Mark Cuban: Hulu revenues will surpass YouTube's in 2009

Mark Cuban sounds almost giddy in a blog about Google CEO Eric Schmidt's acknowledgment that the company hasn't figured out how to make YouTube profitable.

Cuban, the founder of Broadcast.com and owner of high-def cable channel HDNet all but said "I told you so."

"It is coming up on two years (since I posted) my declaration that only a moron would buy YouTube," Cuban wrote, "and that Google was crazy for actually going through with it...YouTube has become the poster child for the old saying "we are losing money on every sale, but we will make it up in volume."

Cuban, a copyright owner and YouTube critic, brings his own baggage to the YouTube debate. But what's interesting about his post is that he traces YouTube's trouble to Hulu, the video portal from NBC Universal and News Corp.

While conceding that YouTube has a vastly bigger audience, Cuban argues that Hulu is "stomping" YouTube in two important metrics: revenue per video and revenue per user.

"Hulu has one huge advantage over YouTube," Cuban wrote. "It has the right to sell advertising in and around every single video on its site. It can package and sell any way that might make its customers happy. YouTube on the other hand, has that right for only the small percentage of the videos on its site (where) it has a licensing deal."

Cuban predicted that by next year, Hulu will outpace YouTube in total revenues.

How much revenue does Hulu have to generate to do that?

A report from Bear Stearns estimates that YouTube will see $90 million in revenues this year. Om Malik over at GigaOm says YouTube sales will come in closer to $125 million, according to his unidentified sources. Last year, YouTube made around $80 million, Malik wrote. That means, according to Malik's sources, YouTube revenues grew about 50 percent.

For the sake of argument, say Malik's sources are right and the company will see $125 million this year and grow 50 percent again in 2009. In such a scenario, Hulu would have to book somewhere around $200 million in its second full year in business for Cuban to be right.

Hulu hasn't released any hard financial data but that's still a lot of money for a company that will only be in its second full year of operation.

I wonder where Apple, Netflix, cable companies, and all the other competitors offering video entertainment, fit into Cuban's calculations.

[Zen-Masta]

Hulu is the BOMB. Seriously, a legitimate site that lets you watch whole movies or tv episodes? Plus lots of the illegitimate sites link to it rather than hosting the videos themselves. All I have to say is, keep up the good work. Certain popup blockers disable the advertisements on hulu. I don't mind advertisements sometimes, what really ticks me off though is volume irregularity. I'd consider turning the ads back on if they promised to not to spike the sound on ads. Whenever I watch live tv (rare these days) I mute commercials.

[cidman2001]

I agree 100%...Do we as consumers have to train a whole new generation of media that we don't want our commercials screaming at us three times louder than the program? What a pain in the ass...

[someguy999]

I don't like Cuban based on his basketball antics... but hulu is the bomb... and I can't wait for the day where Cuban is in the position where Google comes knocking on his door!

[jabailo]

I love Hulu and YouTube but I'm also a netflix subscriber. People are crying out for quality content delivered in streaming, which could take over broadcast and cable easily. With my Clearwire Wimax connection I don't need any wires whatsoever and I can take my video mobile.

[bluemountain]

He is an idiot. Youtube will be doing the same and they will make more revenue also. Hulu is lucky because the media is giving all the shows to them. They could have done the same with Youtube and distribute their videos in multiple platform. Ask him to go manage the Dallas Mavericks first.

[unknown unknown]

Cuban is clueless, he is the guy that said "hyper linking without permission is theft" and he also went on a whole diatribe in his blog on why the internet access should be tiered, throttled, and metered because of bandwidth hogs, ie the people using Youtube, Hulu, Netflix streaming service, and P2P etc. He went so far as to suggest heavy users should cut off or charged by the bit. His is for Hulu, but at the same time wants to limit it's appeal by taking us back to the early days of the internet. Hulu has an HD section, I wonder how he'll about bandwidth hogs if that takes off.

Cuban's position is no doubt the product of his hatred for Youtube.

Personally, I am not a TV watcher and don't really have any desire to use Hulu.

[unknown unknown]

Cuban is clueless, he is the guy that said "hyper linking without permission is theft" and he also went on a whole diatribe in his blog on why the internet access should be tiered, throttled, and metered because of bandwidth hogs, ie the people using Youtube, Hulu, Netflix streaming service, and P2P etc. He went so far as to suggest heavy users should cut off or charged by the bit. His is for Hulu, but at the same time wants to limit it's appeal by taking us back to the early days of the internet. Hulu has an HD section, I wonder how he'll about bandwidth hogs if that takes off.

Cuban's position is no doubt the product of his hatred for Youtube.

Personally, I am not a TV watcher and don't really have any desire to use Hulu.

[jeverettk]

Hey, try and shift out of autotroll.

[kgsbca]

buying youtube may very well be proven to be as stupid of an idea as buying broadcast.com, except that the youtube founders haven't gone and bought any NBA teams.

