Hulu's on a roll!

Huge news for Hulu earlier this week with Disney now an equal co-owner along with News Corp. and NBC Universal. Now CBS is the glaring omission and the Disney news certainly provides a lot of momentum. With a lack of traction by CBS Interactive's TV.com, not to mention a non-intuitive way to search for full episode videos, it may not be long before they more seriously consider Hulu as the primary source for distributing full-length CBS shows. However, distribution deals with the rest of the CBS Audience Network (Yahoo!, MSN, AOL, Veoh, Joost, etc. would all have to be re-negotiated. As it stands, Hulu handles all syndication deals for News Corp. and NBC Universal.

comScore announced last week that Hulu broke into the top three video properties in March, continuing to ride the momentum built from advertising in the fourth quarter of the Super Bowl.

A Video Insider post cites estimated revenue of $120 million compared to $200 million for YouTube. However, they have very different infrastructure costs. Hulu pays out a lot to Akamai for high quality video experiences. YouTube has the ability to play video backs at a decent quality. The number of clips at YouTube is extremely high because videos don't play longer than 10 minutes. The net effect is 6X more minutes on YouTube than Hulu (incurring bandwidth costs) according to comScore Video Metrix data. So a key question in evaluating financial viability of these two video giants is the average compression and bandwidth rates per hour of video delivered for each site.

My bet is that for YouTube, the average bandwidth cost will surely increase in order to retain users. Consumers have many options for watching video these days. YouTube is well past days of free gritty video to draw users when there's also Metacafe, Daily Motion, Vimeo, Veoh.