Hulu Controversy Reveals Online Video Trends

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Hulu and online video and content distribution

Two controversial moves this week by streaming video site Hulu highlight the obstacles that remain for distributing premium content like TV and movies across the Web.

Hulu, a joint venture of NBC Universal and News Corp., pulled its content from TV.com, a competing video site owned by CBS since last June, which it acquired through the purchase of CNET Networks. Spokespeople for Hulu and CBS did not return requests for comment by press time.

Separately, Hulu drew the ire of fans of Boxee when it began blocking its content from the Web-to-TV service.

In a blog post entitled “Doing Hard Things,” Hulu CEO Jason Kilar broke the news that some of Hulu’s content providers had requested that the site make its programming unavailable to Boxee, and that it reluctantly complied.

Kilar’s comments get at the heart of the growing pains facing emerging, premium-content models like Hulu.

“While we stubbornly believe in this brave new world of media convergence — bumps and all — we are also steadfast in our belief that the best way to achieve our ambitious, never-ending mission of making media easier for users is to work hand-in-hand with content owners,” he wrote. “Without their content, none of what Hulu does would be possible, including providing you content via Hulu.com and our many distribution partner Web sites.”

The 146 comments on Kilar’s blog post express a mixture of consumer outrage, dismay that content providers would be so “short-sighted” for not embracing a legal, revenue-producing distribution model, and warnings that their moves would drive some disillusioned users to piracy.

Content deals on a tear

Hulu has been a hit with users because it offers premium content from more than 130 providers for free, supported by brief pre-roll and mid-roll advertisements. Since its March 2007 inception, Hulu has been quickly striking licensing agreements with TV networks and movie studios, although CBS has remained aloof. (CBS content has been available through Hulu, but only via a link back to a CBS-owned site.)

Now, neither CBS nor Hulu is commenting on the prospects for Hulu’s content to reappear on TV.com. However, the TV network did shoot back at Hulu’s move, reasserting its distribution rights.

“CBS Interactive is well within its rights to stream Hulu video content on TV.com under its agreement with Hulu,” the company said in a statement. “We are evaluating our next steps at this time.”

Hulu had a licensing agreement with TV.com to pipe its content into the rival portal prior to its post-acquisition relaunch by CBS in January. The lack of reciprocity has been offered as one explanation for Hulu’s decision to pull its content.

In addition to TV.com, Hulu also has content distribution agreements that have landed its videos on Yahoo, MySpace, AOL and other sites around the Web that embed its video player.

This article was first published on InternetNews.com.