Is Hulu Boxed In?

Every sitcom. Every drama, documentary, reality show.

All of it — everything — Right Here Now.

This is the radical potential of the Internet. And this is the implicit promise of Hulu, the innovative Web site that drew the original borders of online television — the TV of tomorrow.

Hulu’s stated mission: “Help people find and enjoy the world’s premium video content when, where and how they want it.”

In the space of just four years, Hulu has done just that — to a point. Only now, with its industry in flux and the company up for sale, the divide between what is and what might be seems as daunting as ever.

This is the future of TV? Really? Today you can watch some shows on Hulu in their entirety. But others you can’t watch at all. Most fall somewhere in between — bound by contractual handcuffs that hamper prospective viewers. Making it even more baffling, some episodes are free while others require an $8-a-month subscription.

“It makes catching up on a show or starting a new show very difficult,” complains Marta Garczarczyk, a fund-raiser for a science museum in Minnesota who tried to watch the ABC’s “Cougar Town” and Fox’s “Glee” through the site last season.

Hulu executives largely have their hands tied. Viewers want more shows on more screens. But Hulu’s partners — the big networks — want steady profits. And, for the moment, the networks seem to have the upper hand.

Hulu is a joint venture of NBC Universal, part of Comcast; Fox Entertainment, part of the News Corporation; and ABC, part of Disney. An investment firm, Providence Equity Partners, owns about 10 percent.

Partnerships of rivals rarely last. And so Hulu finds itself on the block this summer. Representatives of Google, Yahoo, Amazon, Apple and others have kicked the tires, although no clear buyer has yet emerged and Hulu has steadfastly declined to comment.

But no matter who ends up spending billions to buy Hulu, the trick will be satisfying viewers. As Jason Kilar, Hulu’s visionary chief executive, put it in a blog post last February, “History has shown that incumbents tend to fight trends that challenge established ways and, in the process, lose focus on what matters most: customers.”

But — through no fault of Mr. Kilar — further limitations on the site’s bounty of free video may be on the horizon. For all the innovation that Hulu represents, the site also lays bare the gulf between what online viewers want and what TV companies are willing to give them.

“Customers always win,” Mr. Kilar has been known to tell his staff.

Maybe. But not always without a fight.

EVEN critics of Hulu concede that this company has accomplished something astonishing. It has helped to free television from the tyranny of the TV set.

For decades, people watched television one way: through a boxy contraption, tied to a schedule set by broadcasters. It was all supported by advertisers and beamed free over the airwaves.

As cable and satellite choices proliferated in the 1980s and 1990s, the business model changed: shows and channels were financed both by advertisers and subscribers. But the TV set and its TV Guide-era schedules still reigned. Not until 2006, when ABC became the first network to stream shows like “Lost” and “Grey’s Anatomy” on the Internet, did television programming truly roam free. A year after that, Hulu began taking mainstream the idea of streaming on TV, computers and cellphones.

The first hint of television’s unbundling actually came back in the 1980s, when viewers snapped up videocassette recorders. For the first time, they could record shows and watch them when they wanted. Once that happened, there was no going back. VCRs paved the way for TiVo and DVD box sets.

Each generation of technology met resistance from some in the television industry, a fact that Mr. Kilar knew at first hand before joining Hulu. While working at Amazon.com in the late 1990s, he wrote the business plan for the company’s VHS and DVD businesses. He witnessed skirmishes with TV studio chiefs who worried that direct sales of shows would damage the Blockbuster rental model. Over time, the studios came to embrace the sales model.

Article source: http://www.nytimes.com/2011/07/24/business/media/hulu-billed-as-tomorrows-tv-looks-boxed-in-today.html?partner=rss&emc=rss