Which online video hub merits a higher valuation?

I like Jas' original suggestions..."hub." I just wanted to make sure everyone else was okay with it. Going up!

I'll go with hub.

I think "hub" is a good word... that's essentially what both are...

online video platform?

Last call! Everyone okay with "online video hub?"

 Hulu definatly has set teh standred for on-line streaming of video. The site is easy to use, Their offering of content is varied ranging from many new shows, to even more classic shows. As has already been noted the picture quality excedds anything on the net, of course it depends on the speed of your connection.

 The ad revenue is paying off because they are not force feeding a huge number of ads in every show they stream. As long they continue to keep the ads well spaced and short, they should do very well. What they need to to now is keep adding new shows and working deals to add outside content..

LAWSONREPORT.INFO

i am down for this one. Hulu vs. Youtube. Valuation. same as the facebook/myspace debate. lets do it

@brianr - that's a good question. I don't know what my answer would be - Hulu's ad platform is dominant right now -it'll catch YouTube in revenue by 2009 even though it gets 1/15th the traffic.

Then again, for YouTube, it's a matter of monetization. If they monetize, then they could dominate. But they haven't yet and momentum is clearly in Hulu's favor right now.

I'm leaning towards the valuation way.,

and valuation is very relevant to these two...some PE shop tried to buy 10% of Hulu for $100 million (implying $1 billion valuation), and Google bought Youtube for $1.5 billion or so. Clearly the markets think these two are close. How close?, nobody truly knows.

Market share is fine but we would have to define the market. it seems to me they fundamentally sell different products so its hard to have a marketshare debate. for example, i watch Hulu for network videos and Youtube for people-making-idiots-out-of-themselves videos. My consumption of one company's product doesnt come at the expense of the other.

yeah the valuation changes every day. googles IPO (essentially public acquisition) valuation was $23 billion and is now around $95 billion. every time someone makes a trade of google stock, its valuation changes slightly, so even though YouTube has been bought for $1.5 billion or wahtever, that doesnt mean its worth exactly that amount now.

You're probably right, but is it fair to stack these two up against each other right now in terms of valuation? Maybe it is, but the idea was to ask whether Hulu would basically catch up with YouTube, like when we asked whether or not Firefox would overtake IE in market share here.

YouTube has already been acquired ($1.5 billion or so) and Hulu is a partnership with a bunch of publically-traded media conglomerates.

though I guess we did the same thing and MySpace was already owned by News Corp.

Why not go with the Facebook/Myspace issue model:

Which online video hub merits a higher valuation?

YouTube

Hulu

Valuation ultimately includes all of these factors (market share, traffic, revenue, profitability). Valuation essentially asks which will be more "successful" in the most simple way. Revenue means nothing if costs are high, traffic doesnt mean much if you cant monitize, market share isnt that relevant because they arent really in the same market, and profitability is more of a margin concept (% of rev that are expenses) than an absolute concept.

We're talking revenue, not traffic. Market share works fine.

me too. let's just be sure that in the final wording, it's made clear that we're specifying monetization over traffic

me too. let's just be sure that in the final wording, it's made clear that we're specifying monetization over traffic

Isn't  the bottom line the measure of success in business?  I'd go with revenue over traffic.

are we defining this issue in terms of sales revenue or traffic? Market share isn't the right word to use.

In a sign of just how little success Google has had at monetizing YouTube, a research firm is predicting that Hulu will surpass it in US revenue next year.

Screen Digest estimates that YouTube will make $100 million in US revenue this year compared to Hulu's $70 million. Next year, the firm estimates, both will make about $180 million. (See article in FT)

Before moving on, it's worth noting that Screen Digest is presumably talking about gross revenue. Hulu passes a far larger percentage of revenue through to its content providers (70%-80%) than YouTube does, so with $70 million of gross revenue, Hulu's net revenue would be a paltry $14-$21 million. YouTube also shares some revenue with some content providers, but a far smaller percentage, which is why News Corp and NBC built Hulu in the first place.

[Alley Insider]

Yea, I think it's more reasonable to debate market share. After all, Hulu is owned by News Corp and NBC and they aren't looking to directly compete with YouTube, which is a more user-generated model that focuses on shorter clips.

I feel as though Brian's suggestion might be more focused on the real "sizeability" (??) debate... and I only say that because there's a major difference between YouTube and Hulu [users cannot post original content to Hulu]. It's simply an online video distribution outlet for corporations / studios.

Also, there's...

Will Hulu surpass YouTube in online video market share?

marinaz has the right idea - 'monetization' is the keyword here.

wired - Hulu is Catching Up With YouTube — Fast

YouTube had 83 million unique viewers in September, compared to Hulu's relatively tame 6 million. But Hulu's revenues are rising fast, and set to reach YouTube's surprisingly quickly, according to the Financial Times:

 

Neither company breaks out its advertising revenues but Arash Amel, analyst at Screen Digest, forecasts that in 2008 YouTube will generate about $100m in the US, compared with about $70m at Hulu. Next year both sites will generate about $180m in the US, he says. YouTube currently earns around half of its revenues in the US, while Hulu has not yet launched internationally

Which video hub will be more profitable?

 

Hulu

YouTube

Then is there perhaps another way for Hulu to be measured against Youtube? Will Hulu garner as many viewers as Youtube? Make as much money?

I don't think that "success" can be measured.

marinaz, good issue...Mark Cuban just weighed in on the issue in a recent blog post

Hulu has one HUGE advantage over Youtube, it has the right to sell advertising in and around every single video on its site. It can package and sell any way that might make its customers happy. Youtube on the other hand, has that right for only the small percentage of the videos on its site that it has a licensing deal with. For probably 99pct or more of the videos on the site, Youtube isn't supposed to know what they even are.

Having used hulu to watch old shows while where I couldn't get traditional tv or media I found it very good. The picture quality was much better then I'd seen elsewhere, and the short 30 second ads were torable considering I was getting to watch a show without tons of ads and it was where I and when I want it.

 I have even piped it in from the laptp to a tv and watched shows, while its not the best, it watchable, and Over all I was impressd with it.

I hope that it dose become sussussful, however with the cavait that, NBC dosen't start adding DRM into the mix , or trying to ad a gimick to ad a revenue stream from the material, granted they may own the material, that materials has already been paid for and has made  them millions of dollars, they can do more for their image and good will with the public by keeping it free and adding to the content.

Or maybe we should simplify and just ask, "Will Hulu be successful?"

NYTimes

Hulu is the new-media creation of two old-media rivals, NBC, which is owned by General Electric, and Fox, owned by the News Corporation. Since March, when the broadcasters announced their joint effort to bring free, ad-supported television shows to the Web, critics have pounced, predicting the venture would be doomed by diverging agendas, technical challenges and an all-powerful enemy: YouTube.

.... “You will not find this lineup from top to bottom anywhere else,” said Jason Kilar, 36, chief executive of Hulu and a nine-year veteran of Amazon.com.

“I think there’s a snarky desire to say this is big dumb media and this is a big dumb joint venture,” said Peter Chernin, president of the News Corporation. ... “If there is a product that’s attractive to consumers, we’ll be just fine,” he said.

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