I attended a Boxee meetup/beta announcement event here in New York last night.

Boxee, for those of you unfamiliar with it, is the small New York-based startup behind a “media browser” application that has received a lot of attention lately, despite being still in alpha testing.  Optimized for a 10 ft. lean-back internet video experience, the app can be installed on an Apple TV - or you can connect that spare Mac Mini you have laying around the house to your television and install it there.

Either way, this is precisely the kind of solution that’s needed for internet video to evolve beyond the solitary dorm-room/workplace short-form diversion it currently is to a true home entertainment medium.

The profoundly disruptive implications of such a scenario were not lost on Hulu owners News Corp. (Fox/Paramount) and NBCU, who decided to deny access from the Boxee client a few weeks ago, just as the app’s ability to provide a compelling Hulu experience on the television was becoming more widely known.  This started of a series of back-and-forth technical maneuvers between the two companies: Hulu first started refusing any connections originating from Boxee rather than from standard web browsers.   In response, Boxee quickly implemented a workaround solution, instead accessing Hulu streams via the site’s public RSS feed, only to have Hulu implement a block on all Boxee RSS subscription requests a day or two later.   And on it goes - Boxee tweaks their RSS reader implementation to get through, Hulu tweaks their RSS feed implementation to deny it…  It’s gotten to the point that recent Boxee releases include a status message in the upper right corner, alerting users to whether the Hulu service happens to be available at that particular moment.

It was interesting last night, then, as Boxee CEO Avner Ronen slipped in the following item while listing the feature set of Boxee’s upcoming beta release: Boxee will now include, as Ronen put it, a fully Mozilla (i.e. FireFox)-compliant browser.  Although not explicitly stated, the implication is that Hulu will no longer be able to identify Boxee and block it. In other words, when you select Hulu content on the next Boxee beta, the software will first connect to the Hulu web page rather than the stream itself, and will appear to Hulu as simply yet another instance of Firefox on yet another computer.   Boxee will then automatically display the stream in full screen mode.

In general, there was no shortage of Hulu-related catcalls from the assembled faithful throughout last night’s event - so I found it interesting that these two or three sentences failed to generate much immediate crowd reaction, especially since Mozilla compliance is both a major new feature and the strategy behind Boxee’s next round of maneuvers to maintain access to Hulu.

One has to give Boxee credit: the tiny (12 person) company is going up against News Corp. and (indirectly) NBCU owner General Electric - yet they are not going away.  In fact, Boxee appears more determined than ever to keep forcing Hulu’s hand, leaving America’s preeminent premium web video streaming service with no choice other than to continue having to do (as Hulu itself puts it) “a hard thing” - to  block access to users depending on what software they’re using - or to put it more accurately, depending on where (the desk or the couch) that software is being used.

Although it met with a similarly underwhelming audience response at the time, the other announcement worth noting consisted of one literally one sentence: “Look for Boxee to announce major content partnerships in 2009.“  Boxee has already partnered with some major content owners (CBS, CNN, and Netflix, to name a few), so it will be interesting to see who’s next.   Probably not Disney, due to their close relationship with Hulu competitor Apple/iTunes - but maybe Viacom (Comedy Central/MTV, etc)?

One thing is clear: Boxee will continue to be a fascinating company to watch in 2009.

Time Warner CEO Jeff Bewkes in a recent BusinessWeek article:
“We believe in TV everywhere, that consumers should have access on broadband to the same channels they see on television. But the online model has to support, not undermine, the distribution fee and advertising arrangements between programmers and distributors. Those with a subscription to a video service would also get access to shows online.”

“We believe in TV everywhere…” – it happens that TV Everywhere is also the name of a new cross-network, cross-industry initiative Bewkes announced several days earlier in an Ad Age interview. In short, TV Everywhere is designed to enforce the vision of the future Bewkes describes in the BusnessWeek article: to make internet access to cable network content possible only if you can prove you also happen to have a multi-channel  (i.e. cable, satellite or fiber) television account.

To the technical purists among us, this might seem a bit like limiting the availability of the Model T to those who can prove they already own a horse, but it’s worth remembering that an awful lot of money flows from the consumer to the cable carrier and on to the cable network: in fact, it amounts to 50% of the networks’ income.  In other words, the cable networks need the carriers - and they won’t make a truly comprehensive move onto the internet without bringing them along for the ride.

Conversely, the availability of cable network content is the primary value proposition of the cable/satellite industry, especially now that terrestrial networks are broadcasting in HD over the air.  In other words, since good reception of a local affiliate’s broadcast is less dependent on that cable connection, the cable carriers need the networks, now more than ever - and so are doing the heavy lifting of putting the “TV Everywhere” initiative together.

It’s a very lucrative (and interestingly circular) business relationship - and one that both parties have an interest in protecting from the wild-wild-west of the internet.

So, which major players are  on board?  On the network side, we have Viacom and (Hulu co-owner) NBCU, while (Hulu’s other co-owner) News Corp. and (Apple-friendly) Disney are said to be in talks.  On the carrier side, DirecTV and Dish Network have yet to officially announce, but Bewkes clearly intends to include the satellite carriers.  Comcast, meanwhile, plans to stick with their “Fancast” service for now, but has made some friendly remarks about the two services possibly becoming compatible.  Of course, the prospect of an ISP such as Comcast (the largest MSO in the country) selling both their own proprietary internet video walled garden while simultaneously selling internet access raises issues of net neutrality - so in Time Warner’s case, it’s interesting that the conglomeorate that includes cable networks Turner Broadcasting and HBO) will be splitting off the Time Warner Cable subsidiary on March 12th – just one week after announcing the TV Everywhere initiative.

So what exactly is “TV Everywhere” going to look like?  Evidently an identity-based access system running over the top  at “no extra cost”  to the user.  I imagine the pledge to make the service free is based on the fact that recent election-related spikes in internet streams of The Daily Show and SNL clips did not appear to cannibalize broadcast ratings and that all-important symbiotic relationship between the carrier and the cable network.   There’s something most coverage of TV Everywhere misses, though:

The most interesting thing about TV Everywhere is that it’s still only about the PC/web browser/mobile device - conspicuously absent is any mention of network-enabled televisions and set-top boxes.

The next generation of internet-enabled television hardware is the elephant in the room - and the content owners know it: how else to explain NBCU and Fox suddenly forcing Hulu to back out of Boxee once it became clear the service was ultimately aimed not at the (lean-forward) PC but at the (lean-back) TV?  (I would’ve thought the prominent placement of the letters ‘b-o-x’ in the company’s name would’ve been a red flag, but that’s just me.)

The whole TV Everywhere model is intended to preserve the current carrier/cable network revenue stream.  To that extent, it’s intended to prevent (or at least slow down the progress of) access to internet video from the television. That’s going to be difficult, though, because while users really don’t care whether their programs arrive at the TV via a cable stream or via IP packets, what they ultimately will demand is the same freedom from program schedule tyranny they enjoy over on a website - in other words, it’s not about “TV Everywhere” - it’s about “TV Anytime.”