Hulu to Match YouTube’s Revenue: Ten Observations For The Future of Media

An analyst at Screen Digest estimates that in “2008 YouTube will generate about $100m in the US, compared to about $70m at Hulu. Next year both sites will generate about $180m in the US.” That’s very significant because YouTube had 83m unique viewers in the US in September, while Hulu only had 6m.

Here, in no particular order, are ten observations you could make from this data, which speak to the the future of media:

1. Professional content still has A LOT more value than “user-generated content.”
2. Legal content still has A LOT more value than illegal content.
3. Professional content produced for analogue media is worth pennies on the dollar when distributed in the web’s commoditizing content marketplace.
4. It probably costs a lot more than $180 million to produce the content on Hulu, which means that it’s not a standalone business.
5. Ads inserted into online video are about 1,000 times more annoying than TV ads (I say this having watched many shows on Hulu) — losing control of your content is not a web-native experience. This suppresses advertising value.
6. TV/Video will likely follow the path of music and newspapers in suffering a dramatic decline in content value on the web.
7. Video is probably not a panacea for newspapers trying to reinvent their businesses on the web.
8. Most analogue media businesses, when fully transitioned to the web, will likely bear little resemblance to the original businesses.
9. Google isn’t doing any better than anyone else at solving the content commoditization problem on the web.
10. Six years after Google perfected search advertising, there has been no innovation in online advertising that even comes close to the same scale.