Los Angeles (CA) - Outspoken YouTube critic and billionaire Mark Cuban has announced in a recent blog post that "Hulu is kicking Youtube’s Ass" and he predicts Hulu’s total revenues will surpass YouTube’s by next year. The secret to Hulu’s success, according to Cuban, is its ability to monetize 100% of its content and that it can piggyback on YouTube by posting small clips of full shows for free.
Cuban calls this piggyback technique "The YouTube Arbitrage". Hulu posts clips on YouTube and these clips link back to Hulu’s full-length tv episodes, movies and other shows. Since Hulu isn’t charged for these postings, the company effectively leverages YouTube’s bandwidth in its favor. In essence, Hulu can grow itself while effectively trying to bankrupt Youtube. "We pay you nothing, and you send us traffic that generates ad revenue for us," said Cuban.
Another advantage in Hulu’s favor is that it can insert ads into every video because the company knows exactly what content it has. Cuban argues that YouTube probably doesn’t know what 99% of its content is and adds that YouTube only has licensing deals with a very small percentage of its videos.
"There is no doubt that Hulu, if it doesn’t already, will have more monetizable traffic and greater revenues than Youtube going forward," said Cuban.
Hulu.com is a joint venture between NBC Universal and News Corp. It has high-quality videos of full television episodes, movies and sports clips. Recently it added full episodes of The Daily Show and games from the NBA Playoffs and Finals.