Does YouTube Deserve To Be Playing In Hulu’s Court?

When I think about user-generated video content, the first place that I go to is YouTube. Where do you go? Isn’t that what the core competency of YouTube is to be? A holding place for video enthusiasists to publish their home videos, event coverage, and other stupid stuff they’ve filmed with their friends to post online for others to see and share in the entertainment? So why am I somewhat disturbed by the fact that YouTube is “invading” the online territory of Hulu when it should just stay out their way (and vice-versa)?

Out of all the user-generated video content competitors, I think of YouTube battling with Vimeo, Viddler and perhaps Google Video (but probably not). Really, there’s no real strong competitor to YouTube just like there’s no real competitor to Google in search or even the iPhone (although people will still claim that certain phones are “iPhone killers”). So what does YouTube have to fear by battling Hulu for their niche? Friendly competition spurred by capitalism? Nah, I think it’s because they missed out on what Hulu has and wants to go after it themselves. But this is the wrong course of action.

Now, I’ve been thinking to myself about what it says to criticize someone  – you know, how you’re not supposed to critcize someone’s problem without coming up with a solution, so I think I have an idea on what can happen. But let me delve deeper into what the issue is between this YouTube vs. Hulu “war” is all about…

Mashable reported last year about how YouTube’s parent company Google is interested in maximizing the advertising revenue. It seems that they were planning on running with longer videos to help maximize the revenues. I believe it would be something like how if you watch an episode of Law & Order on Hulu and it shows three 15-second commercials every 15-30 minutes. The Mashable article raised about the two main questions that I have about the deal: does it make sense and will it work? Here’s Mashable’s thoughts on it:

On does it make sense?

…the users are getting views from major television networks. The networks are looking to YouTube for viral promotion. They should collaborate.

Obviously television networks are eager to make more money and garner new fans, right? Having the opportunity to have exposure of your show on one of the largest video networks on the web today with millions of viewers with the potential for an exponential number of additional ones? No, you probably don’t want to pass it up.

On will it work?

There is no telling. The long-form video model may be a hit with small independent directors who are looking to make amateur or short films. But they won’t make any money from it without ad revenues.

I think the one issue here is that it works best for small independent directors, which Mashable states, because they probably didn’t pay much to produce it and are eager to get their shows out to the public without going through the major network bureacracy of promotion. However, getting well-established shows like Law & Order, CSI, The Tonight Show, and others on board to jump in? Probably a long shot because the networks may not have control over which advertisers are being promoted during the “advertising break”.

No matter what YouTube’s position on doing longer episodes of shows or whatever, it’s not one to prevent advertisers from wanting to market there. Why? Because it’s YouTube…the video darling that everyone wants to be a part of…like Facebook or Twitter. It’s owned by Google and everyone wants to be a part of the “hottest thing online today”.

But here’s where I think YouTube needs to leave Hulu alone.

This part here is where it gets good…I think. YouTube should already know that Hulu isn’t getting as many marketers as they wanted. BusinessWeek is even reporting it as such. So does YouTube need to worry about an influx of people running to Hulu to advertiser? Perhaps the key here is for YouTube to put together some sort of new advertising program?

Here’s the thing about YouTube and Hulu. For me, I see YouTube as primarily as a user-generated website. At best, the most professional thing you might see would be the Weekly Radio Address by President Barack Obama and maybe even a couple of other television shows – mostly political. But when I think about professional quality that’s worthy of being on TV, it’s all on Hulu. So why do I need to think about watching network quality videos on YouTube when it’s the “people’s video channel”? That’s absurd for them to mess with that. Instead, let’s work on trying to improve the user’s experience and also the advertiser’s offering. Yes, banner advertisements no longer work as well as text ads. But is there another way of displaying it so that they don’t appear obtrusive?

Okay, so you may also know that as part of YouTube’s drive to increase revenue, they are looking at creating a “subscription” channel for users to get access to longer episodes. Why?? Why would they do something where you need to pay to watch it. This is just impeding on Hulu’s market. In order for you to have something like that, you need to have the pull for exclusivity. Take this example: if NBC is interested in posting full-length videos of Law & Order on YouTube, in order for YouTube to show real promise, they need to offer something really special that NBC will bite on so they don’t also stream their episodes on Hulu or on NBC.com. Why is this a big thing? Because if the user finds out that they need to pay for something on YouTube but it’s also available on Hulu, then guess where they’re going? That’s right…Hulu. Free content or paid content? The choice is clear.

I like what Adam Ostrow, Editor in Chief at Mashable said about YouTube’s dive into premium movies:

My question about full-length movies – especially those that are ad-supported –is will anyone watch? The law of large numbers says that of course a few people will, but looking at the movie selection on Hulu or Joost – which contain nothing but professionally produced TV shows and films – it’s hardly like walking into Blockbuster (think TBS, but way worse).

YouTube has some real power behind it but for what I’ve seen with most Google “properties”, they’re main form of advertising is with text advertising. They need to change this first before moving to another system that would possibly and ultimately fail. There’s a different feeling behind looking at videos on YouTube and seeing professionally created shows on Hulu. One of these things doesn’t belong in the other. But let’s hope that YouTube proves me wrong and succeeds, or else it’s back to the ol’ drawing board for them…again.

By Ken Yeung

Ken Yeung is a journalist fascinated with the stories of the tech industry and internet culture. He's currently the Technology Editor at Flipboard, where he observes what's happening in the space while also identifying new topics of interest. In addition, he co-hosts the weekly internet show "The Created Economy," which focuses on what's happening to creators and influencers. Previously, he was a reporter for VentureBeat and The Next Web, covering tech startups, the industry's innovations and funding. Ken also has a newsletter you should also subscribe to called "Filed."