ABC On Hulu Makes Apple TV Look Bad

May 1, 2009

Hulu just announced ABC will add their shows to the hugely popular video website. The only major broadcast network not on Hulu is CBS.

In my particular living room, this is a big deal, as my wife watches Grey’s Anatomy, purchased through iTunes. Now that the show (if it isn’t put out of its misery) will be on Hulu, and Boxee continues to provide Hulu (against their will) on the Apple TV (yes, there are a lot of middle men there: ABC -> Hulu -> Apple TV -> Boxee -> Television) but the point is, instead of paying Apple to watch the show, most likely we’ll just watch it via Hulu.

So ABC’s move to Hulu has me asking a larger question – if Apple’s pay-for-play strategy is the right one. The more I grow comfortable with the idea of video delivered over the Internet via sites like Hulu or Netflix Watch Instantly, the more I feel subscription and streaming is the way to go.

Downloading has become too much hassle, mostly in terms of file management. I download TV show to the desktop streaming to the Apple TV, otherwise, the Apple TV would quickly become filled with episodes and rentals (it’s a 40GB version). That amount of stroage isn’t enough for a full season of any show, especially with HD. The iTunes download set up works great for music but less so with 600MB to 1GB files.

Even with movie rentals downloaded directly to the Apple TV, I’ve occasionally run into frustration. I start watching a movie that is partly downloaded, and it shows up as a white screen. The work-around is to let the movie completely download and restart the Apple TV. The complete download part is key, because I once restarted the Apple TV and the movie vanished, necessitating an email to Apple to get a refund. All not fun, since waiting for a whole movie to download means at least ten minutes if not more.

But back to Apple – Boxee demonstrates streaming is technically possible on the Apple TV.  There has been some speculation that Apple would do well to change its content offerings to a streaming model. There’s got to be a middle road where Apple still makes money and doesn’t cannibalize sales of shows proper.

Say theycharged a monthly fee for streaming access to everything produced by a particular show or channel, with higher quality than Hulu, and no ads. No ownership of the files to push to your iPod, if you want that you can do pay for play.

The monthly fee would allow us to forget about pay per play and just enjoy the shows. This would essentially be the ala carte model people want from cable, and that cable companies are reluctant to offer, that currently exists in the iTunes Store, but without the download part. I’d sign up immediately. An even bigger bombshell would a Netflix style service where you pay a monthly fee for streaming video. I need to lie down now.

Streaming is so much more satisfying and more TV-like. Our Roku Box has been hassle-free since purchase. The ala-carte model described above is basically what Amazon On Demand provides through the Netflix Roku Box. But that situation of too many middlemen is a bit annoying (pay Netflix for the hardware and Amazon for the content). Apple could do the whole streaming hog in a more elegant, particularly Apple way.

Or they could just add Hulu support to the Apple TV, but I don’t think that will happen.

Comments

  1. jcieplinski says:

    The thing you're missing here is that without an unsanctioned Apple TV hack to get Boxee, and thus Hulu, onto your Apple TV, Hulu wouldn't be nearly as satisfying. You'd be watching TV on a computer screen, which no one really wants to do. Which is why networks permit it to happen. They way they see it, only a niche audience will completely drop standard TV and its ad-driven model for Hulu on a computer. They think of Hulu as a side-show. Something people use to catch an episode they accidentally missed.

    So of course all the shows you want are available via Hulu. There's no threat there to the network's lifestyle. For Apple to get access to that content, they'd have to convince the networks that your scenario described above, with you dropping cable for all-streaming, all-the-time subscription plan, WOULDN'T happen. Because if that were to become the norm for TV watchers, TV networks would no longer need to exist. Shows could be produced independently, distributed via Apple, and survive based on quality, not corporate backing and giant budgets. The way indie record labels are now given equal opportunity to the big four.

    In other words, the people would be in control of their collective entertainment destiny. And no one would have to pay the million-dollar salaries of NBC/ABC fat-cat execs. Would you let that happen if you were CEO of CBS?

    There's no doubt in my mind Apple wants to make the Apple TV a better solution. But TV execs know their recent history. They watched Apple practically take over the music industry over the last few years. They don't want to see themselves similarly marginalized. So they offer competing services better deals, in order to keep the power centered around themselves. If no one company wins the distribution fight, they all have to keep coming to them for content.

    And don't think the cable companies aren't putting enormous pressure on the networks, either. They have a lot to lose in this battle, as well.

    The customer will continue to lose in the short run, but eventually, digital distribution and the end of traditional advertising as a way to fund TV is inevitable. Sooner or later, we'll all be streaming shows on-demand, watching no commercials, and paying a-la-carte. And everyone in every show will be drinking a Pepsi, going to Starbucks, eating at MacDonald's, etc.

  2. webomatica says:

    True about my using Boxee on the Apple TV. That's definitely a niche
    activity, and involves a lot of nerdy-hoop jumping.
    But what about the point of simply augmenting Apple's download model with
    streaming? Meaning, pay Apple for Hulu or Netflix Watch Instantly -like
    streaming of all the content that's already in the Apple TV store proper.
    Seems that would be an easier sell to the studios than pay for download – no
    threat of piracy if the end user doesn't download a file.

    And lastly, this subject is continually fascinating to me because a huge
    library of on demand video distributed over the Internet is technologically
    possible, yet all this corporate jockeying behind the scenes over who gets
    to be the gatekeeper keeps changing the equation. I have no doubt as
    consumers we'll continue to lose in the short run (Hulu blocking Boxee is
    only one small skirmish). Also on the radar are bandwidth caps, the cable
    companies coming up with their own streaming video offerings, and (fingers
    crossed) Apple releasing an new Apple TV.

  3. Magician says:

    I have owned the same Apple TV since it's initial release.
    The white screen bug is something I have never come across and we use it a lot (at least 4-8 movies/shows a week).
    Given what you describe I would return it for repair.

    As far as speed it is amazing. Once I Rent or purchase a movie. a box pops up within ONE minute that it is ready to watch!
    I haven't a clue how they compress and uncompress HD content that fast. Naturally it is streaming in the background until downloaded but it never stops to “catch up”.

    We have it receive the movie with the built in WiFi from a Fios wireless router downstairs.
    Perhaps the fact that we are using FIOS is the key.

  4. Magician says:

    I have owned the same Apple TV since it's initial release.
    The white screen bug is something I have never come across and we use it a lot (at least 4-8 movies/shows a week).
    Given what you describe I would return it for repair.

    As far as speed it is amazing. Once I Rent or purchase a movie. a box pops up within ONE minute that it is ready to watch!
    I haven't a clue how they compress and uncompress HD content that fast. Naturally it is streaming in the background until downloaded but it never stops to “catch up”.

    We have it receive the movie with the built in WiFi from a Fios wireless router downstairs.
    Perhaps the fact that we are using FIOS is the key.