Techcrunch ask whether Hulu could be a bigger business than YouTube

TC have run a pretty poorly written (my thoughts anyway - sketchy data and assumptions - still it's better than reading about social media startups with no business model and 400m valuations) article about YouTube v Hulu over here - http://www.techcrunch.com/2008/09/01/can-hulu-be-a-bigger-business-than-youtube/

Interestingly, TC head honcho Michael Arrington used to call Hulu Clownco (which was allegedly Google's internal name for the service) repeatedly (http://www.techcrunch.com/2007/08/09/wow-clown-co-got-that-1-billion-valuation-still-nameless-though/) and was pretty dismissive of the concept; and the tech media absolutely flogged the concept when it launched, lambasting it as a flop and giving the NBC/Fox brainstrust advice on how to make it really work (example: http://www.readwriteweb.com/archives/hulu.php)

Now it seems the US tech media is embracing Hulu and maybe, just maybe, are open to the fact that a bunch of TV guys might actually have a more viable business with web video than YouTube. It will be interesting to watch TechCrunch cover Hulu over the next 12 months.

Can Hulu be more viable than YouTube? I don't know. Right now, absolutely ... Hulu in my opinion could command 10-20x the CPMs YouTube can - plus they can monetise all their inventory (YouTube can monetise approx 3-4% of theirs) PLUS they can (if done smartly) bundle Hulu placements in with TV buys (ie you buy 30 Rock via 7 for TV and also buy in on the online component at the same time via Hulu). However the biggest thing is trust, traditional brand advertisers trust what they know - and they know TV, TV shows and the production houses.

They're not quite sure on YouTube. Case in point - show a brand manager at nameless FMCG company or Movie distributor the most popular videos (http://au.youtube.com/browse?s=mp) and they will turn their nose up and ask to not be placed near that content.

In the future - who knows - never discount Google to come up with a game changing idea ... however they need to hurry up as they might lose the momentum they had and Hulu is focused on global expansion so the clock is ticking.

Hulu in Oz speaking with the locals

Paul McIntyre reports on the SMH that Hulu is in AU at the moment speaking with local broadcasters.

http://business.smh.com.au/business/networks-plot-online-video-assault-20080730-3ned.html?page=1

Interesting outtake - "the sticking point will be whether the US venture is prepared to enter a 50-50 equity venture with Australian broadcasters."

I'm unsure why Hulu would do this, given (and this is an assumption) US content is what will drive Hulu usage - and most of it is already owned by Fox or NBCU. I'd argue Hulu could enter the AU market without partnering with the local networks if they could structure their broadcast deals over here to allow this.

The AU FTA's could try and do their own video play like Hulu, but they'd be severely limited with the content they could place on there. Im not sure what the demand would be for reruns of Rove and Farmer Wants A Wife. The most compelling content would be ABC content - and thats already available en masse online through their site.

I, for one, would love to see Hulu come to AU. I think it's revolutionary.

Hulu: The numbers are out and they tell a great story

When I was in the US in April I fell in love with NBC and Fox's video sharing site, Hulu.

Hulu is great - it basically aggregates most of the TV content of NBC Universal and Fox (think Law & Order, SNL, American Idol, Family Guy, Simpsons, 24) - and allows what I think is the webs best example of TV on demand.

It's high quality (not HD) and the depth of content is impressive. If I want to watch the entire 3 seasons of Arrested Development - I can ... on demand. Pause/rewind/fast forward ... it's too easy.

In the States Hulu launched to much debate - many thought it wouldn't work - but the numbers are pretty strong and would have definitely inspired confidence in the NBC and News Ltd execs behind the concept.

Hulu is playing in a different space to YouTube - YouTube us UGC ... the US guys call it 'amateur video' ... Hulu is produced content - 'professional video' ... it's effectively TV programming taken online which gives users greater flexibility with how they view it. This works in their favour as the consensus seems to be that it will be easier to migrate brand dollars to professional video content rather than UGC video.

So the first bunch of Hulu data ...

2.43m unique users

26 streams per user (63,226,000 in total)

2 hours, 9 minutes spent per user on the site

2.43m isn't a massive number - but it's respectable to place Hulu in the Top 10 video sites. The real gold is in the 'engagement' metrics ... users are spending 2+ hours on the site a month ... compared to other TV offerings (ie ABC, CBS, NBC) this is excellent. Fox's website users spend about 20 mins on the site a month, whereas NBC's spend just over 90 minutes ... Hulu has beaten both of these.

That said - lets look at unique audience

NBC - 2.25m users streaming video

FOX - 4.04m users streaming video

Hulu is above NBC, but below FOX. ABC has 5.84m users streaming video ... the problem is they are only viewing 10 videos per month.

So Hulu has nailed 'sticky' ... now they just need to nail unique audience. I am pretty sure this will happen ... people talk and a service like Hulu definitely has that quality ... so you can be sure it already has vocal advocates spruiking its wares. Plus Hulu has some strong distribution deals which give it access to a wide variety of American eyeballs - through major networks and also niche players. Smart.

Now we just need it to come to AU. OR - one of the major networks to pull a Hulu and get their broadcast content online and on demand.

The Hulu strategy is basically if you give people what they want for free they probably won't want to steal it anymore. Seems to be working.