Rumor: Universal to Launch a Hulu Rival


It looks like Hulu’s reign as the undisputed king of high quality online video is about to come to an end, as Universal Music Group is planning to launch a “Hulu-like” video portal. UMG’s project would offer professionally produced music videos from artists such as The Killers, Mariah Carey, Kanye West and Amy Winehouse as well as original programming.

Doug Morris, chairman and CEO of Universal is leading the charge for this new service, which has the potential to generate more revenue from music videos and offer artists a new and polished platform to show off their talents. Right now, YouTube is the leading site to view music videos online, since all four of the major labels (Warner Music Group, EMI, Sony BMG and Universal Music Group) have licensed content to the site.

The issues that still remain with YouTube are that they only see ad revenue from 3 percent of their videos, whereas Hulu is able to get ad revenue from 100 percent of their videos. This is because advertisers are more likely to put their advertising dollars into a brand that is well established, instead of user-generated content.

It should be mentioned that UMG will soon be talking with YouTube about renewing its licenses to display their content, since their current deal is up at the end of the year. However, we don't anticipate UMG pulling out of Youtube since they are reportedly happy with the promotional benefits provided to them by YouTube.

So who knows? Perhaps all of this is idle talk, or it is a legitimate venture in the works. Chances are good that we’ll find out more about this once the renewal talks have taken place.

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