In some ways, Hulu’s business model proves that premium content attracts premium advertisers. YouTube has been struggling with advertising models. Advertisers simply understand Hulu’s ad model. User created content may have built YouTube – but it’s not something premium advertisers feel comfortable with at this point.
To create interest amongst these premium advertisers, YouTube recently announced its plans to stream full legal movies through a partnership with MGM.
Premium content mixed with user generated content on YouTube may not appeal to advertisers. Hulu has a clean interface that premium content producers feel comfortable with. The television advertising model is a perfect fit for Hulu’s audience. On the other hand, YouTube’s visitors just don’t have the patience to sit through multiple ads on a movie or show.