Wednesday, March 3, 2010

Viacom Programming To Leave Hulu

Viacom, he owner of Comedy Central, MTV and other networks, has decided not to renew its Comedy Central deal with Hulu. Despite its appeal and high usage on the Hulu platform, Comedy Central programming like The Daily Show, South Park, and others will cease being available as of March 9. I'm sure as other network deals expire they will not be renewed either. "Hulu said it was still talking to Comedy Central about “a number of opportunities.” A Comedy Central spokesman declined to say whether the channel would strike a distribution deal with one of Hulu’s competitors."

If I am to read between the lines, advertising revenue split between Comedy Central and Hulu was not enough to continue. It also has had the reverse effect of providing an alternative to cable, thus reducing cable subscription fees. The solution is obvious: a subscription model on Hulu so that Viacom captures a dual revenue stream. Hulu customers may not like that. The second is to do deals with cable companies that offer authentication to a cable subscription. Thus it would be more likely to keep Comedy Central on Fancast inside a walled garden and accessible only to Comcast customers.

Consider this a turning point for Hulu and one that seriously will impact their model. Content companies like the two stream model of subscription and advertising. Free does not fly in today's marketplace and ultimately the consumer will lose.

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