Ah, Hulu. The online TV streaming service has been leading a life of contradiction from day one. It's been trying to build a service that can successfully "compete with free," while being owned by the TV companies, who are scared to death of cannibalizing their own business. We've discussed in the past how this puts Hulu in an impossible position. The fact that it regularly has to have its engineers block access to any device or software that surfs the web over a TV is just one ridiculous example. Danny Sullivan perhaps sums it up best in his review of Google TV, after discovering that Hulu is (of course) blocking access to anyone using Google TV:

Hey Hulu -- you kind of suck. I'm not trying to access you from Google TV. I'm trying to access you using a web browser, which just happens to run through Google TV. Explain to me again why if I hook my computer up to my TV, and navigate to Hulu to watch the shows you offer for free, that's OK. But if I use my Google TV computer, that same free content is verboten -- and the only way for me to get to it is if in the future, you decide to make the free content available through your not-so-free $10 per month Hulu Plus service that's not even available beyond special invites on your own site.

Here's a thought. Enough of blocking Google TV and apparently other services like Boxee. Either block EVERYONE on the web or block no one, because in the end, you turn people who love you when they reach you on their computers (like me) into people who hate you when they're blocked in other places (like me).

Admittedly, Hulu is apparently getting pressure from the TV companies to do these blocks, but it still makes no sense. All things like Boxee and Google TV are doing is providing a browser. As Danny notes, if I just hooked up my laptop to the same TV, I could watch Hulu just fine. Why is it a problem if it's using a different piece of hardware? It makes no sense.

Of course, Google is now negotiating with the networks to "allow" their content to be viewed on Google TV. Is it just me or is this extremely troubling? How would people react if, say, the New York Times suddenly announced that it would not be viewable on Dell computers or in Firefox, unless Dell or Mozilla paid up? People would go nuts. Yet, that's exactly what is happening here.

In the meantime, we've already covered Hulu's ridiculous paywall plans, which even the company admits completely suck. Rumors are now spreading that so few people are interested in getting pretty much nothing for $10/month, that Hulu is now planning to cut the fee in half. Of course, if they're blocking access to random browsers for whatever ridiculous reason (and still not going ad free), then why would anyone pay?

We've noted, multiple times, that the entertainment industry has an incredible ability to simply declare that any new innovation is clearly going to kill the old industry, and every single time they've been wrong (often ridiculously so). Of course, the most famous may be Jack Valenti's claim that the VCR was the "Boston Strangler" to the movie industry. But this kind of ridiculously wrong predicting happened throughout history. One of our readers, Craig, points us to a fantastic program put on by the CBC radio up in Canada, culling through the archives of old interviews and re-airing them, including a series of interviews with "leading ladies of Hollywood." That link is actually to the second part of the series. You can find the first part here. Each episode is a series of interviews. The final interview in the first part is a few minutes of a talk with Mary Pickford, who not only was a huge Hollywood star in the early days of Hollywood, but also cofounded the movie studio United Artists (with her husband, Douglas Fairbanks, and Charlie Chaplin), and was one of the founders of the Academy of Motion Picture Arts and Sciences (the folks who put on the Oscars). The interview then continues into that second part of the series.

So why do we care? Well, take a listen to the interview in part 2, done in May of 1959 with the CBC's Tony Thomas, where Pickford starts complaining about how television is killing the movie industry, and warns especially about the pernicious intent of pay TV. Starting around 27:40 in the recording, she claims that TV is going to takedown the motion picture industry:

Pickford: I, in my short life, have seen the birth and the death of motion pictures.

Thomas: You think the motion picture has died?

Pickford: Mm hmm.

Thomas: But why should it?

Pickford: Because of the competition. Uh, you know. You can see the old motion pictures, that are just as good... or better than some of them today. And why should people leave their house?

Thomas: But you can see a picture so much better on a big screen in a comfortable theater than you can on a box in your living room.

Pickford: Well, that's true. But it's very expensive, and we have to face the fact that at one time there was 17,000 theaters -- I don't know what the number is today -- but it breaks my heart to go by them today and see them... bowling alleys and skating rinks. Certainly, the motion picture will always be there, but I believe when paid TV comes in, and I'm sure it'll be less expensive than going to the theater, that it'll be the real death knell of motion pictures.

Sound familiar? Of course, there's nothing wrong with making a bad prediction. We all do it. But, when the industry "insiders" are so consistently dead wrong about how every new technology will "kill off" their existing industry, at some point, shouldn't we be asking why people still take them seriously when they do it again?

One of the nice things about most tech issues is that they're not split down typical political party lines. In practice, tragically, that sometimes means that both of the major political parties side with rent-seeking interests, rather than the public good, but in other cases, it does mean that you can get actually cross-party discussion on the issues, rather than the talking points. However, it seems that whenever any particular issue gets "big enough," it suddenly has to break down on party lines. We saw it happen with net neutrality, but now it appears to be happening on the whole silly retransmission fight between cable companies and TV networks. As mentioned, these fights break out every few months, with both the networks and the cable companies blaming each other. In the end, consumers end up with higher prices either way. The whole fight itself is silly, but when TV stations get blocked during key sporting events (football, baseball playoffs), apparently Congress immediately sees an issue worth grandstanding over.

