My favourite billionaire sports-team-owning blogger, “Megaphone” Mark Cuban, had a blog post yesterday about how Hulu — the streaming video site from NBC — is “kicking YouTube’s ass,” a theory that has been getting some reaction from various places in the blogosphere today. The reason for the post would be fairly obvious to regular readers of Blog Maverick even if Mark didn’t point it out, but to give him credit, he has put it right there in the lede of his post:
“It is coming up on 2 years post my declaration that only a moron would buy Youtube and that Google was crazy for actually going through with it.”
In a nutshell, Mark argues that “the Youtube business model is broken, and there is no light at the end of the tunnel as they are currently constructed.” Why? Because they can’t sell ads, and never will be able to, and therefore YouTube “has become the poster child for the old saying ‘we are losing money on every sale, but we will make it up in volume’.” Meanwhile, he says, Hulu is selling pre-roll and post-roll and every-other-kind-of-roll ads on their clips at YouTube, which drive traffic to their site, on which they sell ads — and so on. RIP, YouTube.
I think Mark has a point as far as YouTube’s monetization goes — but it’s a very small point. Yes, YouTube may have difficulty selling as many pre-roll and post-roll and other kinds of ads as Hulu can, since Hulu has the kind of mainstream, TV-style content that advertisers love. At the same time, however, pre-roll and post-roll aren’t the only kinds of video monetization, especially when you’re Google. And YouTube looks to be branching out as well.
I also think that Ashkan Karbasfrooshan of WatchMojo has a point when he says that to some extent YouTube and Hulu are apples and oranges. In other words, they are kicking different asses, so to speak. People go to Hulu to watch episodes of House or The Sarah Connor Chronicles or whatever, and people go to YouTube to see the latest funny cat video or something equivalent — those are two very different needs, and both valuable. Terry Heaton makes a similiar point on his blog.