Hulu draws level with YouTube ad revenue

LONDON - Upstart video site Hulu, is forecast to match YouTube in US advertising revenue next year, suggesting advertisers are hesitant to associate their brands with YouTube's seemingly endless amounts of user-generated content.

Hulu, founded in 2007 by News Corporation and NBC Universal as a rival to YouTube, streams free professional content, such as television shows 'The Office' and 'The Simpsons', as well as movies and clips, and is expected to rake in $180m (£121m) in advertising revenue next year.

That figure matches YouTube's forecast for 2009, even though YouTube continues to be the most popular video-sharing site among web users, drawing 83m unique US viewers in September, compared to Hulu's 6m.

The tallies suggest that advertisers prefer to associate their products with Hulu's professional content, which includes full length episodes, instead of YouTube's shorter, user-generated clips.

However, YouTube, which was purchased by Google in 2006 for $1.65bn, has made recent strides to include professional content on its site.

Last week, production studio Freemantle signed a partnership with YouTube to create four dedicated video channels. YouTube has also signed an agreement with US film studio MGM to host a back catalogue of television programmes and selected full-length films.

In a bid to lure advertisers, YouTube launched its Sponsored Video system, similar to Google's AdWords, where users can upload videos and bid on keywords, paying on a cost-per-click basis.

Further, YouTube also introduced its VideoID system, which helps media companies track infringed content on its website. Companies can choose to block the illegal videos, or track their popularity and share advertising revenues.

However, YouTube continues to come under fire from investors for not capitalising on its vast user base. It is forecast to earn $100m (£67m) in advertising revenue in the US this year, with an additional $100m coming from worldwide markets.

Hulu is forecast to draw $70m (£47m) in 2008 and is currently only available to US users.

Hulu was launched partly in response to rows about copyright infringement. Viacom is currently suing Google-owned YouTube for over $1bn (£517m) for "massive copyright infringement". Viacom claims that just under 160,000 unauthorised clips of shows such as 'The Daily Show' and 'South Park' have been made available for free through YouTube and have been viewed around 1.5bn times in total.

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