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Viacom Accelerates Hulu's Inevitable Downfall

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Another misguided media company equates online content with losses.

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Almost every week, a news story breaks that gives more credence to the fact that no one behind Hulu -- not NBC (GE), not Fox (NWS), not ABC (DIS), not any of its providers -- wants it to succeed. To design a gorgeous template of exactly how ad-supported streaming video ought to be distributed and then to continually undermine it with pulled content, denied embedding, and a pay structure, it's clear that Hulu is on a death march toward obscurity.

Marking yet another blow to the site, Viacom (VIA) will be pulling The Daily Show, The Colbert Report, and other Comedy Central programming from Hulu's library. The split effectively removes the third most popular series on the site -- The Daily Show -- and, along with it, millions of online viewers who have day jobs and can't quite stay awake until 11:00 and 11:30.

Hulu's Senior Vice President of Content and Distribution Andy Forssell bid a fond farewell -- though the "fond" is questionable -- to Viacom and its programming in the company's blog. He mentions the "very strong results" Comedy Central content produced and the "steadily increasing revenue per view" as advertisers began noting Hulu's wide audience. But despite those upsides, Forssell writes, "We ultimately were unable to secure the rights to extend these shows for a much longer period of time."

In short, Viacom is another typical media corporation -- short-sighted and greedy.

An anonymous Viacom employee inadvertently confirmed this to the New York Times. The employee said, "We tried to reach a deal; we got close; we continued to talk even over the weekend. But we could not agree on a price."

Although no specific figure was mentioned, providers tend to earn 50% to 70% of the revenue generated by the content -- the rest goes to Hulu. The Times' Brian Stelter considers that negotiations may have broken down over upfront payments or premiums to the more popular shows -- like some Comedy Central series. Programs that keep a viewer on the site to browse other content is known as a "halo effect" and Hulu has paid extra for it -- according to an anonymous source involved with the talks.

However, the split with Viacom is especially strange because the company itself is otherwise open-minded with providing free online content. It, too, provides a guideline on what online video can and should be by posting nearly every sketch, segment, and interview from The Daily Show and The Colbert Report on the shows' official sites. (Daily Show's Kilborn era is regrettably omitted, but that's just nitpicking.) And every season of Comedy Central's veteran show South Park is also available free -- and, most surprisingly, uninterrupted by commercials.

But now, with Hulu no longer streaming its content, Viacom regains all the viewers and the ad revenue that they generate. Good for it, bad for Hulu.

Viacom's exit follows a year of bad news for Hulu fans. News Corp's Jonathan Miller and Carey Chase hinting at a pay structure (See How News Corp Could Kill Hulu). NBC's pillar of wisdom Jeff Zucker lying about blocking Boxee's access to Hulu (See NBC's Jeff Zucker Caught in a Boxee-Hulu Lie). NBC completely removing any trace of Conan O'Brien from both Hulu and NBC.com. The companies continually ignore what Hulu means to viewers -- some of whom are actually canceling their cable subscriptions because of the ease of watching Hulu (See Cable Wars Get Litigious).

Hulu is doomed to fail if these practices continue. But look at the upside: BitTorrent's about to get a helluva lot more expansive!
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