Hulu to Outdo YouTube in Advertising Revenue?

According to an article in the Financial Times, which cites digital media research group Screen Digest, Hulu could out do Google’s own video sharing site, YouTube by next year.

The Financial Times reports that while YouTube is by far the most popular online video site, with 83 million unique viewers in the U.S. in September, compared to Hulu’s 6 million, Hulu’s advertising revenues are growing more quickly.

While both sites now offer streaming of professional content in one way, shape or form, the major difference between Hulu and YouTube is that the former only deals with professional content. Hulu offers free, ad-supported streaming video of TV shows and movies from various different networks and studios including NBC and FOX and although Hulu videos are currently offered only to users in the United States, it seems analysts are keeping an eye on Hulu.

Sure, YouTube is popular with pretty much everyone, but advertising revenue growth is slowing. YouTube has been trying a couple of different ways to jack it up, among them is showing full length episodes of TV shows with embedded ads.

Arash Amel, analyst at Screen Digest, spoke to FT and forecast that in 2008, YouTube will generate about $100 million in the U.S., compared with about $70 million at Hulu. Amel said that next year, the companies will be neck and neck with ad revenue earned in the U.S. YouTube currently earns around half of its revenues in the U.S., and as previously mentioned, Hulu is not available to users outside the U.S. at all.

“YouTube is in a very tough place right now,” Mr. Amel told the Financial Times. “Most of that user-generated content is worthless or illegal. The next 18 months will determine whether or not it was just an expensive mistake for Google,” he said.

Read the full story on the Financial Times

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