It’s beginning to look an awful lot like major music labels, that are fed up with poor ad revenues from Google’s YouTube, are going to look to Hulu in search of bigger and better opportunities.
The four major labels, Universal MG, EMI, Warner and Sony BMG are reportedly in talks to port their content to a new site. These talks initially involved the idea of their own web site, but instead they’re not looking to creating a non-exclusive partnership with a preexisting media outlet, such as Hulu.
According to the Financial Times’ Andrew Edgecliffe-Johnson, “Plans under discussion include: a partnership with Hulu, the online television and film joint venture between News Corp and NBC Universal; the creation of a premium service on YouTube, Google’s video sharing site; or, a standalone venture between some or all of the four largest recorded music groups.”
YouTube, Google's $1.65 billion acquisition, leads the online video pack with 83 million viewers in U.S. That puts the video sharing site well ahead of Hulu, at least in terms of viewers, who compares with 6 million viewers, according to market researcher Nielsen. But when it comes to advertising revenue, the playing field is much more level.
Arash Amel, an analyst at digital media research group Screen Digest, suggests that Hulu's advertising revenue is growing much more rapidly than YouTube. By his own forecasts, Amel estimates YouTube will generate about $100 million by the end of 2008, whereas Hulu won't be too far behind at an estimated $70 million. The two are expected to be dead even next year, with both companies generating about $180 million in the U.S.
"YouTube is in a very tough place right now," said Mr Amel. "Most of that user-generated content is worthless or illegal. The next 18 months will determine whether or not it was just an expensive mistake for Google."
Whether or not YouTube can retain its lead remains to be seen. Matthew Liu, a YouTube advertising product manager, notes that the site isn't where it should, but the question is, what can it do about it?
As it turns out, YouTube’s recent addition of their theater mode will be used for not only longer high-def videos, but full-length feature films as well. One of Hollywood’s biggest (and still unnamed) movie studios could be adding content to the site as early as next month.
Google has been in talks with major film companies for months about launching ad-supported movies on YouTube, and two unnamed executives stated that the deal wouldn’t be sealed immediately, “But it's going to happen. I would say you can expect to see it, if all goes well, sometime within the next 30 to 90 days.”
Currently Hulu is the leader in online hi-def video and YouTube is hoping to take a shot at the throne. Hulu has found an honorable halfway point between ads and content, but it remains unclear that YouTube will be able to replicate that. Google has yet to disclose any specifics, but a spokeswoman commented, “We are in negotiations with a variety of entertainment companies. Our goal is to offer maximum choice for our users, partners, and advertisers.” While blanket statements are fun, they leave much to be desired.
I suppose, with most deals like this one, we’ll have to wait and see what happens.
Long the king of entertainment for the attention-deficit, YouTube is finally hosting full-length episodes of TV shows. Taking a cue from Hulu, Google will be offering the videos with the new theater view mode, “dimming the lights” on the rest of the page and adding a superfluous red curtain on either side of the video playback.
Also like Hulu, the full-length episodes will include ads before, after, and during the episodes. On their blog, YouTube explains: “As we test this new format, we also want to ensure that our partners have more options when it comes to advertising on their full-length TV shows. You may see in-stream video ads (including pre-, mid- and post-rolls) embedded in some of these episodes; this advertising format will only appear on premium content where you are most comfortable seeing such ads.”
So far, the site is offering a handful of episodes of Star Trek, MacGyver, Beverly Hills 90210 and The Young and the Restless, with the promise of more to come.
What do you think? Is YouTube going to be successful in the video on-demand market? Is it going to take more than low-res MacGyver to get you to tune in? Let us know after the break.
Yesterday Google unveiled YouTube’s brand new theater view and dimming function, both dead ringers for the prospect of HD video. With the new theater view, users will be able to watch videos in a widened, dimmed format that will make whatever video they’re watching the main focus of the screen, much like Hulu’s “lower lights” feature.
Theater view provides a nice break from YouTube’s plethora of ads and “what you should watch” next suggestion boxes, all without making the video fit the screen and turn what was a watchable video into a pixilated mass.
The theater view provided by YouTube currently fills the extra space on the sides of the video with red curtains. Given the HD prospect of the theater view, there’s a good chance that this will be used to make room for 16:9 videos. And if that’s not enough for you, last week YouTube’s upload limit was changed to 1GB, convinced?
Now, we just need Tay Zonday to make a HD version of Chocolate Rain, and this will really catch on.
NBC has lost many battles over the past few years, but it looks as though it might actually win the war over its copy protected media. Executives from the company claim to have found a “template” for protecting their videos from piracy, and it appears as though it’s actually working. You may have noticed lately that copy protected content from NBC and others have been slowly drying up from video swapping sites like YouTube, Dailymotion, Veoh and even Soapbox. And as a result, NBC has been very vocal about the fact that it is generally satisfied with the new systems these services have put in place. As proof NBC cites its recent successes in controlling content from the both the Olympic Games and select Saturday Night Live clips. Clearly NBC views YouTube and other similar services as the primary battleground in protecting their content and attributes a large percentage of online video piracy to being committed out of convenience. According to Rick Cotton NBC’s general council; "What has happened up to now is the ability to access and download infringing content has been trivially simple, and the lesson it teaches people is that if it's that easy it can't be wrong,". NBC however seems to recognize that it needs to find alternatives to these services or risk pushing users to harder forms of piracy such as Bit Torrent. Arguably its full length episodes at both nbc.com and hulu.com do just that. Only time will tell if NBC’s main beef was truly over controlling its content, or simply locking it down to traditional distribution models.
Does the end of copy protected media on sites like YouTube put the death nail in user submitted video? Hit the jump and let us know what you think.
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.