Mark Cuban: Hulu kicking YouTube’s ass
Mark Cuban, one who always loves to throw a curve ball into the conventional wisdom gulfstream, says that Hulu is kicking YouTube’s ass.
Not in terms of visitors or video views, though. Cuban is more concerned with where things really count – making money and the potential to make even more.
The rationale, in short, is that Hulu doesn’t have to concern itself with those pesky user-uploaded videos that helped to propel YouTube to fame and fortune but that do very little to drive the bottom line. Therefore, while Hulu can put ads in front of every single one of its videos, YouTube is only in a position to monetize the relatively small percentage of its videos in which it has a partnership with the content creators. Cuban concludes:
The Prediction: That by next year, not only will Hulu have more monetizable traffic than Youtube, but it will have more total revenues than Youtube as well. It wouldn’t suprise me if they are already at a higher annual run rate than Youtube.
All of which puts Youtube in a VERY BAD spot. Because Hulu can monetize 100pct of their growing traffic, they should be in a position to pay for the best content available. Not a lot of money, but even with the tiniest of guaranteed payments to producers, they will not only attract better content than Youtube, but they will also increase the cost to Youtube for the content they want most to license. Furthermore, because Hulu knows exactly what they have on the site and can sell 100pct of it, their professional sales force will be in a better position to package and sell bigger and more profitable ad solutions.
To take a step back, Hulu is also in a strong position because:
* It has strong content partnerships - Hulu is a place that is becoming known for its quality media properties on the web. For example, you can probably find popular animated show Family Guy a bunch of places on the web (including illegal bit torrent sites), but on Hulu you can pretty easily find full episodes.
* It gained traction early - Because of its strong content and, to a lesser extent, its clean UI and design, it gained the early buzz that is helping it to grow. And certainly a strong PR and marketing push was and is fundamental as well.
* It has the potential to make money - As Cuban has pointed out, all of Hulu’s videos are readymade to serve ads. He goes on to write: “Hulu is a media site that presents videos with advertising. It can do whatever it wants. Youtube is a hosting service.”
Finally, I wrote back in March that Hulu is probably not the future of the television. I still stand by that opinion as we see that what Hulu is doing is creating a strong, traditional online media property.
Whether or not it becomes the long heralded “YouTube killer” remains to be seen, but it’s certainly in a strong position.
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