Hulu this week showed that it's completely at the mercy of its content partners by pulling content from two of its distributors: CBS Corp.'s TV.com, and startup Boxee. The Web video provider, which is a joint venture from News Corp. and NBC Universal, issued a statement saying that it was exercising its "contractual rights" by pulling content from TV.com. That distribution deal had been in place before rival CBS bought CNet, TV.com's parent, last year.
With respect to Boxee, Hulu CEO Jason Kilar issued a special blog post in which he said the decision was out of Hulu's hands. "Our content providers requested that we turn off access to our content via the Boxee product, and we are respecting their wishes," Kilar wrote. "The maddening part of writing this blog entry is that we realize that there is no immediate win here for users."
Boxee is a software firm that formats Internet video for viewing in a large screen, such as a TV connected to a PC. Hulu's content partners obviously saw the product as cannibalizing on their TV revenue, thus forcing the change (Hulu makes its content partners considerably less revenue than their TV distribution deals). Boxee response, also in a blog post, pointed out that it generated 100,000 streams for Hulu last week; the company said it would continue negotiations with Hulu in hopes of restoring the relationship.