Hulu already making more money than YouTube

http://mediamemo.allthingsd.com/20081117/when-will-hulu-catch-youtube-it-already-has/

by pakafka • 18 years ago

43 44 18 years ago

mediamemo.allthingsd.com

krschultz3• 18 years ago

Not all that surprising if you think about it, a lot of people assume eyeballs = money, but the quality of the eyeballs is more important than the quantity. What are you going to sell to a bunch of kids watching videos of backyard wrestling? Hulu has quality TV shows, which attract a better audience. Considering some of the biggest show on Hulu are SNL, the Daily Show, Colbert, etc the audience has a pretty well educated lean.

This is Facebook's underlying problem. All the network effects in the world just aren't as valuable as Facebook would like you to believe when the site is nearly all broke college students wasting time.

iamdave2• 18 years ago

That last sentence is so true it hurts, and that's a point I've been trying to preach for a very long time (only to get downvotes). There is nothing of worth on Facebook. Nothing.

Was it Mashable.com that did the study and found that almost every Facebook app was developed and marketed as a "just for fun" app?

I find more utility out of Twitter than I do Facebook; over the last year I've made four new friends on Twitter who live near me one of whom is about to let me rent a house from him. That's utility, and it's organic; I don't need some marketplace to look for someone to rent from. When you're capable of making connections just on location alone and let people do the work of becoming friends you've got something. And on that, Twitter beats out Facebook everytime.

justindz2• 18 years ago

If I couldn't pipe my Twitter updates to Facebook, I would never update Facebook.

ryanwaggoner3• 18 years ago

"There is nothing of worth on Facebook. Nothing."

I could not disagree more. Facebook is rapidly replacing email, phone, and other channels as the method that many people use to keep up with friends and family. My parents and literally hundreds of their friends have started using it over the last six months and now use it aggressively. These people are definitely not early adopters or anything...most of them are conservative midwesterners in their 40s and 50s, and most of them are very active on a daily basis, using everything from status updates to photo uploads.

Facebook hasn't figured out how to monetize their userbase yet, but the social utility value is enormous.

unalone4• 18 years ago

Facebook has the eyes of nearly every kid from the age of 14-22 at this point, and it's still growing rapidly. That's something of worth. Perhaps it isn't something that lends to advertising easily (though Facebook is adapting a new ad scheme that I like a lot), but don't dismiss that as being nothing of worth.

webwright• 18 years ago

This isn't about quality of eyeballs.

And college students are a great demo to market to (they buy all sorts of things).

This is about Hulu coming out of the gates with ads, and having a big pile of salespeople who know how to sell ads for TV shows. The players involved all have existing relationships with entities who BUY video advertising... They have a fully-baked business model from stage 1.

Youtube is JUST starting to experiment with it (and trying to build a more innovative model than the existing "just toss in commercials" option.

netcan• 18 years ago

I agree that citing 'quality of eyeballs' is silly. Actually just as silly as assuming eyeballs=money.

In fact, eyeballs have never really equalled money. The ability to affect the things behind those eyeballs = money. Actually, the perception of businesses of the potential to affect the things behind those eyeballs = money.

Your right. Hulu hasn't really proven anything yet. They've proven that they can get ad buyers to buy online if presented with something similar enough to offline TV. You can build a reasonable business based on this model, apparently.

But it's true that Youtube hasn't proved anything yet business-wise.

mattmaroon4• 18 years ago

Hulu might have them on quantity of monetizeable eyeballs. YouTube can only run ads on a tiny % of videos. Hulu can run ads on 100%.

Quality does count for something though. People will pay a higher CPM for 25-35 year old males than they will for 18-22.

mattmaroon4• 18 years ago

Even worse for Facebook, it's nearly all foreign people. There's just very little money to be made on the web outside of the U.S. Most other countries are either too poor or too small.

ojbyrne2• 18 years ago

Back to Hulu vs. Youtube, I wonder how much of this is due to the fact that you can't get to Hulu outside the US.

nailer• 18 years ago

Exactly. There are definitely not 800,000 Europeans, and the standard of living in the EU is really bad. I, for one, live in a cardboard box.

American entrepreneurs should keep away from this market! THERE IS NO MONEY TO BE HAD HERE.

mynameishere2• 18 years ago

Hulu is piracy-free, high-quality, and has real commercials. That gives it three pretty distinct advantages over youtube.

mdasen2• 18 years ago

Totally, plus Hulu has a much easier job. YouTube has to store millions upon millions of videos and make them searchable. Hulu has very few videos by comparison, they can be pre-processed by people who know what they're doing, they know how many more GB of video they'll get each week, they have a pretty good idea of which of their videos will be most popular. . .

YouTube is based off of the unknown becoming known. Hulu knows how much storage it needs, and what's going to be the most popular. They can push the latest episode of the Office to CDNs knowing it will generate a lot of traffic. YouTube can only do that in reaction to content that becomes popular.

