CONVOLUTED and often outdated contracts for the rights to shows and channels are the single greatest impediment to the growth of TV on the Web, on Hulu and elsewhere.
The contracts are designed to protect the core businesses, like cable subscriptions and syndication revenue. But they have suppressed the availability of shows on Hulu and have also slowed the implementation of “TV Everywhere,” the industrywide plan for anytime, anywhere viewing.
Because there are so many unknowns online, contract negotiations take longer than they used to. Sometimes content owners and distributors even haggle over what to haggle about.
“As an industry, both sides don’t know what we don’t know,” said Neil Smit, the head of the cable division of Comcast, which has a streaming TV site, Xfinity, for cable subscribers.
Mr. Smit was mostly upbeat about the undertaking, saying, “Everyone’s pulling in the right direction, but there is a ton of work to do in rights and audience measurement to bring it to life on every platform and every device.”
By audience measurement, he means the Nielsen Company ratings that are used to set pricing levels for ads. Nielsen now includes online streams in its ratings if the same ads are shown both on television and online. Only a handful of channels are taking that approach for now.
In the meantime, there do not seem to be standard answers about how much should be free online, and how much should not be — or for how long or on what Web sites. Hulu has to operate amid this uncertainty.
Consider ABC’s prime-time lineup. On Hulu, at no cost, anyone can watch the last five episodes of shows like “Desperate Housewives” and “Modern Family.” And paying subscribers can watch more. But from there, it can seem perplexing, often because of decisions made not by the networks themselves, but by the studios that make shows.
No episodes of the ABC sitcom “The Middle” are available online, even for paying subscribers. The show’s studio, Warner Brothers., declined to comment, but the studio is known for limiting the streaming of sitcoms and procedural dramas because those shows are especially valuable in the syndication marketplace. In the meantime, what pops up prominently when a fan of the show searches for it on Google? Web sites that link to illicit copies of the show.
BOARD members of Hulu anticipated from the outset that it would eventually be sold.
Would-be buyers like Google have been assured that Hulu would continue to have exclusive access to network shows for some period of years. But the spigot on free streaming appears to be tightening. The new deals that Hulu signed with ABC and Fox this summer are said to allow for more ads and longer periods between when episodes debut on TV and when they debut online. Hulu declined to comment, but it is possible that Fox might start waiting a days to post a new free episode of, say, ”Family Guy,” or that ABC might delay an online episode of “Grey’s Anatomy.”
What seems certain is that online TV will look more like a walled garden in the future, with cable and satellite customers receiving online access as an add-on to traditional TV subscriptions. This is the approach led by Time Warner, which coined the term “TV Everywhere” two and a half years ago.
Only a handful of channels have completed the work to set up the walled garden, known as an authentication model. Last week, the CNN unit of Time Warner became the first cable news channel to do so; subscribers to services like Dish Network and Verizon FiOS can enter a username and password and start watching the channel on their computers or iPads at no additional cost.
Hulu hasn’t ruled out an authenticated model for part of its site, and analysts expect it will happen eventually.
Perhaps the best glimpse into the authenticated future is the one provided by HBO, another Time Warner unit, which recently rolled out its version of Hulu, called HBO GO, for its shows and films.
HBO GO lets subscribers watch virtually every season of every HBO show — both new, like “Game of Thrones,” and old, like “The Sopranos.”
The Internet is not only revolutionizing the business of television, but also how we think about TV. On top of the shows themselves we now have what Eric Kessler, the HBO co-president, calls the “enhanced viewing experience.” People who watch, say, “Game of Thrones” on their iPads can click through character trees, story maps,commentary — on and on.
Tune in next week, same time? Forget it. The days of that old TV staple, the cliffhanger, may be numbered. If networks can cut through all the contracts, technology that lets us watch what we want, where we want, when we want could create a whole new viewing experience — which is exactly what TV executives say they want.
“The easier it is to access the content,” Mr. Kessler says, “the more they watch.”