Hulu Headwinds: Video Site Loses 'Daily Show' and 'Colbert Report'

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Premium video portal Hulu has lost the streaming rights for Comedy Central programs "The Daily Show with Jon Stewart" and "The Colbert Report" after failing to negotiate an extension with Viacom, which owns the cable network.

The breakdown represents a significant setback for Hulu, for whom both shows rank consistently among its most popular content. For this week, The Daily Show ranked as the third most popular show on the site, and The Colbert Report ranked 9th.

It's also the latest sign Hulu is encountering its first major setbacks after two years of solid traffic and partner growth.

Another recent problem for Hulu has been its stymied efforts to launch in the U.K., despite repeatedly expressing its intention to do so. While it has been delayed, presumably wrangling over streaming rights with broadcasters, competitors have begun offering long-form video content in the market. They include SeeSaw, which launched last month, and YouTube, which debuted its own Shows section late last year. Both are providing content from U.K. broadcasters like Channel 4, Five, and BBC's commercial arm, BBC Worldwide.

However, Hulu continues to enjoy steady traffic increases in the U.S. In December, the site racked up more than 1 billion video views, an all-time high that represents 3 percent of U.S. video viewing.

According to a report in The New York Times, Viacom and Hulu came close to renewing a deal over the weekend, but ultimately couldn't agree on a price. If true, that suggests Comedy Central and Viacom are not categorically opposed to online syndication - even to Hulu, if the terms are acceptable.

For now, full-length Colbert Report and Daily Show episodes will live only on their branded Web sites. All episodes will be removed from Hulu by midnight on next Tuesday, March 9.

Comedy Central has made the two shows available to consumers through Hulu since June 2008. Although that agreement has concluded, full-length episodes of each program will remain available at TheDailyShow.com and ColbertNation.com, respectively.

In a statement, Viacom said, "Hulu was one of the many digital distribution partners we've worked with over the past few years to add new outlets for our valuable and powerful content and to help drive the businesses of our partners. We had a great experience with Hulu, and we hope to work with its team again in the future."

In a blog post published yesterday, Hulu's Andy Forssell SVP, Content & Distribution, wrote, "In the past 21 months, we've had very strong results for both Hulu and Comedy Central, in terms of the views and revenue we've generated."

He continued, "After a series of discussions with the team at Comedy Central, though, we ultimately were unable to secure the rights to extend these shows for a much longer period of time." Hulu is a joint venture whose investors include major broadcast networks NBC, Fox, and ABC.

Follow Zach Rodgers on Twitter at @zachrodgers.