Hulu already making more money than YouTube
mediamemo.allthingsd.com
mediamemo.allthingsd.com
This is Facebook's underlying problem. All the network effects in the world just aren't as valuable as Facebook would like you to believe when the site is nearly all broke college students wasting time.
Was it Mashable.com that did the study and found that almost every Facebook app was developed and marketed as a "just for fun" app?
I find more utility out of Twitter than I do Facebook; over the last year I've made four new friends on Twitter who live near me one of whom is about to let me rent a house from him. That's utility, and it's organic; I don't need some marketplace to look for someone to rent from. When you're capable of making connections just on location alone and let people do the work of becoming friends you've got something. And on that, Twitter beats out Facebook everytime.
Hackers have a distorted view of things, because almost all of us are used to seeing the "big picture" of the Internet. We don't realize that most people use one or two web sites at most, and that for some people, Facebook IS the Internet.
But, yeah, I wasn't trying to downplay Facebook, but only agreeing that I'm one of those people who would be a Facebooker in name only if it weren't for Twitter, from which I get much greater utility.
I could not disagree more. Facebook is rapidly replacing email, phone, and other channels as the method that many people use to keep up with friends and family. My parents and literally hundreds of their friends have started using it over the last six months and now use it aggressively. These people are definitely not early adopters or anything...most of them are conservative midwesterners in their 40s and 50s, and most of them are very active on a daily basis, using everything from status updates to photo uploads.
Facebook hasn't figured out how to monetize their userbase yet, but the social utility value is enormous.
Maybe I'm naive to this new wave of web based business, but how has Facebook managed to partner up with Microsoft, and all of these other ad providers and not raise a single dime?
It is a self-updating white pages, and college organizations use groups in place of their own websites and mailing lists to great effect. When I want to invite 20 people to a poker tournament, text messages or facebook are the way. These things are all valuable to me.
But that doesn't mean that advertising is the right revenue model. Getting those guys to come over and pay $10 to play poker is about all the money you will get out of my group of friends on any given friday night. $5 is often the buy in as we get deeper into the semester.
I really think start ups need to stop being so adverse to charging money. The freemium model works. I don't buy a damn thing from the advertisers on facebook, but I paid $25 for the Remember the Milk app for my iPod because it is so valuable to me.
Granted, a lot of those people aren't close friends or family members. Many of them are people that my parents knew decades ago and have lost touch with. I actually think that one of the most valuable things about Facebook (and twitter) is that it allows you to more effortlessly keep in touch with more people than 1-to-1 communication methods like email, phone, IM, etc.
And college students are a great demo to market to (they buy all sorts of things).
This is about Hulu coming out of the gates with ads, and having a big pile of salespeople who know how to sell ads for TV shows. The players involved all have existing relationships with entities who BUY video advertising... They have a fully-baked business model from stage 1.
Youtube is JUST starting to experiment with it (and trying to build a more innovative model than the existing "just toss in commercials" option.
In fact, eyeballs have never really equalled money. The ability to affect the things behind those eyeballs = money. Actually, the perception of businesses of the potential to affect the things behind those eyeballs = money.
Your right. Hulu hasn't really proven anything yet. They've proven that they can get ad buyers to buy online if presented with something similar enough to offline TV. You can build a reasonable business based on this model, apparently.
But it's true that Youtube hasn't proved anything yet business-wise.
Quality does count for something though. People will pay a higher CPM for 25-35 year old males than they will for 18-22.
American entrepreneurs should keep away from this market! THERE IS NO MONEY TO BE HAD HERE.
The U.S. has almost as much GDP as the entire EU, while having <40% of the population which, most importantly, means a lot more discretionary income.
I hope you didn't take my statements as jingoistic, it's just a well-known fact that U.S. users monetize much better than the rest of the world in general.
YouTube is based off of the unknown becoming known. Hulu knows how much storage it needs, and what's going to be the most popular. They can push the latest episode of the Office to CDNs knowing it will generate a lot of traffic. YouTube can only do that in reaction to content that becomes popular.
It's incredible that YouTube works as well as it does considering the number of unknowns they have to deal with. Hulu has a really easy job adding, say, 100 videos a week.
Isn't that automat{ed,able}?
FYI - I work in Digital TV in Digital Marketing, so this is all fairly common ground.
Like, because Hulu deals with a comparatively small set of videos that are uploaded by staff rather than end users, they don't need to build as much. If there is a workflow that must be followed to upload the videos, that's fine. It's a lot easier to develop for internal use than for end-users.
Likewise, with 100 videos a week Hulu could have one of their programmers manually deal with a lot of stuff that YouTube couldn't since having a person sort through or run a process on their millions of videos just isn't the same.
It's just an easier task. Yeah, clearly YouTube is possible, but it's hard. You have to store a lot more data, you don't have staff entering in nice meta-data and making sure they're aren't dupes, you don't have the option of telling a user, "encode this on your computer and then SFTP it to here", you have a ton more videos, you don't know what's popular.
It's a lot more software to write. It's what I find so impressive about YouTube. Hulu is nice, but it isn't that impressive. With the little amount of data they're storing it's easy to design databases and file storage systems that will accommodate that and there are challenges pushing that much data over a pipe as it's a popular site, but nothing like YouTube's challenges.
Look at it this way, YouTube has over 65,000 videos uploaded every single day! And that's from way back in 2006! YouTube has increased its presence since then. That's huge. Everything has to just work. Hulu gets what? 10 videos a day and they have several fulltime staff? Heck, they could do most things manually. Something is a little glitchy, they can just deal with it manually.
This is why live streaming video companies have such hard time monetizing... it's impossible for advertisers to approve of the content since no one knows what people will do while the feed is live.
Since Hulu has high-quality content, they can command premium prices for advertising and since they're funded/owned by big media companies, they even benefit from their ad sales teams.
Prediction: The next-gen gaming consoles will bring together TV and movie streaming services to put a ton of pressure on both the traditional rental market and cable companies. I could see Xbox 720 partnering with Hulu + Netflix streaming, PS4 hooking up with YouTube, and potentially Apple building a gaming platform + iTunes (or maybe partnering with Nintendo). Along with a convergence of tv, movies, and gaming, the platforms already have a social network component that will bring together social media experiences that will create new forms of entertainment that cable companies simply can't match. Just like home phones were a no-brainer necessity prior to cell phone ubiquity, so are the days numbered for big cable.
Users give you attention in exchange for a media product. You resell that attention to advertises for a profit.
Most technically minded folk, for whatever reason, only focus on the first half of the equation, which mostly boils down to product decisions, and when they focus on the second they come up with stuff like micro-targeting or Facebook Beacon.
Hulu isn't making more money than YouTube because the product is less risky, although that is true. They're also most making more money because they have a more lucrative audience, which is also true.
They're making more money because they have experience as a media company and know how to field a killer ad sales team. Don't under estimate soft power. :)
another thing to take note, is that youtube is adding a lot of older content (old tv shows) to their collection. they already have the younger audience, and now they are trying to capture the older audience. the people in the middle who go to hulu are in the 20-30 year old range. this is a smaller segment of the population that is already familiar with youtube, and therefore already recognize the brand. so, if youtube succeeds with capturing the mature audience (people with money), they are establishing a business that is far more leverage-able than hulu.
http://www.youtube.com/watch?v=FzRH3iTQPrk
How can I spend 12 hours a day on the internet and not have seen that? I was equally shocked when the whole benny lava craze passed me by.
I was thinking someone needs to make a Twitter/online TV Guide service. Like blip.fm sorta... maybe this is an idea worth working on? I have more ideas on it if interested...