Hulu touts about TV anytime, anywhere. But hooking your TV to the Net? Crazy talk!

Funny pages: Hulu offers web video, but doesn't encourage Net TV. Image: Hulu

I had an epiphany early last year when I visited Hulu for an article David Kirkpatrick and I were writing about the unexpectedly successful young venture.

Watching TV shows on Hulu was such a pleasant experience with Hulu that the company should encourage users to connect their PCs to televisions. Technologically it's not a difficult thing to do, but it's not terribly convenient. A PC needs to be near the TV, the remote-control experience isn't good, and so on. I remember Hulu executives smiling kindly at my suggestion but not offering much in the way of feedback.

With hindsight, I see how naive I was.

Hulu's owners are Fox Televion (a unit of News Corp. (NWS)), NBC Universal (controlled by General Electric (GE)), and, more recently, Disney (DIS), which owns ABC. The last thing these media conglomerates want is for their Webby startup to go around encouraging people to watch Internet videos on their TVs.

Technology is not the problem

Internet ads are small potatoes compared with TV spots. Online advertising may be growing, but it doesn't replace the big bucks from broadcast, cable and satellite TV. Hulu talked a good game about doing what was right for consumers, and it did build nice video viewing software on the Web. But when it comes to encourage folks to  use Hulu on their TVs? No way.

So as we head into 2010 the long-assumed dream of an "Internet bypass" or "over-the-top video" remains just that, a dream.

Consider:

* Boxee, a startup whose software makes it easy to connect TVs and PCs has been playing a cat-and-mouse game with Hulu for the very reasons described above.

* Apple (AAPL) has had next to no success with Apple TV, a niche product that enables TV viewing of videos in an iTunes playlist — and nothing else.

* Sony (SNE) recently introduced an Internet-enabled TV with the promise of customers being able to  purchase a Sony movie. Yet the movie comes with an exorbitant price tag so as to avoid upsetting Wal-Mart, the nation's largest seller of DVDs and therefore an important Sony vendor.

These are all baby steps for something that, technologically at least, seems inevitable. As Richard Greenfield of Pali Capital  told The New York Times: “The time when a majority of consumers have Internet-enabled TVs is a long way off. “But it’s moving the ball in the right direction.”

Why does it have to be so hard? That's easy. Incumbent video providers will hold on to their diminishing profit margins as long as possibly can even while saying they are embracing new technology, like Hulu. Introduced eight Bravia models that are Internet-enabled won't solve the problem.

What will?

Here's an interesting statistic about Boxee, the freeware media browser that makes it easy to find and watch Web video and streaming TV shows on a computer screen.

Of the 370,000 people who have downloaded the free Boxee client since it became available last June,

• 67% are running it on Macs
• 25% are running it on Apple TVs
• 4% are running it on Linux boxes
• 4% are running it on Windows PCs

This is not the way the world usually works. Developers as a rule will walk through the desert in their socks to get to an installed base, which generally means the 8 or 9 out of 10 computers in the world that run Microsoft (MSFT) Windows.

So we asked Avner Ronen, the Israeli-trained software engineer who founded Boxee, how it came to be that 92% of his users are running Apple (AAPL) products?

The reason stems from a decision he made two years ago, when his team first started developing Boxee.

"We were all switching to Macs as our personal computers," he says. "And we felt many of the early adopters were going there as well."

It helped that Apple's hardware was standardized across the product line, which made it a more attractive multimedia development platform than PCs running different versions of Windows and manufactured by a host of different companies. And there was one more little thing:

"The Mac Mini and laptops were coming with remotes at the time, which made them great media center platforms. We just thought it made sense to start with Mac and then move to the PC."

Although the Mac version is in its second alpha and headed for beta, Boxee still hasn't been officially released on the PC. A Windows alpha came out earlier this year, but only by private invitation. A public release isn't expected for another six or seven weeks.

Even so, Boxee has been getting a lot of attention lately, especially after it won a Best of the Best Award at the Consumer Electronics Show in January. It now offers content both from Web sources like Blip.TV, Joost, TED and Revision3 as well as TV shows from mainstream outlets like PBS, CBS, HBO, CNN, Comedy Central, WB, NBC and Fox.

Over the past six weeks Boxee has been engaged in a game of cat and mouse with Hulu, the joint venture of NBC (GE) and Fox (NWSA) that streams TV content from nearly 450 shows, including such hits as 30 Rock, The Daily Show, and The Colbert Report. Hulu has twice tried to pull its content off Boxee — most recently this week — but Ronen's programmers keep finding clever ways to get it back on. See here and here.

In March, Ronan drew more attention to Boxee by engaging in a fierce and widely read debate with HDNet's Mark Cuban over the future of video entertainment. It was set off by a Cuban editorial entitled "Why Do Internet People Think That Content People Are Stupid?"

Last week, a Boxee press conference/meet-up in New York City drew a standing-room-only crowd of more than 700 people. Most of them were Mac users.

Boxee's love for Apple, by the way, isn't exactly reciprocated. Boxee came to the Apple TV as a hack that gives owners a way to get around the set-top box's restrictions and watch content that isn't available on the iTunes Store.