Ellen Stutzman, WGAW Research Director, wrote this for the WGA website.
It has been a year since the strike was settled, the contract ratified and writers returned to work, and in that time the world of New Media has continued to spin forward. Hulu’s rapid ascent into the top ranks of online video sites has demonstrated the Internet audiences’ appetite for television and film content, creators like Joss Whedon and Seth MacFarlane have found success with original New Media content and more than 1.4 million unique viewers streamed episodes of Lost on ABC.com in December 2008. Now, the cable companies may be throwing their hat into the online video distribution ring and Hulu has pulled its content from other sites and services, demonstrating the growing importance of online video and struggle for control over where you turn for content. The growth of the online video market highlights the need for a service that presents content in a way that allows viewers to easily find what they want, and you better believe that the media conglomerates and the cable operators want to be who consumers turn to for this decision.
A January 17 article in The New York Times presented a free software download called Boxee, a service that combines multiple online video sources into an easy to use interface, which can be connected to your TV. (Insert article link.) Boxee searches sites like YouTube, Comedy Central, Hulu and CNN to provide consumers with video content they are interested in watching. It’s an attempt to create a network of online video site options through one interface, which seems like an ideal development given the multitude of sites and video options that consumers must navigate. However, in late February Hulu announced that it would no longer allow Boxee to search its site for content. Apparently this was done at the request of Hulu’s content providers (think Fox and NBC). Hulu has also pulled its content from the CBS-owned site, TV.com.
In February, the Wall Street Journal reported on discussions between cable providers and TV networks over online video access to cable content. Cable providers, like Comcast and Time Warner, would like to offer cable subscribers online access to cable TV content. This is an attempt to maintain current cable customers and establish control over access to online video. While the cable networks are coming late to the online video party, their dominance of the TV market and ability to deliver Internet content through an already built-in base of set-top boxes may give them an advantage in the pursuit of the Internet-TV connection.
Hulu is aiming to establish itself as an online brand, one that consumers turn to for television and film content. It doesn’t want consumers thinking that a service like Boxee will deliver the content. But Hulu’s viability as the ultimate source of online content is limited for a few reasons; it tends to emphasize NBC and Fox programs over other content, it buries original new media content on its site and its backing by two traditional media conglomerates will hamper its ability to truly develop into an online distributor that is agnostic to the content it delivers. The entrance of the cable companies is an interesting development. They have a vested interest in maintaining their current revenue stream of cable subscribers, which is motivating them to enter the online distribution business. All these moves represent the growing struggle for dominance in online distribution.