Peter Kafka

Recent Posts by Peter Kafka

Hulu Loses Its Moment of Zen: What Will It Do Without Jon Stewart and Stephen Colbert?

So two of Hulu’s biggest draws–“The Daily Show” and “The Colbert Report”–are leaving the Web site and retreating back to Viacom’s Comedy Central. What does this mean?

In practice, not that much. Particularly in the near term.

The shows are big draws for Hulu, but the site’s audience is growing very fast, and I’ll be surprised if you can detect a notable drop in its numbers this spring. And online viewers can still watch the shows at Comedy Central’s two sites, though its player is vastly inferior to Hulu’s.

But the move does illustrate the difficulty with Hulu’s business model: It is trying to build a business around other people’s content.

Hulu gets the ability to sell against network TV shows from its network TV owners–News Corp.’s (NWS) Fox, GE’s (GE) NBC and Disney’s (DIS) ABC–but it can only keep 30 percent of the revenue. It generally gets better terms from other content providers, but it’s harder to get the really good stuff from them, particularly from cable TV, where programmers need to protect their existing revenue streams.

If the cable TV guys get their way and the world shifts to a “TV Everywhere” model–pay for cable TV, and you can watch all those shows on the Web, too–procuring shows will get much easier for Hulu. Because that conflict should go away.

But in a TV Everywhere world, the use case for Hulu sort of goes away too. Because in that model, you don’t really need a central hub for TV on the Web.

Meanwhile, Viacom (VIA) has now retreated from the Web’s two most popular video portals. You haven’t been able to watch Jon Stewart or Stephen Colbert on Google’s (GOOG) YouTube since the two companies went to court, and that conflict has been dragging on for nearly three years.

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There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle