Celebrity tech billionaire Mark Cuban has an intriguing blog post, in which he swears that yes, Google will rue the day they ever bought YouTube for $1.65 billion. Exhibit A: Hulu, the rival free video site that, he promises, will easily make more money than YouTube for nowhere near the headaches brought by copyright lawsuits and other complications.
According to Cuban, Hulu is simply better positioned to make money off its videos because it enters into a licensing agreement with the producers beforehand. All Hulu videos will generate revenue from ads in or around the videos, because that's what they're there for. YouTube, on the other hand, is primarily a free video hosting site, which means that only a very small percentage of its videos will earn ad and licensing revenue. And because YouTube must police the site, administrators must contend with higher operating costs, to say nothing of the decidedly inconvenient $1 billion Viacom copyright infringement lawsuit currently winding through the courts. "There is no doubt that Hulu, if it doesn't already, will have more monetizable traffic and greater revenues than Youtube going forward," Cuban writes. "Which means that the more traffic Hulu generates, the more money it makes. The more traffic YouTube generates, the more money it loses."
Silicon Alley Insider notes that YouTube's leaders may already be reacting to Hulu; they're now offering certain independent video producers the opportunity to post longer films onto YouTube. While this may not boost viewership, you can only sell so many ads to run within or alongside a short clip, and YouTube may be angling for more lucrative ad deals to accompany the long-form movies. As Fortune reports, YT representatives are even trolling around the Los Angeles Film Festival, soliciting new long films for the site.