And, as Broadband Reports notes, at least in the case of Cablevision/Fox, it's become a partisan issue, with Democrats lining up behind Cablevision, introducing legislation that would bar broadcasters from pulling channels during negotiations. Meanwhile, Republicans are being lobbied heavily by News Corp to take its side. It could just be that it's because this is News Corp./Fox, which tends to support Republicans. So it will be interesting to see if similar battles involving other broadcasters split along similar lines...

These days, fights between the TV networks and cable providers are so common that we stopped bothering to report on them. Basically, every few months, there's a fight over how much money should be paid to carry the networks, and the two sides get angry, a public relations brawl ensues with threats of channels being removed (or, the channels are removed for some time). Eventually a price is agreed upon between the networks and the cable providers... and the consumers pay more. Great, huh? Of course, some have been suggesting that these fights could drive the push for people to ditch cable altogether, and switch to going purely online.

Except, in the latest such fight, between Fox and Cablevision in New York, things took an odd twist, with Fox not just pulling its network from Cablevision, but somehow getting Hulu to block access to Fox shows to anyone accessing the site from Cablevision. Apparently, after people started asking questions, Fox/News Corp. changed its mind and let Cablevision subscribers view Fox content on Hulu again.

However, this does raise a bunch of pretty serious questions. First of all, why did Hulu consent to this move? If Hulu were serious about its offering, it wouldn't agree to take part in a silly fight like this, singling out people on a particular ISP. Once again, though, this shows how Hulu is way too beholden to the content providers. Second, while this is not really a "net neutrality" issue, it's somewhat surprising that Fox/News Corp. would take a step like this that undoubtedly will be talked about in "net neutrality" terms. Any move that specifically restricts content to a certain class of users isn't going to be looked upon kindly. Finally, in what world did News Corp. think this was a smart move? Did they actually think that users would be so upset that they'd asked Cablevision to raise their bills to bring Fox on Hulu back? Of course not. They're simply going to blame Fox (and Hulu) for pulling their shows.

While it's been talked about for ages, the Senate has now passed a bill that attempts to force TV commercials to be at a similar volume to the shows that they're paired with. As many people have complained over the years, it often feels that the commercials are set to a much higher volume to gain attention. Of course, in reality, this tends to annoy more than anything else. The so-called CALM Act (Commercial Advertisement Loudness Mitigation -- we really need to stop cutesy naming of bills) gives the FCC the mandate to make sure commercials are at a reasonable volume. The House has passed a similar bill, and once the two are aligned, it's likely this will become law.

However, as John Abell points out at the Wired link above, this probably won't matter too much. Fewer and fewer people seem to actually watch TV commercials these days, and more TV viewing is shifting to the internet (where these rules won't apply). And, while I agree that louder commercials can be annoying, is this really the sort of thing that needs to involve the federal government?

We were among many, many folks who were completely underwhelmed by Hulu's subscription plan for Hulu Plus. It was $10 for... not much. In fact, new reports are showing that 88% of Hulu Plus content is available via regular Hulu. On the whole, if they are going to lock up content, I'm actually glad to see them keep most content for free, but it's still not clear what additional value they're offering to get people to pay up, and customers are noticing. It seems that Hulu actually recognizes this, however. Consumerist has an email that someone from Hulu sent to an unhappy Hulu Plus customer about the weak selection and the need for ads even though she had paid, and the letter basically admits that Hulu knows Hulu Plus sucks, but they're limited by annoying contracts and they're trying to change it. Yes, it's a bit of a paraphrase, but that's certainly what's implied here:

In the ideal world, we would absolutely love and want nothing more but to be able to get every popular show out there that users love, and acquire the legal rights to stream them across every fancy device imaginable at the price that everybody wants. Unfortunately, due to stringent contract agreements on how content can be shared through certain devices, we are not able to have all of the content that everyone wants at this time.

Of course, this all comes back to the same thing we've said before. Hulu's in such a difficult place because the company needs to keep other companies so happy that it can't disrupt the businesses it needs to disrupt. You simply don't disrupt legacy businesses by working within their guidelines.

There's a NY Times article that appears to have a bunch of cable & TV companies congratulating themselves for beating the internet in getting people to keep paying high monthly premiums to get premium TV channels on their TV, rather than using some of the various internet solutions out there. Like so many awful NY Times "trend" pieces these days, it appears to key off of a single anecdote of one guy who tried to ditch cable, and then went back after a year. How many people are actually doing this? No idea. It's not like the reporters at the NY Times tell us. They do tell us that not too many people have dropped cable, but that's hardly surprising. What's much more amusing is the suggestion that the cable and TV companies have somehow "beat" the internet by restricting content:

In part that is because the television business took action to avoid the same fate. Heavyweight distributors and producers have protected their business models by ensuring that some must-see shows and live sporting events cannot legally be seen online.

