Hulu Hoopla Hits YouTube

Sometime today, YouTube is expected to announce a new partnership with Metro-Goldwyn-Mayer Studios to post MGM's movies on the Web site. The deal will start slowly, with a small selection of movies and old TV series like American Gladiator. Will it really take off, and will Google finally find a way to make serious money on the site? The odds are already long. Consider this: In yesterday's New York Times, MGM Co-president Jim Packer already trashed his new partner, declaring its format unsuitable for posting more than a few long-form films and praising YouTube's most successful competitor. "I don't think that's the platform to have 30 or 40 movies up at once," he said. "I feel much more comfortable doing that on a site like Hulu."

Indeed, YouTube's latest foray into full-scale movie posting only underscores how thoroughly Hulu has outmaneuvered Google in recent months. YouTube's anyone-can-post format offers an unprecedented amount of video content, but advertisers have proven wary of posting ads next to amateurish and offensive films. In addition, even as companies like MGM and CBS have posted movies on YouTube, the site is simply too cluttered, and users have so much trouble navigating around that finding what films are available is next to impossible. Hulu, by contrast, ignored home movies or backyard fight videos and concentrated on assembling a staple of Hollywood films and the latest television shows, offering a clean, easily navigated catalogue for viewers to find what they want in short order. The Times reports that Hulu had 6.3 million viewers in September, and CNET reports that the site already generates as much ad revenue as YouTube.

In addition, Google will have to eat a lot of crow before it can convince Hollywood studios to partner with it. In YouTube's early years, the company blithely ignored complaints that users were posting clips of copyrighted movies, invoking the Digital Millennium Copyright Act and arguing that it was up to the studios themselves to hunt for their movie clips. This attitude provoked a $1 billion copyright-infringement lawsuit from Viacom. Now that Google is crawling back to the studios, entertainment industry executives, who are more interested in protecting their old business model than looking for new ones, will remember the high hat they got from the search giant.

In the end, YouTube's problems may boil down to this: It kinda sucks. As PC World's Brennon Slattery notes, YouTube may be the place to go for every amateur clip you'd ever like to see, but the quality of its streaming video just can't keep pace with Hulu, and viewers who want to see big-budget movies in all their glory won't rely on YouTube's no-frills feel.