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Summary:

Barring a last-minute fix or change of strategy, at midnight Tuesday Hulu.com will switch from a co-host for online video of the Daily Show…

Jon Stewart Hulu2
photo: "The Daily Show With Jon Stewart" on Hulu

Barring a last-minute fix or change of strategy, at midnight Tuesday Hulu.com will switch from a co-host for online video of the Daily Show with Jon Stewart and The Colbert Report to a referral engine for the popular shows. Viacom (NYSE: VIA) execs like to call it a test but after 21 months it’s become a habit for those who relied on Hulu for one-stop viewing.

Viacom CEO Philippe Dauman told investors at a Credit Suisse conference the 21-month stint was a test and this doesn’t have to be a permanent separation. “In the current economic model, there is not that much in it for us to continue at this time,” Dauman said, according to Multichannel News. “If they can get to the point where the monetization model is better, then we may go back.”

What does the change actually mean for the two in terms of video numbers? No one outside of the Disney-News Corp.-NBC Universal (NYSE: GE) joint venture can be sure how much video traffic Stephen Colbert and Jon Stewart actually account for on the video portal and even though it may look possible, we aren’t likely to get a good clue when the March and April video rankings come out. On the surface, it looks like Viacom, which has been neck and neck with Hulu this past year, should gain some ground. But the actual effect of losing one or two shows or gaining the video traffic from them is much harder to gauge. Comedy Central wanted a better deal from Hulu because it thinks the two shows are more valuable; without that deal, they hope to raise the value to Viacom and MTV Networks by taking it all in house.

Video viewing impact: Thanks to its one-stop status for so many primetime shows, Hulu had a wide lead over everyone but Google (NSDQ: GOOG) for the number of videos viewed in January, according to *comScore* Media Metrix. YouTube/Google served 12.8 billion videos compared with 903 million for Hulu. The portal’s share is estimated at 2.8, Viacom Digital is #5 with 361,228 videos served and a 1.1 share. But when it comes to unique viewers, the two are much closer: Hulu was #5 with 38.4 million, Viacom was #6 with just over 38 million and that’s where the change is likely to be most visible.

And Viacom could still take a hit. Hulu will continue to refer users through its search engine but Stewart and Colbert clips are very popular embed material. Video views accrue through the player so should work to the parent site’s advantage even when embedded elsewhere. But getting people to the right place to grab the embeds could leak some viewers as could the one big difference between the two players: Comedy Central doesn’t allow viewers to make their own clips.

  1. Ultimately I don’t think viewers care where the content is hosted, so if video becomes more splintered across competing sites, viewers will probably rely more on search and discovery engines that can show all the options, then point to where to watch.

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  2. I find it interesting that this article chooses to highlight (with bolded text as well as with emphasis in wording) the “unique viewers” metric employed by comScore while downplaying the “videos viewed” information.

    While it’s true that both sites are very close in the number of unique viewers, I would say that the number of videos actually watched by those unique viewers is a more telling measurement of the watchability and ease of use. By this metric, Viacom has less than 40% of the figures of Hulu: rating 361M to Hulu’s #2 spot of more than 900M. More and more households are streaming content from sites to televisions, and streaming off of one portal is much easier than dozens of host sites. Viacom is making the same mistake it made in 2007 when it pushed all its video content off of YouTube: always one step behind trends, it is operating off increasingly inaccurate assumptions.

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  3. Very good point ChrisB. There’s generally a clear user preference for “one-stop shopping” i.e. aggregators, something that Hulu, given the strength of its UX, is well positioned to benefit from. This really manifests in the engagement metrics (i.e. ad impressions per viewer aka $$$) rather than reach per se, which just isn’t as important. When the web becomes the first place where people go to consume television content, I think search (which in this space is heavily driven by on air programming schedules and release windows at present) will be relatively less important for content discovery.

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  4. We can expect to see Comedy Central work a deal with Hulu at some point. The type of advertising that Hulu offers is too beneficial for any network to pass up. Yes their traffic numbers aren’t as profound as youtube, but when it comes to visitors, uniqueness is the important factor. http://www.weltbranding.com/blog/2010/03/much-ado-about-hulu/ tells why a deal is in the future for Comedy Central and Hulu.

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