Hulu Speaks On PS3 Blocking: It's the Content ProvidersS

A few weeks ago, Hulu silently blocked access through the PS3's web browser. Customers who bothered to ask the company what was going on just got a response, which fingers an entirely predictable culprit: Reluctant content providers!

The semi-apology came in the form of an email, in which a Hulu rep told users that the move was a compromise:

Everything we do is with an eye toward achieving our long-term goal of maximizing the content you can access as conveniently as possible in a way that 'works' for the content owner. In the short-term that may require us to make some tough decisions...

Hulu won't go so far as to directly blame specific companies, but it sounds like one—or a few—of their many partners signaled that PS3 streaming was a threat to their relationship, somehow. But yeah, how?

Distribution availability across platforms — theaters vs. TV vs. recorded media like DVDs vs. online streaming vs. mobile phones — was always implicitly or explicitly controlled in that world... the windowing strategy is still dominant in the business. Billions of dollars flow in across these different windows, and entire companies are organized around them.

This is actually pretty clear cut. Content providers are uncomfortable with the concept of video streaming on the PS3, because the console is typically connected to a television. This content delivery gray area is enough to somehow screw with, or simply muddy, their licensing arrangements or somesuch, so they're exercising caution.

As frustrating as that is, it's also a bit reassuring; far from a sign of a concert rollback of digital streaming rights, this is just a minor hiccup during a long, still-advancing transition. As Señor Hulu said, upstarts like Hulu need to be sensitive to media companies' old-fashioned sensibilities in order to change them. Full letter is reprinted below. —Thanks, Kip!

Thanks for writing. In order to answer your question, some context might be
helpful.

For decades, the TV/movie industry has built its business model on a windowing
strategy. Content rights are granted for limited time periods across specific
distribution channels. For example, a movie starts in theaters, then moves to
pay-per-view and DVD, then to pay-cable channels, later to broadcast, and so on
down the line. Similarly, TV shows are available on TV first, then in repeats,
then to DVD and possibly syndication, etc.

Distribution availability across platforms — theaters vs. TV vs. recorded media
like DVDs vs. online streaming vs. mobile phones — was always implicitly or
explicitly controlled in that world. But a few factors have made the barriers
between those platforms more permeable: the rise of the web, increased broadband
availability, the ease of digitizing video, and the increase in the computing
power of devices like gaming consoles, set-top boxes, and mobile phones.

However, in the near-term, the windowing strategy is still dominant in the
business. Billions of dollars flow in across these different windows, and entire
companies are organized around them. Nothing productive comes from flouting that
reality (except to law firms who work on the occasional lawsuit).

We do, however, expect these windows to converge over time. There's no
way around
that, and we're working hard with all of our partners to guide and
participate in
this important transition in the business. Everything we do is with an
eye toward
achieving our long-term goal of maximizing the content you can access as
conveniently as possible in a way that "works" for the content owner. In the
short-term that may require us to make some tough decisions, but we only do so
when we believe it improves our long-term prospects to build a more enduring,
legal solution to that same problem.

We hear your frustration, and solving it remains our full-time job.