Tuesday, February 24, 2009

Hulu Beats YouTube: "Old Media Strikes Back"

"Old Media Strikes Back" -- not my headline, but that of Newsweek's, in a post dated 2/21/09.

Newsweek's sub-heading:
"Hulu, founded by NBC and Fox, has become a better moneymaker than Web darling YouTube. The moral: better content wins."

My blog, a week ago:
"Authoritative vs. "Amateur" is the general crux of the mainstream media companies' for pay-based content."

"The media companies are going to push "Authoritative" vs. "Amateur" within two years."

Again: my point is not that the YouTubes and Wikipedias of the world are amateur. My point is: big media will start to portray them as such though news reports and advertising.

From the Newsweek piece:

"Unlike YouTube, Hulu had legal access to great content—shows from NBC, Fox and others. And it had great technology—a clean, simple user interface and a smart search engine. Today, just one year after its launch, Hulu has gained the upper hand. "The empire is striking back," says Arash Amel, analyst for researcher Screen Digest. " (emphasis mine)

Now, the point can be made from reading the article that is making great money from their online advertising -- they are making money from *free content*.

But when we look closer at the advertising on Hulu -- it's resembling more and more traditional TV advertising!

"Hulu's team is trying new approaches to advertising that they hope will be more palatable to viewers, and more effective as well. One idea: a viewer can choose to see ads interspersed throughout a show, or can watch a single long advertisement up front. (But either way you can't skip through the ads.) Another example: a carmaker lets the viewer choose to see an ad for a pickup truck, a crossover SUV or a sports car—so the viewer gains some control, and the advertiser doesn't waste a pickup-truck ad on someone who wouldn't be caught dead in one."

Yes, it's placed differently. Yes, it's more "targeted" (which the media companies LOVE). But it's there, and you can't watch your Hulu show without watching it. Just like network TV. We've come full circle "This show brought to you by Lexus."

But then, can't the producers of independent videos -- like the ones on YouTube, for instance -- get these sweet ad deals too?

Big Media news outlet Newsweek pooh-poohs this idea:

"YouTube has lots of content, but from the perspective of advertisers much of it is utterly worthless. Nobody wants to tout their brand amid user-generated videos that could turn out to be almost anything..."

Yeah, nobody wants to see *amateur* stuff, the article is saying. They want to see "The Office." Right?


"Fun as it may be to watch someone's kitten playing with a piece of string, last night's episode of "The Office" makes for a more compelling experience."

Sure, because...all the clips on YouTube are just kittens playing with string, right? Sure.

One more interesting tid-bit. Again, from the Newsweek piece:

"Hulu insists it's not really competing with YouTube. In fact, its real victim might be cable companies. Why pay $100 per month for a cable subscription when you can get so much great stuff online at no cost?"

And again, from my blog:

"I always told the BF that once another Hulu-type streaming video service comes out, we were going to have to cancel the cable."

"We have media media media (inexpensive media) coming out off our butts. Which is awesome. Sucks to be the cable companies, though."

Next up? Look for sites like Hulu creating separate "premium" channels that you have to subscribe to. Just like the traditional cable model. Full circle.


  1. Anonymous6:55 PM

    I'm waiting for Hulu to start allowing you to upload videos.

    Videos that are either accepted or rejected, ala Revver.

    The days of any video getting on the web are almost over.

  2. Nah, you're wrong, remember? Evidence and rational perspective be damned.

  3. "The days of any video getting on the web are almost over."

    Yeah. Sometimes I browse on YouTube and just feel sentimental because I realize half that stuff won't be up there in a few years. On one hand, it is this wonderful, Utopian thing -- that I can get any clip I want on YouTube. But that's just it -- it's a Utopian thing.

    I predict that in an effort to monetize better, YouTube will attempt to go "legit" (a la Napster), cutting deals with major studios and deeply restricting what content can be uploaded.

    That said, there is always teh "underground" internets to download that stuff, I suppose.

  4. "...had legal access to great content—shows from NBC, Fox and others..."

    "See a whole season of the new Knight Rider anytime you want"

  5. "See a whole season of the new Knight Rider anytime you want"

    I mean, where else can I see "Three Amigos" and "American Psycho 2" with commercial interruptions?

  6. Youtube already has deals with major corporations, that's why they still have all those music videos, right?

  7. Very eye-opening. One thing though, while Hulu did make more money, Youtube had (to use an "old media" term) better ratings.

    From the same article:

    Amel estimates that while Hulu attracts far fewer visitors per month than YouTube (8.5 million versus 89.5 million), in financial terms Hulu is actually doing better.

    Maybe this is advertising not yet totally embracing new media and still having faith in the old media.

  8. Anonymous12:56 AM

    Yeah, "major corporations" - maybe.

  9. I love the argument this piece has set.

    If you're comparing Hulu to YouTube, you already don't get it.


    "The Washington Post Company, which owns [Newsweek], says that it is losing money on it."

    One business model is that the company offers extra features on a premium service. Fewer ads, get to see shows before everyone else, better search engines...

    So, is Hulu the new iTunes?

  11. Anonymous4:12 AM

    "If you're comparing Hulu to YouTube, you already don't get it."

    While I understand your statement, YouTube has set a precedent that a services like Hulu will have to integrate into it's format in order to stay on top of things. I mean, already does it with the Heroes Fan Recaps.

  12. Is it just me or is youtube taking lots of content down?