Video - actively converging

Hulu and YouTube represent terrific and timely examples of the difference between converging and not converging.

YouTube started out purely focused on the user. This is great for them / us. We can put on funny, if not inane, material, share guitar riffs, and see some amazing car racing . We get to see videos from around the world that we would not be able to see otherwise. It gives us something to talk about off-line as well. However, it is not a sustainable model as it exist. Google is attempting to monetize the traffic to YouTube and, though not transparent, indications are that revenue may not be out-pacing cost.

Hulu, headed by Jason Kilar, recognized that successful ideas are multi-facetted. When launching Hulu, he and his team identified three constituents: Users, Content Providers and Advertisers. Focussing too much on one to the detriment of the others puts the entire operation at risk. This is a tough path to follow, but he is doing it.

The difference between the two is simple; not only in content, which is quite obvious, but more importantly, the attitude during the initial concept development. Like too many online start ups, YouTube began without looking at the whole landscape. When Chen, Hurley and Karim started YouTube in 2005, it was focused on allowing users to share their videos. In a world where VC was pouring in, long-term financial sustainability was not built in. This is not to say that it was not considered, but the experience itself was built around its absence. It was created with the notion that everyone wants their content up and advertisers were not welcome. In short, YouTube only considered a small segment of a very large group of constituents. Now, with a lot of traffic, monetization and quality content is an after thought. They are now attempting to force ads into the experience that had been ads-free.

Hulu recognized from beginning that long term sustainability depends on a realistic view of "life after launch." By building in respect for content, and the rights of the content owner, as well as consideration for advertisers, Jason set the stage for a viable model. True, given the parentage of the company, content providers could not possibly be forgotten. But, considering the way it is working out, this is actually a good thing.

Internet "purest" would argue that the end users should be the only consideration. This holdover from the early days of the web has proven untenable; it collides with economic realities. Colliding can be good, but not in this case. Hulu chose to Converge the interest of multiple constituencies based on a realistic assessment of the landscape before them. It works.