The excitement as well as the confusion in the world of online video content sharing started in 2006, when a young website, YouTube, shot out of nowhere to become that year’s “next big thing”. Within months, YouTube sold itself to Google, the world’s largest internet firm. YouTube had risen so fast by making it easy to watch and share videos in any web browser, and by making it almost as easy to upload home-made videos to its site. Such “user-generated content” seemed to be the future.
In one sense this turned out to be correct. YouTube went on to dominate web video as measured by the number of videos that users watch (5600 m in Dec 2008 ).
Its social and even political importance is hard to overstate. From “Obama Girl” videos and tutorials about tying shoelaces or folding origami to Yoga and aerobics instruction, YouTube has changed lives. But there was a catch. Advertisers, by and large, will not touch user-generated content with a barge pole. Its quality is variable, to say the least; its content occasionally off-putting. No brand wants to be near it. And much of it is illegal—pirated from large media companies and uploaded by fans. Media giants, led by Viacom, were suing. So there was a threat of costs and no promise of revenues. YouTube is undoubtedly a phenomenon, but it is not a business.
So others showed up hoping to fill that gap, but the question was, did a need exists where a website could host user-generated content as well as professional videos. Does this website need to aggregate the content of many media companies or to be an outlet for just one?, question on consumers online behavior was also imminent, Would people prefer to download films or television shows to their computers, then transfer them to their iPods, as Apple was betting? Or would they prefer “streaming” a video just once? or would they insist on watching videos inside their web browsers? Would they pay to watch, or would advertising provide the revenues?
Almost every permutation has been tried. From Amazon to Apple, from Netflix to Joost, from ABC to CBS’s TV.com, companies old and young started serving videos over the internet.
Into this mess a with a new idea of “video sharing obtained from professional partners”, Hulu was born .
Today, even though advertising is destined for a depression, Hulu appears to have clarified much of the confusion. It is not clear how much revenue or profit Hulu is making, but it seems to be successful by any measure. Although Hulu is still far behind YouTube, in the number of hits, users have been flocking to it, watching 216m videos in December. Just as importantly, Hulu’s inventory for advertisers appears to be sold out. So Hulu is in the rare position of being able to increase inventory (through new content and more views) and make money from it. Hulu now has more than 100 advertisers, including big brands such as McDonald’s, Bank of America and Best Buy.
Hulu is not a “me too” brand, it does not copy YouTube in a sense that Hulu has only professional content, and not the contents uploaded by users, this is the fact that it has earned brownie points with the advertisers. Hulu currently offers content from more than 110 partners.
Hulu’s has achieved monetary success by supporting streamed video with advertising, rather than charging for downloads, Hulu’s ads are few and short, with a subtle countdown timer that makes them even more bearable. In some cases viewers can even choose which ad to watch, so it is more likely to be relevant to their interests.
It is too early to declare Hulu the winner, But for the moment it appears that YouTube proved that people would watch videos online—whereas Hulu is proving that advertisers will foot the bill.
Ref: The Economist
In one sense this turned out to be correct. YouTube went on to dominate web video as measured by the number of videos that users watch (5600 m in Dec 2008 ).
Its social and even political importance is hard to overstate. From “Obama Girl” videos and tutorials about tying shoelaces or folding origami to Yoga and aerobics instruction, YouTube has changed lives. But there was a catch. Advertisers, by and large, will not touch user-generated content with a barge pole. Its quality is variable, to say the least; its content occasionally off-putting. No brand wants to be near it. And much of it is illegal—pirated from large media companies and uploaded by fans. Media giants, led by Viacom, were suing. So there was a threat of costs and no promise of revenues. YouTube is undoubtedly a phenomenon, but it is not a business.
So others showed up hoping to fill that gap, but the question was, did a need exists where a website could host user-generated content as well as professional videos. Does this website need to aggregate the content of many media companies or to be an outlet for just one?, question on consumers online behavior was also imminent, Would people prefer to download films or television shows to their computers, then transfer them to their iPods, as Apple was betting? Or would they prefer “streaming” a video just once? or would they insist on watching videos inside their web browsers? Would they pay to watch, or would advertising provide the revenues?
Almost every permutation has been tried. From Amazon to Apple, from Netflix to Joost, from ABC to CBS’s TV.com, companies old and young started serving videos over the internet.
Into this mess a with a new idea of “video sharing obtained from professional partners”, Hulu was born .
Today, even though advertising is destined for a depression, Hulu appears to have clarified much of the confusion. It is not clear how much revenue or profit Hulu is making, but it seems to be successful by any measure. Although Hulu is still far behind YouTube, in the number of hits, users have been flocking to it, watching 216m videos in December. Just as importantly, Hulu’s inventory for advertisers appears to be sold out. So Hulu is in the rare position of being able to increase inventory (through new content and more views) and make money from it. Hulu now has more than 100 advertisers, including big brands such as McDonald’s, Bank of America and Best Buy.
Hulu is not a “me too” brand, it does not copy YouTube in a sense that Hulu has only professional content, and not the contents uploaded by users, this is the fact that it has earned brownie points with the advertisers. Hulu currently offers content from more than 110 partners.
Hulu’s has achieved monetary success by supporting streamed video with advertising, rather than charging for downloads, Hulu’s ads are few and short, with a subtle countdown timer that makes them even more bearable. In some cases viewers can even choose which ad to watch, so it is more likely to be relevant to their interests.
It is too early to declare Hulu the winner, But for the moment it appears that YouTube proved that people would watch videos online—whereas Hulu is proving that advertisers will foot the bill.
Ref: The Economist
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