Hulu suffered a major setback as of yesterday with the announcement that two of its most popular offerings would no longer be available to the service. Though Hulu will still carry links to the shows on the site, Viacom has pulled “The Daily Show with Jon Stewart” and the off-shoot show “The Colbert Report” from Hulu, and will offer full episodes and excerpts viewable through their Comedy Central website going forward (still free and advertiser supported).
What was once a truly great idea– putting a plethora of high-quality, studio-produced content on a single website with advertiser support– is slowly becoming a place from which content providers want to flee for lack of a sustainable business model. Free just doesn’t work (even advertiser supported free viewing), according to Viacom, and they felt they could not reach a deal with Hulu on ad revenue splits. It now wants those properties back, in-house, to be viewed on its own sites rather than what was once purported to be the YouTube killer (for professionally made studio content, at least). The deal that Viacom had with Hulu for the shows since Summer of 2008 was not, in Viacom’s view, working out for them due to the split in ad revenue with Hulu and the inability of Hulu to drive other content on Viacom’s websites to a potential audience. Viewers are already complaining that the Comedy Central site and playback viewer lack the sophistication and elegance of Hulu’s service, but Viacom shows no signs of backing down on this, and it appears Hulu will have to live without those shows though they will still offer links to Comedy Central’s site and both shows will be available for a few more days.
This is a big loss for Hulu, founded in March, 2007, and a big loss for the consumer… for as we all know, it’s really nice and convenient having high-quality content in once place without having to scramble from website to website looking for a favorite show or episode. While Viacom is still offering the content on Comedy Central’s site for free, how long before Sumner Redstone goes the way of Rupert Murdoch in creating a paywall for viewing these shows. Don’t think it could happen? Think again.. Subscription services are where the money is, and that fact probably doesn’t escape Redstone, Phillippe Dauman (President/CEO), and Viacom/Comedy Central executive teams. Hulu executives are none to happy about this, but what can they do… they’re not in the driver’s seat regarding these deals, unless they’d like to provide their own content (similar to the way YouTube finds its success).
Whether this is the beginning of the end for Hulu remains to be seen… it’s the last company I’d like to write a requiem for, but the dirge has been sounded and it seems as it will be hard for Hulu to make up for this loss. Hulu’s top management says they’re still in negotiations to see what can be done, but this one looks written in Redstone folks.