Now Youtube has joined the Hulu Consumer Set Top Box battle fray.

Earlier this week, Youtube announce www.youtube.com/xl which is a browser based version of Youtube designed for a TV like experience. As a result of this effort, Youtube is trying to push current API licenses include Popcorn Hour to switch to the XL version of the application. What the heck is going on here?

There are many factors driving this from multiple angles

1) Who controls the user experience on the TV? The content portal such as Youtube or Hulu? The Set Top Box maker? (Like Popcorn Hour) The Set top box software maker (think Microsoft, Apple or Popcorn hour) the MSO’s etc. Why does this matter?

2) Monetization – with the API approach, it is difficult to monetize by providing just the meta data and feeds. If you have an ad based model, the API feeds don’t guarantee that the ads will get through. Another aspect is it is difficult to control the branding of the application and the ad platform that surrounds and embedded on the content.

3) Content rights issues – Youtube has from day one had content rights challenges. Much of the interesting content that is consumed on Youtube is uploaded professionally produced content such as the Daily Show clips and other such segments. Now that they are starting to get longer form content such as full length TV shows and Movies, the rights they have on that content probably has restrictions on display on “set top boxes or TVs. Take a look at Hulu Desk Tops Terms of Service for example. So Youtube may be motivated to restrict the content that is displayed on the TV (i.e. XL) version.

4) The consumer experience – Every set top box or TV has a user experience paradigm and branding. Think about TiVo Apple, Popcorn hour, Media Center PC etc. There is a well defined experience and use case that the consumer expects to access when interacting with the device by the remote. Consistency of experience is important. If every content source has a completely different paradigm, this can confuse the consume and make it a less compelling experience

5) Technology Limits – While it is all fine for a web property to dictate that henceforth all TV user interfaces must be web based, it is a bit naïve to assume that a low cost power efficient device can render all the web technologies necessary to implement this. As an example at Popcorn Hour, we have spent considerable time and energy (and therefore money) on developing a very compelling user experience that renders high quality Youtube within the constraints of the TV experience in a low cost power efficient device. Our Popcorn Hour family is less than 15 watts. Much less the powerfully dual core processors 4GB of Ram and 300GB hard disk that web developers assume is driving the web experience.

So what is the answer?

As if often the case with these types of issues, there is no clear answer but I can paint out the options for Youtube, and by extension Hulu.

You tube can insist that they continue to cut off the API approach. My feeling is this will just leave their flank opened to other services. Or worse, consumers once again taking control and getting the content via some other angle. So from my perspective, this is not there best option. If it takes the consumer electronics time like a year or so to implement the XL version of the site, then this window is long enough that others will fill the void.