After reading about new YouTube API and Hulu launch, I guess I realized difference between distribution & destination.
As I understand it, a web service is "destination" where people stay there, like yahoo.com. It essentially is a portal which have original editorial and may aggregate external content. Techcrunch noted with new YouTube APIs there is a strong indication that YouTube wants to be in hosting and distribution business as opposed to destination.
On the "distribution" side, Hulu CEO Jason Kilar notes that he is happy to know that that somebody who’s consuming the full episode of 30 Rock was within Yahoo. I guess the main motivation behind "distribution" business model is it is hard to create new destination. a good analogy from physical world is how many malls one can open. So it is in best interest of content providers that they keep open mind towards having somebody else host their content. Of course, one needs to make sure that balance doenst tilt all the way like what Steve Jobs did to music industry.