YouTube could be heading for $1 billion in annual revenue as Google’s advertising efforts start paying off. Unfortunately, Google is facing a $1 billion lawsuit from Viacom over unauthorized clips on YouTube. The universe works in mysterious ways.

Google’s YouTube

Google acquired YouTube for a whopping $1.65 billion in October 2006, just 18 months after the domain name was registered. Google CEO Eric Schmidt has since stated he thinks the company paid way over the odds for the startup, but that it was a necessary purchase.

What Google got was a YouTube that’s very different than the one we see today. Piracy was still rife, with unauthorized clips all over the site. Although these were eventually removed it took a lot longer than it does these days.

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Connected TV platforms are growing in number as everyone tries to grab a piece of the emerging Web video sector. Vudu, up to now a distinct also-ran, has increased its chances of standing out from the crowd by being acquired by budget retailer Wal-Mart.

Vudu

Vudu is one of the many companies which started out offering a set-top box for serving Web video to consumers. When that strategy didn’t work, it became one of the many companies which switched to focusing on software rather than hardware.

This means Vudu’s service is now included on a number of other Web-connected devices instead, including televisions and Blu-ray players. The Wal-Mart deal will inevitably affect deals in place with Mitsubishi, Sanyo, Sharp, and Toshiba, but quite how isn’t clear.

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YouTube looks to be expanding its video rental service despite only mild success with the experiment with Sundance film festival offerings earlier this year. And it isn’t just films being offered for paid streaming, with anime, travel, craft, and fitness videos added to the mix.

YouTube Video Rentals

YouTube signaled its intent to start charging for some videos last September, with rumors of a movie rental service priced at $3.99-a-film emerging.

The trail then went cold until January of this year when YouTube officially released the first five offerings under the new service. Until then, the service had merely been trialled by Google employees.

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Online video viewers aren’t currently bombarded with lots of ads. Most sites include a few, but nowhere near as many as TV viewers have to contend with. However, this could soon change, and that’s not necessarily such a bad thing.

The Present

At the present time, online video viewers are lucky. And I say that as one of them. Most video sites are free, with advertising (both text and video-based) paying the bills and ensuring we get to watch good content without having to pay.

What’s more, the advertising is nowhere near as intrusive or as frequent as it is on traditional television. There’s probably four times as much advertising on TV as there is on the Web, on average.

However, according to AdAge, that could soon be set to change.

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Hulu has entered 2010 on a high, serving one billion videos in December 2009. And yet the company is facing new challenges, namely how to make the service a profitable one. Paid options are definitely on the way but it looks likely there’ll always be a free option.

Hulu – From Zero To Hero

After a short beta, Hulu launched fully in early 2008 with few people predicting it would become the success it has done. But the last two years has seen the service grow in popularity by a huge amount, with only a slight dip in the middle of last year.

But that trend now looks to have been reversed, with Hulu once again growing. With Disney now on board, and content partners and sponsors increasing in number, things are definitely looking good for Hulu.

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YouTube’s movie rentals trial brought in just over $10,000. But rather than the failure some are describing it as, this is surely a big enough success to warrant a larger roll-out of the service in the future. But as usual, content is key.

YouTube Trials Rentals

YouTube has now officially entered the market for movie rentals, having offered movies from the Sundance Film Festival for $3.99 apiece for the ten days that the festival lasted.

YouTube has had a relationship with independent filmmakers for a while now, as it offers another opportunity for them to get their work out there and in the eye-line of a bigger audience. And audiences don’t come much bigger than YouTube’s.

The trial run has now ended and the results are in.

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As Apple prepares to launch its next big thing in the Apple Tablet, it’s reportedly keen to strike a deal with U.S. television networks which would see the price of TV episodes cut in half. Could the Apple Tablet be about to revolutionize online video?

Apple Tablet Imminent

Apple is expected to launch its new Tablet PC – likely to be called the iSlate or the iPad – at a special media event tomorrow (Jan. 27). The Tablet is being touted as a revolution in home computing and in the way we will consume media in the future.

But pricing is going to be the key to this vision becoming reality. And that doesn’t just mean the pricing of the Apple Tablet, but also the pricing of the content Apple is expecting to be read, viewed, listened to, and played on the device.

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