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

Hulu is making more money per user and video than YouTube, according to media mogul and YouTube critic.

Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
Greg Sandoval
2 min read

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.

Mark Cuban

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.