In other words, the product makes the same mistake made by every network that launches a streaming video player: ignoring file-sharing services.
Although YouTube is repeatedly cited as Hulu's most significant competitor, the low-resolution, user-generated content site (in its current form at least) is a different animal from Hulu's polished provider of professionally produced, full-length episodes.
No, Hulu, along with every other network Web site, competes with peer-to-peer services. NBC has the most popular Web site among the major networks and says its streaming service clocked about 17 million unique users in October. According to a Digital Life America study, 32 million users downloaded television shows from peer-to-peer networks during its most recent survey during the month of May.
The reason viewers steal television on torrents is because pirates have an online product that's arguably better than Hulu or anything else the industry has to offer.
Not just a cheaper product (well, free), which is the reason most people in the industry widely assume viewers steal content, but a better service: more portable, a greater variety of use and the best selection available.
Here's what legions of torrent fans already know: If you want to watch TV online, you can go to a Fox.com or CBS.com to view ad-supported streams of the network's most popular shows from the current season (assuming the show is available online in the first place -- most are not, particularly cable programs). A fair-sized selection of current and popular shows also is available for download from services like iTunes or Amazon Unbox for a small fee.
Or you can go to a single torrent search engine and download-to-own almost any episode from almost any season of most popular series ... for free.
As with the networks' streaming players, you can watch pirated shows online. But, like iTunes downloads, you can watch pirated shows offline or on portable video players as well. And unlike legitimate services, pirate sites have many, many shows that are unavailable anywhere else online (hey look, complete seasons of "Tales of the Gold Monkey" and "The Larry Sanders Show").
An example: You can find online the most recent season of "Hell's Kitchen" on Fox's media player or iTunes. Or you can unlawfully download-to-own the "Kitchen" season -- plus the otherwise unavailable first and second seasons. You can also download all four seasons of the U.K. version of "Kitchen Nightmares" and "Boiling Point."
Another example: On CBS.com, you can watch the most recent four episodes of "CSI," or download the same episodes plus the most recent two seasons on iTunes. But on pirate sites, you can download all seven "CSI" seasons.
In other words, you can "own" the Ramsay or "CSI" libraries commercial-free and watch them -- as network executives often say on stage at industry conferences -- "anytime, anywhere."
That's how far behind the digital curve the television industry is right now. Networks and studios sweat every digital release, when most of their popular content is already available -- they're just not making money off it. They're hoarding sand in a desert.
When Fox said it was pulling its "Family Guy" parody of "Star Wars" offline, one reaction from readers (as posted on this board and others) contained variations of, "I guess this is Fox's way of telling us, 'Please download this episode via BitTorrent.'" It's a pouty and felonious response that reflects an extraordinary degree of viewer entitlement: Give us what we want or we'll steal it. But, right or wrong, it also reflects the way an increasing number of young online viewers see the marketplace.
The biggest advantage of the network players (aside from their legality, of course) remains ease of use. You go to the site, point and click, streams start instantly. With torrents, users complain of having to sometimes wait hours for a download, while the availability of content is constantly shifting.
Hulu moves the network model forward by combining NBC and News Corp.'s efforts into a single site, and it likely will kickstart some of NBC Universal's cable networks' offering more online content. Right now, one of the biggest problems with streaming is that every network is so protective of its content that users have to surf to a half-dozen sites to watch TV shows on a half-dozen different media players.
Until the industry finds a way to shut down pirate sites, or offers a similarly fully stocked, one-stop-shopping product, they're asking consumers to patronize a bunch of local boutique stores and avoid the pirate's Wal-Mart. And that's walking the plank.