels the need to be a destination it gets more problematic.

If I were at Hulu I think I’d have taken exactly the same path that it has taken, and do, what it has done up until now focus on both distribution and destination.  You want to be a destination for sure, but if you’re selling ads on videos, you want those videos to be everywhere they can be.   But, once the reports come out about how is making headway and you begin to wonder if a primary reason is gaining ground on Hulu is because of Hulu, things wind up getting tricky in a hurry.   We haven’t heard the last of it.

We haven’t heard the last of the Boxee style stuff either, but the Boxee case is much more interesting.  The motivation was very different. First, if I’m to believe Hulu CEO Jason Kilar  — and I do believe him, the situation with Boxee was very different.  Hulu’s didn’t want to remove the content from Boxee.  Its content partners did.  Its primary content partners are NBC Universal and News Corp (which is the parent company for FOX).

Boxee is tiny, but has gotten a lot of coverage lately.  The digerati is talking about it all the time.  I think someone at the New York Times (I forget, where I saw it) wrote something like, “I’ve seen the future of TV, and it is Boxee.”

If you start asking yourself why do NBCU and News Corp care of their content is on Boxee, that’s where it gets interesting.   The television networks pay a lot of lip service to the Internet, and all of them certainly have very bright people focused on Internet strategies.   One of the lines they like to use is this:  Internet viewing of television shows isn’t cannibalizing television, it’s additive!   And though I probably mock the networks every time I hear this, I understand that it’s probably mostly based in truth.  At least from the networks perspectives.

See, the networks understand about behaviors.  They understand that for now, the lion’s share of people – way over 75% — they’re fine with catching up with something they missed on the Internet.  They’ll watch it on their computer screens and be happy to have been able to catch a missed episode or watch something a friend said they should watch.  But, when it comes to watching TV, they still want to watch it in their living rooms, on the couch, not on the computer.

In the echo chamber that focuses on Internet technology you might believe that everyone has abandoned cable and satellite TV for Internet viewing, and that one out of four people is fine watching all television on the computer, and that one out of four has stuff like Boxee hooked up to their TVs.  It’s not even close to reality.  It’s sort of the same thinking that breeds comments on our blog like, “I watch Gossip Girl, everyone I knows watches Gossip Girl, and nobody I know watches American Idol, therefore,  Gossip Girl is bigger than American Idol!”

And the TV networks know that, and understand TV viewing behavior way better than most people probably want to give them credit for, ourselves included.  So the networks, they’re fine with that Internet stuff because, from their perspective, it really isn’t competing with live television.

But then comes Boxee, making it easy for people to watch Hulu on their televisions!  The same televisions they watch…television on.  And how do they respond to that?  “NO!  HELL NO!”   Now, I don’t know if Boxee is the future.  And I don’t really know when the future is.  It could be five years, ten years or longer.  But the future of television is being able to watch pretty much whatever you want it, whenever you want it, wherever you want it, including TV.   Making all the FOX and NBC content easily available to a small group of early adopters is just the beginning.

As an aside, I like Boxee but I wasn’t a big fan of Hulu via Boxee because I have a pretty big television (61″) and while it’s outstanding for high definition content it’s so-so for standard def.  I’ve become a total HD snob to the point where I’m pissed off at Comcast when they have shows available via On-Demand but not in HD. Battlestar Galactica and Burn Notice are available on demand, but not in HD.  I record them in HD on the DVR, and they look great.  But the standard def versions don’t look so good and my experience with Hulu via Boxee on that TV was that it looked even worse.  That’s not a surprise and that’s something that will certainly improve over time.

Now is not the time for the networks to say, “Hell no!” to these technologies.  Now seems like a pretty darn good time for the networks to embrace such tech, and figure out  both how they can use it to promote their shows and make money.  In fact, Boxee seems like a great company for the networks to embrace. Its user base is small, but very enthusiastic.

Posted by:TV By The Numbers

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