Hulu success emphasises YouTube ad struggle

YouTube is in danger of being upstaged commercially by Hulu – backed by News Corporation and NBC Universal – as the video-sharing site struggles to make its massive global audience appeal to advertisers.

Hulu, a video site showing only professional TV shows and movies, is forecast to draw level with Google's YouTube in US advertising revenues next year.

The feat suggests traditional media companies can make money online without having to cede control to Google, as the music industry did to Apple, whose iTunes music store dominates the digital music market. It also shows the difficulties other social networks might have in generating revenues from their amateur content.

YouTube, for which Google paid $1.65bn two years ago, is by some distance the most popular online video destination, with 83m unique viewers in the US in September, compared to Hulu's 6m, according to market researcher Nielsen.

But Hulu's advertising revenues are growing more quickly, according to Screen Digest. Neither company breaks out its advertising revenues but the researchers forecast that in 2008 YouTube will generate about $100 million in the US, compared with about $70 million at Hulu. Next year both sites will generate about $180 million in the US, they say. YouTube currently earns around half of its revenues in the US, while Hulu has not yet launched internationally (see below).

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