The stories are flowing about Viacom’s decision to pull Colbert & Stewart from Hulu, and as you’d expect the response has been pretty polarizing. Comments and responses to posts about the decision reflect the type of consumer reaction you’d imagine – anger, frustration, dismay, etc. – while business press has been more forgiving and focused on the challenges likely to be present to negotiators. I can understand people’s feelings – when you’re used to doing something, no one likes change.
As a consumer I’m a big lover of Hulu. But as a former senior exec at MTV Networks, I was never happy about Colbert & Stewart on Hulu. Daily Show and Colbert Report immediately became the most popular content on Hulu, which helped build and strengthen Hulu’s brand far more than Daily Show or Colbert’s. Some have talked about Colbert and Stewart’s “halo effect” on Hulu overall, but while having their programming on Hulu helped grow Hulu’s brand, it damaged the respective shows’ ability to build a stronger community around their programming directly on their own sites, nameely ColbertNation.com and TheDailyShow.com. Furthermore, a conflict was created between the two companies’ ad sales groups as both attempted to best monetize the content. Not to say that I think more networks should pull their content from Hulu. I believe that Colbert & Stewart are a particular exception because of the volume of content and the popularity compared with other content on Hulu.
On the other hand, I also was not happy with the user experience on either site – as is obviously the case for many other people, too – finding them too difficult and confusing for the average visitor, and the full-episode player, which usually works fairly well, doesn’t have the same stability, polish and cleanliness as Hulu’s.
So in the end, was it the right move to pull the content? Many people, like user ‘Joe. F’ on PaidContent, are saying things such as, “Why do people keep saying that they should change to a subscription model? Doesn’t everyone realize it will kill the website? Hulu has attracted many illegal downloaders of their weekly shows, me being one of them. If they go to a pay model I will simply go back to pirating the shows, as would many people.” On the other hand, user ‘NJ’ on NY Times wrote, “Eh. This is hardly a shake-up. If Viacom were to take Colbert and Daily Show offline entirely, that would be something. But avid watchers of both shows can pretty easily access them on comedycentral.com.”
Ultimately, it’s all about a balance between ad dollars and viewers. It may seem counter-intuitive that removing content from Hulu could increase revenue, but let us assume for a minute (and this is just hypothetical – I’m not saying this is actually true) that Viacom is able to sell ads at a rate 30% higher than Hulu is for the same content. And also assume that some percentage of people who watch the shows on Hulu will migrate to watching them on Viacom sites. Obviously not 100% of people will migrate, but then again, not 100% need to migrate for it to be a net win. Furthermore, not having the content on Hulu actually protects Viacom’s ability to sell that space for the 30% premium.
So in the we’ll see if Hulu or Viacom or both are hurt by this. In the end, people who are big fans of the show will find an alternate way to view it, and will happily just visit their respective sites. Especially since the shows will still appear in search results on Hulu, so it’s hard to say that the move will damage Comedy Central very much.
Disclaimer: I wasn’t personally involved in the original negotiations with Hulu, and I have no special knowledge about the current negotiations between the two companies. This post represents only my own thoughts on the matter.