Hulu Loses Viacom, 'Stewart' and 'Colbert'

Fast-Growing Video Site Fails to Reach Extension With Parent of Popular Comedy Central Shows

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NEW YORK (AdAge.com) -- Hulu is losing two of its most popular series -- Comedy Central's "The Daily Show" and "The Colbert Report" -- after failing to reach an extension of a deal with Viacom.

Unlike ABC, NBC and Fox, Viacom is not an equity investor in Hulu, but since 2008 it has been the most prominent provider of cable programming to the video service, which is dominated by broadcast TV programming.

Viacom's rationale for putting those two shows on Hulu, as opposed to, say, "Jersey Shore" from MTV, is that they're topical, like news programming, and don't have the kind of long-term value as a dramatic series.

Hulu has been growing fast, but even its partners are taking a more cautious approach to how many episodes in a given series they put on the service. Shows on Hulu typically run with one-quarter of the ads broadcast TV has, but those ads include innovative formats such as "Ad Selector," which allows users to choose the ad they watch before an episode.

As a service, Hulu is built for broadcast TV in that it is free online and supported by advertising. Hulu has said it would implement a pay wall to accommodate other business models such as cable, with its dual revenue stream of advertising and subscriptions, or even recent movie releases.

Deal over
The deal with Comedy Central was always a short-term one, and Comedy Central execs monitored it closely to determine what value the company was getting, weighing that against the impact on ratings and the network's own websites.

In a blog post, Hulu's senior VP of content and distribution, John Forssell, wrote, "We've had very strong results for both Hulu and for Comedy Central, in terms of the views and the revenue we've generated ... we've driven steadily increasing revenue per view as advertisers voted with their budgets to take advantage of innovative ad formats and very strong advertising effectiveness."

The shows will come down from the service March 9, but they will remain in Hulu's directory, which lists shows not on the service, such as CBS content, and Hulu helpfully directed fans to Comedy Central's sites, TheDailyShow.com and ColbertNation.com.

But the removal of "The Daily Show" and "The Colbert Report" is a blow; both resonated with Hulu's viewers. The "Daily Show" was Hulu's seventh most-watched series last week, and "Colbert" was No. 10.

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