Hulu announced a major renewal and expansion of its content deal with Viacom, a move that underscores the battle among Hulu, Netflix (NASDAQ: NFLX), Amazon and other high-profile streaming video services.
Under its new agreement with Viacom, Hulu will have exclusive subscription VOD rights to popular Comedy Central titles including Inside Amy Schumer, Key and Peele, Broad City and Drunk History. Other Hulu exclusives from Viacom will include Nickelodeon's Teenage Mutant Ninja Turtles, Rabbids Invasion, and Sanjay and Craig, as well as MTV's Faking It and Finding Carter.
The renewal expands a partnership carved out in 2011, when Viacom brought Comedy Central's The Daily Show and The Colbert Report to Hulu.
It also comes about a month after Hulu poached from Netflix rights to programming from premium network Epix, which is co-owned by Viacom's Paramount Pictures unit, along with Lionsgate and MGM.
Nickelodeon has been an aggressive licensor to Netflix since the SVOD service kick-started the entire streaming video business five years ago. But the move came at a steep price, with streaming availability of Viacom shows directly cannibalizing its linear ratings. The situation also affected Viacom's negotiating leverage for carriage on pay-TV systems.
Hulu is no match yet for Netflix in terms of audience reach; Hulu counted roughly 9 million U.S. subscribers around six months ago, while Netflix reported around 42 million U.S. customers in the second quarter. But Hulu is beginning to cut into Netflix's dominant market share for content at a time when Netflix is trying to aggressively expand overseas.
Hulu's success is partly due to the terms it offers content owners. Programmers say Hulu -- which is co-owned by 21st Century Fox, Comcast/NBCUniversal and Walt Disney/ABC -- offers them a lucrative exclusive license fee while also giving them the flexibility to offer current-season episodes on pay-TV VOD and TV Everywhere platforms. Hulu also allows programmers to brand their content on Hulu.
"Ultimately, it comes down to the fact that we welcome the money paid by the subscription video on demand business, but we worry about the loss of association between our original programming and our brand," FX President John Landgraf told the Wall Street Journal in December. "We want our shows associated with our brand, and we want to be able to provide a robust non-linear experience in service to our customers."
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