Something’s wrong with YouTube, and it looks like Hulu stands to benefit. YouTube, as you’re all painfully aware, is primarily comprised of short videos of guys falling off their skateboards (embedded here), dudes playing video game songs on the piano and illegal Seinfeld clips. Those types of videos aren’t attractive to advertisers. That may explain why YouTube, which had 83 million unique hits in September, is only expected to generate $100 million for the year.
Compare that to Hulu, which primarily consists of professionally made NBC and Fox shows and clips—I just wasted quite a few minutes watching a few “popular” Simpsons clips, for example. That all of the content there is nice and legal makes it more appealing to advertisers, which explains why, even though with only 6 million hits in September, Hulu is expected to generate to $70m.
Both sites are expected to generate $180 million next year. Don’t think that’s because, overnight, Hulu increases its viewership 10-fold.
In other words, people (“analysts” and the like) are now wondering how, if ever, will Google will turn YouTube into a monetary success.
Don’t forget that Google paid $1.65 billion for the site two years ago—that’s a lot of skateboarding videos for which to sell ads.
Hulu sometimes shows free movies. Thats the reason it is still accepted by people. As for YouTube…they dont have the best flash player in the market…I think Hulu and Vimeo are better in this aspect. But by popularity Hulu can almost hardly catch up with Youtube (#3 ranked by Alexa)…
http://www.livbit.com
The only commercials I ever see on Hulu lately are public service announcements- “Feed The Pig” and Smokey Bear. Doesn’t speak well to their ability to fill their advertising inventory.
Kind of annoying that they default to public service ads rather than just not showing ads when there’s no inventory, but I guess they don’t want to surprise people if/when the odd Lexus ad shows up.
Hulu also shows commercials for places like T.G.I. Fridays, Outback steakhouse, Chili’s, and movies. Although, lately, it has been a bunch of random PSAs, some of which are a bit weird (i.e. Feed the Pig)
I watch a ton of hulu, mainly because i don’t have cable or satilite tv. And while there are plenty of the smokey bear, and feed the pig commercials there are also plenty of sprint instinct and hyatt and other real commercials. i think these guys have a buisness model that’s working well but like all others the need to figure out how to continue to grow.
Most likely they’ll make it up through their pay per click model.
Last week they just announced sponsored videos for YouTube. Basically, they copied their adwords system over and applied it to youtube.
So now you’ll see sponsored videos on the right side of videos when you type in a search.
This should be lucrative for them. I wrote an article on this topic last Thursday on my blog. It’ll tell you how this new ad model will play out.
Doesnt make much sense at all now does it?
jess
http://www.privacy.mx.tc
This article is out dated because you don’t mention Youtube’s latest efforts to bring in CBS shows, and MGM’s full feature films. Sure it’s not like HULu already, but if you were to write an article comparing Hulu and Youtube on November 17th 2008 you ought to have mentioned these youtube updates.
Hmm…
You tube is a brand name now, no one hears hulu before hearing youtube.
:)
Peace!
If you want people to watch full-length episodes and really make your ads worth any money, you should think about creating the kind of user experience people actually want to sit though.
I won’t spend my time trying to watch full-length content on a site like YouTube. The Flash player doesn’t even cut it. FOX, ABC, and to some extent, Hulu make it worthwhile–and until YouTube makes the jump to providing a quality stream, I’ll be getting my fill of professional content on those sites.
Hulu is pretty good…but I also came across http://www.tidaltv.com
great concept. Might do really well in the future.
TidalTV sucks. It’s so stupid and crappy, it stops short of being a video provider and instead just a link to abc, nbc and all the main channels content.
It’s funny that I just came across this post after reading Valleywag’s take on it (http://valleywag.com/5090814/hulu-wants-me-to-tell-you-theyre-catching-up-with-youtube). Excerpt:
“You’ve never heard of media analyst company Screen Digest. Keep that in mind when you stumble upon a few dozen news reports today that claim ‘Hulu … a smaller upstart backed by News Corporation and NBC Universal … is forecast to draw level with Google’s YouTube in US advertising revenues next year.’”
Nicholas, while I do agree with you that Hulu, is a tremendous success. ( I watch it more then i do regular television) It’s not to say that Google will not be able to monetize on all those Youtube viewers.
Youtube’s is currently the #2 search engine. All google needs to do is continue to slowly integrate youtube into the Adsense/Adwords business models, and they will have a sustainable business.
In the end, Online Video is here to stay and we are at the beginning of media revolution
I think Hulu should be destroyed. I always report it as a bad link because it is only for the united states and amazingly enough there are other people than americans in this world. NBC and FOX broadcast its signal free to canadians with antenae’s so why can’t they do it on the internet?
Sounds like bull to me
Why don’t they allow it outside the US? It’s to do with copyrights and distribution licenses. Their content is licensed for distribution in the US by certain companies. Few companies have the license to distribute elsewhere, and sadly it has to be a country by country basis IIRC. It’s a problem of real world political boundries infringing on the ideally borderless internet.
Why? Because Hulu has a better ad sales team, for one. Beyond that, it’s more controlled and the quality is consistently higher.
Ask any media buyer which they’d prefer.
Well you got me interested. I will
see what there is to explore at Hulu
right now!
thanks tony
This is false. There are a couple of reasons why youtube makes less per user than Hulu, and it has little to do with the attraction of advertisers:
Youtube uses html CPM (cost per thousand) advertisements, which probably pays about $.50-1 on average (quite a good rate).
They show one advertisement for every video that the user watches.
Hulu doesn’t use html ads on their site. Instead, they use video format ads that last from 10-30 seconds. On average, those advertisements pay $15-30 CPM. So Hulu makes about 30 times as much on each ad than youtube.
