The story below was posted on DigitalMediaBuzz.com in Feb. 2010. Story is posted here for archiving purposes only since original was lost when the site went down.
It’s no secret that online streaming content is quickly becoming the first choice for many viewers and the battle to expand that beyond the computer screen continues to build.
Microsoft’s Xbox 360 and Sony’s PlayStation 3 stand at the forefront to provide consumers with a set-top box that offers a complete multimedia box as a gaming console, DVD or BluRay player, online content provider and social media aggregator.
Both consoles attempt to stay on top of the game, and one step ahead of the other, in this venture. But as they do, who stands to benefit the most? And at what cost to you?
A prime example of the possibilities was brought forth by Xbox last month when it was reported that the system may soon reach a deal to stream ESPN-televised sporting events, for a per-subscriber fee.
CNET gaming writer Jeff Bakalar says that setup should be a no-brainer for TV networks.
“Theoretically, a TV network could reach millions of people with an Xbox Live ‘channel’. Microsoft has sold 39 million consoles worldwide, with half of those systems hooked into Xbox Live,” he said. “With numbers like that, it’s no wonder cable companies are looking to game consoles as another outlet.”
The content provides added value to the hardware for consoles like the Xbox 360, PS3 and Nintendo Wii, which benefits each company. For Xbox, it also allows the company to charge a premium for the extra content such as its current setup with Netflix streaming movies.
On the other hand, the content creators are able to reach another mass audience without much effort, thus displaying its ads to many more eyes.
Currently, however, the top streaming site, Hulu, limits its video sharing.
Previously available through applications like Boxee (a media-aggregator application for Windows, Mac or Linux) or the PS3’s browser, that is no longer the case. But that fact is leaving a number of people perplexed, including the U.S. Government, which asked NBC Universal CEO Jeff Zucker about the decision during a recent congressional hearing. Hulu is a joint venture between NBC, Fox, ABC and others.
Zucker’s response to the questioning didn’t clarify a thing.
“This was a decision made by the Hulu management to, uh, what Boxee was doing was illegally taking the content that was on Hulu without any business deal. And, you know, all, all the, we have several distributors, actually many distributors of the Hulu content that we have legal distribution deals with so we don’t preclude distribution deals. What we preclude are those who illegally take that content,” he said.
Boxee issued a response almost instantly, stating that it uses a browser to access the content, just as anyone with a computer or PS3 was already doing and wasn’t stealing a thing. It even offered to speak with Zucker and noted that Hulu should be taking advantage of Boxee’s userbase.
“There are now close to a million people using Boxee,” the company said in a statement. “When they watch shows from Hulu they are watching the ads and generate real revenues to NBC. We hope we will be able to work with NBC and offer more content and value to Boxee users as we believe a good number of our users will also be willing to pay one-time or subscription fees to access NBC’s content.”
Boxee, in addition to its computer software, has plans to release its own set-topbox later this year, which will provide direct competition to the gaming consoles – minus the gaming factor.
The high number of consoles already sold (a reported 60 percent of American homes have at least one console), though, gives the PS3 and Xbox 360 a nice headstart. But, as Hulu is showing, providing that content can be tricky.
“We want to offer the best entertainment on Xbox Live in as many countries as we can,” Xbox corporate VP John Schappert toldG4 at E3. “But it takes a while to get these deals done, it takes a while to form these relationships, form these partnerships and find a great experience for [all] of our partners.”
In addition to streaming other videos, both Microsoft and Sony have offered their own direct-to-console shows – The Guild, which airs exclusively on Xblox LIVE and The Tester, a free reality TV show that willdebut on PlayStation 3 and PlayStation Portable this month.
The success of these two ventures for the gaming giants opens another realm of content distribution. With that in mind, they both are very much poised to serve as a be-all, end-all box-top system.
That success, however, may lie with whomever secures the better parterships first and that answer could come soon enough.