This is Why Hulu Blocked Boxee

As part of its investigation into the Comcast-NBC Universal merger, the FCC asked NBC why Hulu blocked access to its site via Boxee, the start-up aiming to bring high quality web content to television sets.

On June 11 NBC filed its responses to the FCC questions, and while much of the document is redacted, it does give a partial explanation as to why Hulu blocked Boxee from featuring its content:

In case you can’t make it out, NBC wrote:

Instead Boxee decided to circumvent Hulu’s terms of sue restrictions by taking Hulu content and streaming it through Boxee’s interface (which disables significant, commercially important features of Hulu’s site to Boxee’s commercial benefit) without an agreement with Hulu for distribution. As a result Hulu halted Boxee’s unauthorized access to that content.

While we may never know what came before that fateful “Instead” we can infer quite a bit from the NBC statement.

What exactly are the “significant, commercially important features” of Hulu’s site that Boxee disabled?

Boxee argued that because it kept all of the pre-roll and in-program advertising, that it would not be harming Hulu’s bottom line. Hulu clearly disagreed, and there are two likely culprits: page takeovers and interactive ads.

Many Hulu videos feature advertising that takes over the whole page. Advertisers not only get video pre-roll and in-show advertising, but also a custom skin that surrounds the video player. Even if a user “lowers the lights” turning the area surrounding the player a dark gray, or makes the video player full-screen, the page takeovers are still in effect, with the player reverting to the users previous selection after the ad has rolled.

The other problem for NBC likely came in the form of interactive ads. Some of Hulu’s advertising has interactive functionality, allowing users to click for more information, or play a mini-game, etc. In fact, right now all Hulu videos feature an “is this ad relevant to you” button, which is designed to develop betetr ad targeting to users. It is unclear whether this interactive functionality would be available through Boxee, but in all probability the answer would be “no.”

Hulu is selling advertisers on packages, some of which include page takeovers and interactive ads, if users cannot see those pages or interact with those ads, than the advertisers are not getting their moneys worth.

Of course, it is also possible that Hulu just wanted to keep its content off of the television set, but it is unlikely that excuse would have cut it with the FCC.

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