In addition to that, Hulu shows Video ads anywhere from 4-10 times each video. So while youtube has one ad that pays $.50 per video, hulu has 10 ads that pay $30.
It’s actually pretty amazing that youtube does as well as they do. They keep up by selling a lot more advertisements, if you consider how many videos the average youtube watcher sees every day. Probably 2-3, but it varies.
The reason has everything to do with the fact that “normal” tv is established and marketers have all sorts of statistics to say how much they will make for X amount of advertising. So the advertising rates on standard tv-like platforms like hulu get paid about the same as they get paid broadcasting on a normal tv.
Youtube and other such new advertising platforms don’t get that money for two reasons. One because a lot of advertising agencies and marketers aren’t sure exactly what the return will be on their advertising dollars. They are leary that the return will be about the same as what they see on other forms of web advertisement, which isn’t nearly as good as eye-balls watching a tv.
The second reason is that those who do know that the return on advertisement on youtube is about what you get for regular tv ads or on hulu, they don’t have to pay the higher rates because no one else is.
Eventually this will all work itself out.
Once the data gets out there on the return rates and everyone has it, the prices will go up. It’s sort of like why full page web ads cost typically about what tv ads cost per thousand users. This is because the data is now widely known that, for instance, the average user who sees a full page ad will look at it for about 23 seconds and obviously it has their undivided attention for that span. So this is about equivalent to a regular commercial and the return rates can be shown to be about the same as a regular tv commercial. So hence advertisers pay about the same as they do for a commercial.
Banner ads and these type which are typically ignored or filtered out often pay as much as 1/50th as much per impression because there is a lot of data that shows that the return rate is about 1/50th of that of tv commercials and full page ads.
So, google needs to invest a lot of time and energy proving that the return rate for their advertisements on youtube are the same as hulu and then advertisers will start paying more.
Or they could just switch to using full page ads which typically pay out at $3 per thousand unique user impressions. So at 83 million unique users in september alone they would make minimum 250 million in that one month alone with each user only seeing 1 full page ad per month and they could get rid of all other forms of advertisement.
Typically full page ads show up once every 24 hour period per user, so there actual payout would be significantly greater than 250 million because many of those 83 million unique users a month return more than once a month.
Hulu only shows videos in U.S. Youtube has videos for U.S, and for all the world. I think Youtube has more opportunities to have more advertisers.
YouTube is available everywhere — Hulu only in the USA.
I enjoy hulu a lot and in no disrespect to hulu the two sites are very different. I would say the coming out party of youtube consisted of many shocking videos such as skateboarding falls, and obnoxious pranks etc but in no way does that translate to today. People go on youtube to watch music videos, live concerts of there favorite bands, instructional videos, and let’s not forget how many people subscribe to your “youtube stars” that get plenty of play. Youtube is evolving and becoming a significant part of our culture today. It promotes people to put there art on youtube whether it is comdedy, skits, or music etc….And with thousands of hits and subcribers these “unheard of stars” are suddenly famous. Moral of the story youtube and hulu are very different from eachother and i like both of them and so should the advertisers.
@Adam not everywhere, not in turkey
This is a stupid question. Is this merely just for page views?
Hulu is OWNED by NBC/Universal which already has the video advertisers (television remember that?) and is merely offering them a platform.
You only have to buy youtube once, it will pay for itself within ten years between money and reputation. From there it will make centuries of additional profits.
First, I bet if you compared advertising dollars per minute of video shown, you’d get a much closer comparison. I can routinely spend the length of one or two full episodes watching Hulu. But with youtube usually it’s just short clip and then I’m back to where I came from. So unique visitors is misleading.
Second, Hulu has an American userbase only, and that may be more lucrative to advertise to, since actual products that people buy in stores can be advertised, not just things sold on websites or stuff like that.
Third, don’t forget that the content on Hulu is not freely given to Hulu! They pay shitloads of dollars to produce that! Youtube doesn’t even have to ask for content, people just give it.
But since Hulu does produce quality content that keeps people’s attention for half-hours at a time, people pay more attention to it and maybe zone out, which might make advertising to them more effective.. or not.
Oh … why don’t you guys start comparing these site with actual TV channels ?
like CNN/BBC/Fox ?
Keep in mind that content on Youtube is free and google doesn’t pay anyone for it. Hulu on the other hand has to give close to 70% of their revenue away for content rights to various parties.
Hulu has commercials? I don’t think I’ve ever seen one ;)
Money isn’t the only measure of influence, even in today’s economy. Whatever its ad revenue, YouTube is the beating heart of internet culture right now. It remains to be seen how Hulu isn’t just TV on a new screen.
I use Rememote on Facebook instead of Hulu. They have shows from Fox, NBC, ABC, CBS and CWTV. ( http://apps.facebook.com/rememote )
Man, I can’t believe Google paid 1.65 billion for Youtube. Hulu will be huge if they ever go international with their content, I can’t watch Hulu in Canada, but I can watch people getting hit in the groin with Youtube.
There’s actually videos of vaginal inspections on YouTube. The advertising seems to have been turned off, but still.
I have never even seen an advertisements on Hulu.
Of course, that’s because I have never seen anything else on Hulu.
I try and try - but it turns out they don’t let anyone outside the United States view their content. So the *only* thing I have ever seen in a Hulu embedded video is a single text screen saying “We’re sorry, currently our video library can only be streamed within the United States.”
So for me, Hulu is completely worthless.
Youtube, on the other hand, works just fine.
-Spode
i am partial to hulu myself…
i am partial to hulu myself…