YouTube Serving “Money-Making Patrician Class” While Hulu.com Boasts “Revenue”

by Nalts on December 10, 2008

It appears YouTube continues to extend benefits to its “Partners,” giving them a distinct advantage over   YouTube posters who haven’t qualified. The bar has been steadily lowering on what qualifies a “YouTube Partner” (a group the LA Times calls “the money-making patrician class.”

Almost anyone who posts regular videos with a decent audience can become a “Partner” as long as they aren’t violating copyright laws. This is, of course, in Google’s financial interest since it needs more advertising inventory perceived “safe” for advertisers — and that therefore commands a higher per-view (or per-click) revenue. Google is facing tough economic times, but faces threats from recent revenue-darling Hulu.com and other online-video entrants. Naturally the Hulu.com financial chest-beating is somewhat misleading (see PaidContent.com and Washington Post’s observations).

YouTube’s most recent benefit provided to partners exclusively is their ability to select their own thumbnail (while non partners will now “roll the dice” on a random choice. This isn’t trivial. Thumnails are the images that represent the video, and remain one of the most dramatic driver of views (beyond titles, creator and tags).

User-generated content, according to some, is dead. But my favorite piece on the YouTube vs. Hulu debate is by Mark Rizzn Hopkins (seen here on Mashable).

Let’s simplify this issue for the less informed. YouTube’s revenue is a rounding error for Google, and Hulu is a big bet for television networks moving to online video (what traditional media outlet isn’t looking to ramp up online revenue?). Hulu is likely overstating its actual earnings, but YouTube has a lot of room to boost revenue.

In every industry there are room for at least 2-3 major players. However online-video remains a virtual monopoly… YouTube does not have a close competitor in terms of total views or regular audience. It’s finding new ways to monetize its content, and it has the distinct advantage of a Google salesforce.

I like the idea of some pressure on YouTube by some additional competitors, but I’m amazed by how quickly journalists are willing to suggest the game is changing because Hulu had a good quarter.

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