
Hulu already making more money than YouTube - pakafka
http://mediamemo.allthingsd.com/20081117/when-will-hulu-catch-youtube-it-already-has/
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krschultz
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.

~~~
iamdave
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.

~~~
ryanwaggoner
"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.

~~~
hexis
Perhaps it will turn out that people don't want their friendships to be
"monetized".

~~~
iamdave
The other side of the coin I've been trying to preach. Left and right you see
Facebook making some kind of big marketing maneuver, some new ad partner.

Maybe I'm naive to this new wave of web based business, but how has Facebook
managed to partner up with Microsoft, and all of these other ad providers and
not raise a single dime?

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

~~~
mdasen
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.

~~~
Hexstream
"[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}?

~~~
mdasen
Oh, you can totally automate that kind of thing - it's just a lot harder than
being able to predict.

Like, because Hulu deals with a comparatively small set of videos that are
uploaded by staff rather than end users, they don't need to build as much. If
there is a workflow that must be followed to upload the videos, that's fine.
It's a lot easier to develop for internal use than for end-users.

Likewise, with 100 videos a week Hulu could have one of their programmers
manually deal with a lot of stuff that YouTube couldn't since having a person
sort through or run a process on their millions of videos just isn't the same.

It's just an easier task. Yeah, clearly YouTube is possible, but it's hard.
You have to store a lot more data, you don't have staff entering in nice meta-
data and making sure they're aren't dupes, you don't have the option of
telling a user, "encode this on your computer and then SFTP it to here", you
have a ton more videos, you don't know what's popular.

It's a lot more software to write. It's what I find so impressive about
YouTube. Hulu is nice, but it isn't that impressive. With the little amount of
data they're storing it's easy to design databases and file storage systems
that will accommodate that and there are challenges pushing that much data
over a pipe as it's a popular site, but nothing like YouTube's challenges.

Look at it this way, YouTube has over 65,000 videos uploaded every single day!
And that's from way back in 2006! YouTube has increased its presence since
then. That's huge. Everything has to just work. Hulu gets what? 10 videos a
day and they have several fulltime staff? Heck, they could do most things
manually. Something is a little glitchy, they can just deal with it manually.

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nickb
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.

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vaksel
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.

~~~
krschultz
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.

~~~
unalone
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.

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kleneway
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.

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jfarmer
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. :)

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sahaj
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.

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jonknee
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.

~~~
mynameishere
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>

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paul9290
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...

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