Legally. Yes. But, just wait until you see what that enables on the less-than-legal side of the internet. As for the fact that people aren't dropping cable yet, this all really sounds like the cable companies not recognizing how trends accelerate. They do, indeed, start slow, and as Clayton Christensen has noted for years, the incumbents don't pay attention early on, because the other solutions just don't seem as good. And... here in the NY Times article we get:

Technology companies are pushing alternatives like Web-connected set-top boxes. But these are still not as easy as signing up for cable or satellite service, particularly for those who want to watch on a big flat-screen TV and not a computer.

Classic innovator's dilemma statement. It's certainly true that, right now, it's not as easy to use these internet services as it is to sign up for cable, but it's getting easier all the time, and sooner or later, someone is going to create a breakthrough service that makes it really easy. We've seen it time and time again. Napster did it for music file sharing after we were told that people didn't want music online. Vonage did it for VoIP after telcos insisted that VoIP quality would never sell. Who knows who it will be, or when, but someone will figure it out, and then we'll see the cable and TV companies freak out, because the cable cutters will shift into high gear.

This is the problem we were discussing recently, where disrupted companies simply don't recognize the speed at which a disruptive offering catches on when it does finally catch on. They think that they're successfully "protecting" their existing business with things like Hulu's subscription plans, but that will cause them to miss the truly disruptive innovation.

At least the NY Times article hints at the growing undercurrent, in noting that the younger generation is four times as likely to go without a cable subscription. That number is just going to grow, and as new offerings come along that make it easier and easier to get what you want, when you want it, without silly restrictions, the idea that the legacy guys "beat" the internet by restricting access to content will seem laughable.

Update: And look... just as this is published, out comes the news that cable TV has suffered its first ever decline in subscribers. Nice work, NY Times, in pitching a whole story based on a single anecdote, about how cable has nothing to fear... just as the numbers come out to show that people are, in fact, cutting back on cable subscriptions. I'm sure stories like this will make the upcoming NY Times paywall that much more valuable.

A year and a half ago we questioned whether or not Hulu could really survive, given the rock and a hard place situation it had put itself in by being owned by the content rights holders, who wanted to limit what Hulu could do in competing against the rest of the online world. This limitation by its owners was quite obvious in the recently released subscription package that felt wanting.

Now, Hulu's CEO, Jason Kilar -- who, it should be noted, has always appeared to fight for consumer interests against the demands of Hulu's owners -- has come out and said, quite clearly, that Hulu is not trying to "kill" cable. In other words, he's signaling to the world quite blatantly: Hulu is unable to do the one thing it needs to do to be a successful business.

If Hulu were a truly independent business, the main focus of that business would be to flat-out disrupt the monopoly cable TV business. That's a huge opportunity. But, of course, Hulu's owners don't want that, because they're in this neat symbiotic relationship with the cable companies, where those cable companies keep paying more and more money to the TV companies just to carry their shows. So they don't want to upset that business model -- even if it's incredibly anti-consumer. So, because of that, Hulu can't do the one thing it needs to do. It's telling, by the way, that the only people in our comments, who thought that Hulu's subscription offering was a good deal, were those who had or were planning to ditch cable. And here comes Hulu admitting that it's not designed to help those people. Yikes.

Rob Pegoraro has a column up about the latest in the very long line of back and forth attempts of companies making browsers for television sets to get around silly blocks from Hulu. Despite the fact that these systems are really just browsers legitimately connecting to a webpage, Hulu's corporate parents freaked out and ordered them blocked for no good reason. Of course, the workaround is easy: just spoof the type of browser, so that Hulu doesn't know that it's a browser on a TV. However, Hulu keeps trying to block these, which leads Pegoraro to ask a good question at the end:

But when does Hulu get tired of playing this silly game? How do Hulu's own developers feel about working to ensure that their site stays broken for the "wrong" users? Do they not have one of the most degrading coding jobs in America? And to what end--so short-sighted suits can find new ways to annoy their customers?

While it may seem like a random question, it could actually be a big deal. When Hulu first came out, one of the points that people made was that it really was put together by folks who understood the power of the internet. That is, they were "internet people" rather than "Hollywood people," which is what allowed the service to work well for many (definitely better than most expected). But, with the corporate bosses continually trying to limit what the site can do, you'd have to imagine that the developers working at the company must be getting annoyed. What kind of developer wants to focus on limiting what users can do with technology, rather than allowing something great? At some point, Hulu is destined to lose its best developers who just get sick of spending all their time breaking their product, rather than building something cool, useful and innovative.

The TV industry has been totally downplaying the idea that people would ever "cut the cord" when it comes to TV. While it may be true that it's a very small minority of users today, it would seem that those in the TV industry might want to look over to their friends in the telco industry. They used to scoff at the idea of cord cutters as well... and now 25% of all households have dumped their landlines entirely. And, among younger folks, it's getting increasingly difficult to find a landline at all. Things change. What was unthinkable not so long ago can become reality pretty quickly.