Not to sound like a self-help guru (although my rates are quite reasonable), a simple truth seems to rear its head more and more these days: The TV content industry has got to decide what it wants. Yes, everyone wants to make money. Everyone wants to produce successful shows that fuel water-cooler conversations for years and become part of the pop-culture lexicon. But beyond those obvious measures of business success is the more philosophical, existential and yes… even spiritual debate over what—at its very core—the TV content industry wants to be. As the debate over online video, TV Everywhere and free-vs-paid content rages among both content owners and distributors, the reality is that none of these diverse interests have really sat down and decided. And it’s not just a matter of disagreement among different companies. Much of the debate is internal within each concern and increasingly contradictory depending on which way the wind is blowing on a given day. That’s too bad. Because (and again, my self-help rates are low), the first step toward success in any endeavor is truly knowing—without any reservation or doubt—exactly what you want.
Here’s what I mean: This week, Hillcrest Labs—whose UFO-shaped remote control and set-top navigation software have always been cool even if it has never cracked the insular cable club—got body slammed by Hulu, which blocked access through its new Kylo Web browser. The Kylo browsers main feature is seamless Web-to-TV navigation. Hulu’s action is reminiscent of its earlier decision to block access to the Boxee set-top box, and it once again makes clear that Hulu and its big-media owners just don’t know what they want. On one hand, Hulu offers a great free service to the masses and helps extend the brands of myriad TV shows—not to mention attract and retain fans who might otherwise spend more time browsing other Web sites than watching premium video content. That’s smart. At some point, TV Everywhere will probably make Hulu either superfluous or a subscription-based service. But for now, the site is an enigma. Why can consumers watch Hulu content through a Web browser like Internet Explorer, Firefox or Safari but not through Kylo? And why the cold shoulder to third-party set-tops or other devices that connect to the TV? The obvious answer is that Hulu’s owners (under pressure from cable and satellite distributors that pay big license fees to affiliated cable nets) don’t want to cannibalize their dual revenue streams. That makes a lot of sense. But it’s almost as if content companies want their cake (license fees) while eating it too by allowing access to free content only through certain browsers or on some screens. The result is utter confusion and even resentment among some consumers, many of whom sympathize with companies like Hillcrest Labs and Boxee.
I don’t have the answer (thus, my cheap rates), but things are moving fast, and the content industry is running out of time to set a clear direction based on a plausible business model for online video. It has been several years now since YouTube hit the scene. We’re heading toward 100Mbps and beyond. The next generation of consumers don’t know the difference between a TV screen and computer monitor (or even perhaps a smartphone screen). The time has come for the industry to decide what it wants. Dithering for much longer risks a consumer backlash that may lead to more piracy or, even worse, a wholesale rejection of some of the very content consumers love to watch today. Yes, this is tough. But the industry has had plenty of time to debate these issues. It’s time to set strategy and stick to it.
(Michael Grebb is executive editor of CableFAX Daily)
(EDITOR’S NOTE: For a demo of Hillcrest Labs’ set-top navigation scheme, check out my 2006 video interview with pres/CEO Dan Simpkin)