Hulu shouldn't be compared with youtube - it shows only studio-created content, while youtube obviously is a public video bulletin board. it's a much more finite catalog, and is easier to market advertising. That doesn't mean there is no place for youtube. It seems to be a great public service, often providing attention for issues that the media ignores.

[gerrrg]

Correction...Hulu is not the bomb...it's DA BOMB! BUT...Youtube is where everyone shares their stuff, including the "Dramatic Moment" and all those redubbed "The Downfall". C'mon now, how are we going to live without seeing (apology to Adult Swim) li'l Hitler?

[jackdaniels08]

YouTube doesn't do pre-roll or post roll advertisement. If they were to do that to even a small percentage of their videos, it would easily make way more revenue than Hulu in the coming years. YouTube is more of a social web site, a media expression of a social psychographic landscape of media and their melding with a social group. The comments on YouTube are as important as the video content. The real expression is the mix of the two. Hulu which I also like, is really just watching TV on the internet, YouTube is a platform for social media expression, a social platform that I see morphing more into the direction of a social website like a MySpace although at a different starting point, but in the next couple years will blur the definition of how we see YouTube. Cuban is old media. He's an old guy, an old man with old traditional thinking. He is irrelevant to current and future trends. It is a matter of time before YouTube finds new and unexpected ways of producing significant advances in revenue to YouTube.

[jeverettk]

Problem: Public uploading and long term format - while YouTube is experimenting with long format video, they're still largely ineffective at blocking uploads of copyrighted work. Short form was at least a speed bump on that road. If YouTube wants to compete with Hulu for high quality content, they'll have to go long. However if they do, they'll be paying out big on copyright suits LONG before they see the revenues to offset.

[jackdaniels08]

YouTube doesn't do pre-roll or post roll advertisement. If they were to do that to even a small percentage of their videos, it would easily make way more revenue than Hulu in the coming years. YouTube is more of a social web site, a media expression of a social psychographic landscape of media and their melding with a social group. The comments on YouTube are as important as the video content. The real expression is the mix of the two. Hulu which I also like, is really just watching TV on the internet, YouTube is a platform for social media expression, a social platform that I see morphing more into the direction of a social website like a MySpace although at a different starting point, but in the next couple years will blur the definition of how we see YouTube. Cuban is old media. He's an old guy, an old man with old traditional thinking. He is irrelevant to current and future trends. It is a matter of time before YouTube finds new and unexpected ways of producing significant advances in revenue to YouTube.

[riverrun2000]

Hulu is U.S. based, so they have limitations on growth. What about a person who wants content on a non-Hulu network, like ABC or CBS? Neutral site networks, like OVGuide and Veoh, appear to have a more scalable business model.

[celticbrewer]

Apples and Oranges. Besides, YouTube can easily ramp up advertising and rake in a ton of money if they wanted to. If they have the traffic (and they do), they can make the money. Hell, I surf the web all day at work, and I'm not even familiar with Hulu. I'm sure most average people don't know it, either- but they know YouTube.

[siberianmetal]

It's just silly to compare a "TV - movies" site to a "broadcast yourself" site. I guess Cuban felt like he needed to say something outrageous to try to get publicity so he can bump up his revenue to a sustainable level.

[open-mind]

I like both Hulu and YouTube, but if I had to choose only one to watch, it would be YouTube. That's simply because the YouTube content choices are endless and changing, and about as entertaining (IMHO) as most of the content on Hulu. If Google wanted to make more money, seems they could start by charging a fee to host and watch higher-res YouTube content. Or maybe you could access the higher res content for free, but with commercials.

[truth_andrew]

I still don't get why he hired Rick Carlisle to be our head coach, that was a crazy signing. We needed a much more offensive minded coach, and personally, I think we should have made an insane offer to D'antoni that he couldn't have resisted. Unfortunately, it's too late as he's with the Knicks (lol, New York) and we're stuck with Carlisle.

At least Avery is gone, that is some major good news.

[HHaller2]

Seriously...just let me watch Hulu on my PS3 and I'll be happy.

[TOKiBiz]

Hulu.com makes $25 Million in revenues per year on just 821,899 monthly visitors, according to Compete.com. If you compute these estimates (without costs) into the Bizak Calculator you get an EPV of $2.53 and a Bizak Estimate of $99,999,984. This Hulu.com EPV (excluding costs) is comparable to YouTube?s $0.12 EPV. Lets factor in costs since they too host video which is costly. We?ll error on the high end and estimate that it costs Hulu $1 Million a month ($12 Million/Year) to host their videos. Even with these costs Hulu does a better job monetizing their platform with an EPV of $1.32 compared to YouTube?s $0.06 EPV.

[geo11101]

Eric Schmidt is the biggest Mafia puppet in the US. He is bad news for apple users. http://endmafia.com