Hulu: Should YouTube and iTunes be worried?


As Doug wrote this past Monday, NBC and Fox launched Hulu, where you can watch television series, shows and even feature-length films from the two networks. With Apple, Inc.'s (NASDAQ: AAPL) iTunes, Amazon's (NASDAQ: AMZN) Unbox and Google, Inc.'s (NASDAQ: GOOG) YouTube, is this launch even necessary? If so, why now?

Well, the television studios do not want to become irrelevant in the age of online video. Too late. There are certain generations who will watch television shows in front of the standard boob tube (the same demographic that seeks out physical newspapers instead of Google News), while other generations will, in the future, watch most of their video online. The Hulu venture is basically television transferred to the internet -- it will be free and ad-supported, just like traditional over-the-air television (sans cable or satellite). But when two competitors join hands to make it happen, red flags start going up. Is there single management of the content? What agenda is there?

And, should YouTube be worried? YouTube is nowhere close to being a broadcast television replacement, with its small-size and substandard video and mono audio. That doesn't mean the technical capability could not be there soon to leapfrog those current limitations and deliver a complete and entertaining experience that would engage each viewer. Google may already be working on this. Say it with me: YouTube 2.

Until then, he television studios, out of fear from Apple's grip on content distribution (but not creation) and YouTube's grip on viewer eyeballs, are trying something -- anything -- to remain relevant as the rules of the game change. The music industry has already succumbed (although record companies won't admit that) and it is dying a slow death as a result. Rocker Trent Reznor makes a great case about this here, and he's right -- very right. Television studios want to head this scenario off at the pass. It may be a tad too late, but at least the effort is being made.

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