It's incredible that YouTube works as well as it does considering the number of unknowns they have to deal with. Hulu has a really easy job adding, say, 100 videos a week.

Hexstream2• 18 years ago

"[Hulu] can push the latest episode of the Office to CDNs knowing it will generate a lot of traffic. YouTube can only do that in reaction to content that becomes popular."

Isn't that automat{ed,able}?

chris11• 18 years ago

In my experience that's true. Any other video sites that have full episodes (surfthechannel and megavideo) have problems with quality. The sound on some of the videos on megavideo will sometimes lag by one or two seconds. Now if only hulu would keep tv shows on there for longer than a few weeks.

jonknee• 18 years ago

That's not surprising at all, all Hulu content has advertising. It tilts long-form too, so there are more ads you can watch in a 20 minute TV show or 2 hour movie than 20-seconds of a panda sneezing.

mynameishere2• 18 years ago

Holy crap. 25 million views?

http://www.youtube.com/watch?v=FzRH3iTQPrk

How can I spend 12 hours a day on the internet and not have seen that? I was equally shocked when the whole benny lava craze passed me by.

http://www.youtube.com/watch?v=ZA1NoOOoaNw

nickb• 18 years ago

You can't easily sell advertising against user generated content. YouTube's inventory is full of UGC videos and advertisers simply don't want to be associated with it. YouTube has a whole bunch of partners that produce videos & syndicate them through YouTube and are making money by selling advertising against them.

This is why live streaming video companies have such hard time monetizing... it's impossible for advertisers to approve of the content since no one knows what people will do while the feed is live.

Since Hulu has high-quality content, they can command premium prices for advertising and since they're funded/owned by big media companies, they even benefit from their ad sales teams.

kleneway• 18 years ago

IMHO, Hulu's incredible success is a big milestone in the inevitable digital entertainment convergence story.

Prediction: The next-gen gaming consoles will bring together TV and movie streaming services to put a ton of pressure on both the traditional rental market and cable companies. I could see Xbox 720 partnering with Hulu + Netflix streaming, PS4 hooking up with YouTube, and potentially Apple building a gaming platform + iTunes (or maybe partnering with Nintendo). Along with a convergence of tv, movies, and gaming, the platforms already have a social network component that will bring together social media experiences that will create new forms of entertainment that cable companies simply can't match. Just like home phones were a no-brainer necessity prior to cell phone ubiquity, so are the days numbered for big cable.

sahaj• 18 years ago

i believe the reason hulu is able to monetize is because they know the industry well. these guys already have the contacts and the content in place. i think youtube will rise to the top eventually when the show creator realizes that s/he can make more money on youtube. the already established companies that run hulu have a higher cost to operate than youtube. also, since youtube deals with a higher volume of content (both short clips and long clips), they know how to manage/automate a lot of their tasks that in the long run will lower operating expenses (head count).

another thing to take note, is that youtube is adding a lot of older content (old tv shows) to their collection. they already have the younger audience, and now they are trying to capture the older audience. the people in the middle who go to hulu are in the 20-30 year old range. this is a smaller segment of the population that is already familiar with youtube, and therefore already recognize the brand. so, if youtube succeeds with capturing the mature audience (people with money), they are establishing a business that is far more leverage-able than hulu.

vaksel• 18 years ago

apples and oranges, Hulu = premium content that you'd want to watch. They produce their own content so they can monetize it better(advertisers actually want to pay for it). Youtube = amateur content(crappy quality), which for the most part sucks.

krschultz3• 18 years ago

Exacerbated by the poor video quality of YouTube, Vimeo is amateur videos with a higher median quality in terms of production value, simply because they host a better resolution applet.

unalone4• 18 years ago

I notice, though, that a good deal of Vimeo ads are for BustedTees, which is also owned by Connected Ventures. Is it doing that great a job of making money standalone? I thought it earned most of its money by selling premium accounts.

breck• 18 years ago

But if YouTube increases search volume on Google by 1%, that equals $200M additional revenue to Goog.

jfarmer• 18 years ago

Ad-supported companies exist in a two-sided market.

Users give you attention in exchange for a media product. You resell that attention to advertises for a profit.

Most technically minded folk, for whatever reason, only focus on the first half of the equation, which mostly boils down to product decisions, and when they focus on the second they come up with stuff like micro-targeting or Facebook Beacon.

Hulu isn't making more money than YouTube because the product is less risky, although that is true. They're also most making more money because they have a more lucrative audience, which is also true.

They're making more money because they have experience as a media company and know how to field a killer ad sales team. Don't under estimate soft power. :)

paul9290• 18 years ago

Hulu is awesome! No need for cable TV!

I was thinking someone needs to make a Twitter/online TV Guide service. Like blip.fm sorta... maybe this is an idea worth working on? I have more ideas on it if interested...

Hulu already making more money than YouTube

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