The Facts About NBC (GE) on YouTube, Hulu, and iTunes*

The folks at NBC were kind enough to help clear up some of the misinformation that has been floating around with regard to NBC’s yanking its videos from YouTube, its purported Hulu exclusivity, and other topics.  

Key points:

  • NBC pulled its promotional videos off YouTube to support Hulu launch (widely reported)
  • NBC will not distribute video exclusively through Hulu (misreported on some sites, good news for NBC, and bad news for Hulu).*
  • NBC will continue to distribute ad-supported show episodes through NBC Direct (when it finally launches)
  • NBC will continue to sell video on Amazon and iTunes.
  • The fact that NBC videos are still available on iTunes even after NBC elected not to renew its iTunes contract is NOT evidence that NBC was just blowing hot air or has gone weak in the knees.  The episodes available on iTunes are the ones from last season that iTunes already had the right to distribute (“Heroes,” etc.)  NBC’s new shows–such as Bionic Woman–are not available on iTunes.
  • Beth Comstock is still at NBC.

The reason why NBC’s decision to distribute video through sources besides Hulu is good news for NBC is that Hulu might crater and/or NBC’s distribution might suffer if it uses only one distributor.  The reason this is bad for Hulu is that Hulu has almost nothing going for it except rights to content that Internet users might not be able to find elsewhere.  The fact that they will be able to find some of this content elsewhere makes it even less likely that users will flock to Hulu.

This situation reveals one of the problems with the Hulu structure.  NBC faces a conflict of interest in its dual role as 1) Hulu investor and 2) Hulu supplier.  As a Hulu investor, NBC should want to do everything possible to help Hulu succeed.  As a Hulu supplier, NBC should do everything possible to make sure it doesn’t put all its eggs in the Hulu basket, give Hulu especially sweet distribution terms,  or even favour Hulu over any other distributor. 

We continue to believe that these challenges and others will eventually doom Hulu to failure.

*Further research reveals that there is some exclusivity here.  Hulu will have the exclusive right to distribute NBC TV entertainment content (but not news, sports, or movies) through third-party syndication partners such as AOL or MSN.  NBC will be allowed to stream the same ad-supported content on and all of its network sites–it just won’t be allowed to syndicate this distribution through other sites for a couple of years.  For more, please see: Hulu’s Exclusivity and Business Model Explained

See Also:
Why Hulu is Screwed, 1
Why Hulu is Screwed, 2: Bad Economics
analysing NBC’s defence of Hulu
CBS’s Quincy Smith: Hulu Strategy a Waste of Time/Money

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