The blogs are abuzz this morning with a new prediction from Screen Digest analyst Arash Amel, who says that Hulu will generate as much revenue as YouTube next year. What’s surprising about this statement is that it isn’t surprising at all. In fact, in the current race between the two online video rivals, the upstart Hulu is starting to feel like President-elect Barack Obama, while YouTube is looking more like McCain.
Amel told the Financial Times yesterday that he believes YouTube will generate roughly $100 million in revenue in the U.S. this year, compared with $70 million at Hulu. Next year the two companies will be on par, with Amel projecting each generating $180 million in the United States. Amel isn’t the first make such a prediction. Mark Cuban boldly made a similar statement (without specific numbers) back in June. [digg=http://digg.com/tech_news/How_Hulu_is_Like_Obama]
Because Hulu only deals with premium content, it’s always been theoretically able to monetize all of its offerings. Earlier this year, it was reported that YouTube, which only shows ads on partners’ videos, could therefore monetize just 4 percent of its content (it has since added ads on search pages). Though it has more volume, it’s shifted into high gear, adding more advertiser-friendly premium content providers like MGM, Lionsgate and CBS to its roster.
Additionally, YouTube has added to its advertisement options. Last week, the company announced the availability of ads in embedded videos (at our NewTeeVee Live conference) and officially unveiled its sponsored videos program.
But YouTube’s actions as of late feel sort of like John McCain’s campaign in the waning days of the election. The company is under the gun to make money and, knowing it’s behind the eight ball, is throwing everything and anything it can at the problem. Heck, the company even flip-flopped on pre-roll ads.
To keep the campaign metaphor going, Hulu feels like the “No drama Obama,” especially after hearing CEO Jason Kilar speak at NewTeeVee Live last week. He was cool and collected as he talked about the vast $80 billion ad revenue pool Hulu can draw from (for all of its content). Kilar also spoke about his company’s obsessive attention to detail, especially when it comes to advertising and engaging the viewers to make ads less icky. It’s integrated a thumbs up/down voting system for viewers to rate ads as well as giving users more choice with ad options. Users can not only choose from different ads to watch during their programming, but also are sometimes given the option of watching a pre-roll or a mid-roll.
YouTube still trumps Hulu (and everyone else) in terms of traffic, so you can’t count it out. And Hulu is completely reliant on its partners for its content; FOX or NBC could theoretically pick up their marbles and go home. But with Hulu growing quickly — the service hasn’t even been open to the public for a year, and it says it currently receives 12 million visitors and serves up 145 million streams per month — that seems unlikely at this point.