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October 6, 2015

CBS, Viacom in Talks With Hulu

by Nick Zaino, posted Jun 23rd 2010 12:30AM
Hulu, CBS in talksHulu may be in for some major changes. According to a report on Bloomberg.com, the site is in talks with CBS to offer the network's shows to paying customers. Viacom, the parent company of MTV and Comedy Central, and Time Warner, parent company of TBS and TNT, are looking at a different service called TV Everywhere that would allow customers already paying for cable or satellite service to watch shows for free online.

Bloomberg.com notes that Hulu took a heavy hit when Viacom removed 'The Daily Show' and 'The Colbert Report' from its free service, with a decrease in viewship from 14.1 million in February to 12.2 million in March. And if TV Everywhere does work out for Viacom, it's unlikely they would keep negotiating with Hulu.

Hulu CEO said in the Bloomberg piece that the ad-supported revenue model is working. According to the piece, 72 percent of February's profits went to content owners, which still gives Hulu a share of just over two million dollars.

The problem comes in the disparity between ad time on Hulu, which features about four minutes worth of ads as opposed to the roughly 16 minutes on broadcast television. That means the return on ad revue is smaller for Hulu than for a standard broadcast, a trend most networks would probably like to avoid.

Hulu is also facing more competition for TV and movies online, most notably from Netflix, a subscription service. Until one format proves to be a winner for broadcast and cable networks and for companies like Hulu, expect the sands to keep shifting.

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