There is an interesting article in today's NYT about Viacom taking The Daily Show, The Colbert Report and other Comedy Central content off of Hulu.com:
http://www.nytimes.com/2010/03/03/business/media/03hulu.html?ref=technology
The article reports the talks between Viacom and Hulu broke down over price, but I think the disagreement reflects larges issues that media companies are currently facing. This quote from the article says it all:
"The decision also highlights the large gulf between the expectations of consumers — who demand a wealth of free and easily accessible content on the Internet — and the media companies, who are seeking a more profitable business model online."
In the end, consumers drive the market. We want our entertainment on-demand, on the device of our choice, and we aren't willing to pay for it (not directly at least). If Viacom isn't willing to provide content on the terms that consumers demand, than somebody else will. I do sympathize with Viacom, since their ability to monetize online content is likely will below the revenue that are used to receiving per eyeball over traditional distribution platforms. However, the fact of the matter is that the longer they try to swim upstream, the longer it will take them to catch up once they realize that change is inevitable. If they are bailing from Hulu they better have other experiments in the pipeline.
We've seen this story play out before. When VHS first came out, movie studios claimed it was the tools of pirates and thieves and would ruin the film industry. In fact, the opposite occurred. Over the past decade VHS/DVD sales have surpassed box office sales and are the number one reason the movie industry continues to flourish.
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