Is YouTube a Failure?

Often, clients ask me about viral videos. While it can be done, I try and tell clients that a video of my kids talking to each other, unprompted, has a better chance of going "viral" than a highly produced corporate attempt at a YouTube sensation. This leaves them puzzled, and it leads me to wonder:

Will YouTube be the surprise failure of the Google empire?

Let's think about this. Hulu was founded in late 2007. This year, it is set to tie youtubes revenues at 180 million. That's not because of massive Hulu viewer ship. It's because Hulu is built as an ad-friendly, corporate open medium that advertisers understand. Just go there! You'll see corporate sponsored clips about cooking, along with clips from your favorite NBC shows. It's a professional clean look, and it's one that advertisers can understand. Youtube is seen as having a mass audience, but with mostly silly, useless, and often illegal content. A great comparison is found here.

Last night marked the premiere of YouTube Live, which was live streamed from CDN Akmai, no doubt something that cost a pretty penny, and signified YouTubes stream to do it on their own. The event got 700,000 viewers, a number which will expand massively, since Youtube is not famous for it's live viewing, but for it's stupidity staying power...(we all have seen Charlie bit my finger more times than we'd like to admit-- and I'm sure we'll be clips of Youtube Live for months to come). I agree with this guy
that the event probably lost money-- but I don't think they expected to make money on the first one. I think the bigger question is-- can Youtube keep tinkering around with formulas in order to find advertising success?

My answer is sad, but my answer is, NO. Hulu got it right by setting themselves up as a "legalized" form of virality (Think Tina Fey as Sarah Palin going "viral" versus Chris Crocker). Now, any sign of a shift in that direction from YT will be seen as a stomping of user generated creativity. And their model of ads along the bottom of the Youtube box is simply not natural and distracting. So, this pessimist predicts it here:

Youtube is the surprise "fail whale" of google.