In a desperate attempt to bring back some Hulu viewership, Youtube has launched the
Screening Room. Basically, you can watch full films on YouTube. One shortcoming - they don't offer them in HD - only HQ.
Youtube's problem in doing this is that they're losing sight of their purpose. The site has always strongly focused around user-generated content. Of course, when a large portion of that content involves 14-year old girls talking about how much they love the Jonas Brothers and Taylor Swift, there's not much profit to be made. There is, however, payment to be made - each video must still be hosted on Youtube servers, which takes up space. If the video is ever watched, Youtube must pay for the bandwidth for it to be streamed to your computer. This, of course, is the reason why they do not offer full-lenght HD films on YouTube - "Supersize Me" already has 236,177 views. If 100,000 of those people had streamed the film in HD, (assuming that the Supersize Me HD Copy is roughly 1 GB), YouTube would have had to pay for 100,000 GB of streaming content.
Hulu, on the other hand, has always focused on corporate-generated content. That is to say, they've always showed real TV shows and movies. Youtube is trying to encroach on this area, but unfortunately, Hulu still does it better. Youtube's movies are mostly old - Hulu generally releases content the day of screening. Youtube is also clearly losing money on the screening room - unlike Hulu, which displays ads at intervals during a show, Youtube allows the entire program to be watched without uninterruption. This is great, of course, until you realize the cost to Youtube to even stream the show to your computer.
Youtube needs to figure out a way to monetize on its user-generated content. The little popups below the videos are a good start. I know that nobody likes to see ads, but it's simply a necessity for Youtube to stay alive. Hulu is doing great, simply because they offer content that people actually want to see, and they have ads that you can't block or dodge.
I'm happy to see Youtube providing a way to watch full-lenght movies, but I feel that they're trying to move into a niche that has already been filled.