For the longest time, YouTube was the online place for video, and it still is in terms of total visits, but it has a fast-rising rival in Hulu, and one with a huge advantage, the quality of its video--top TV shows like NBC's "The Office" and Fox's "American Idol."

Now YouTube is setting about to challenge Hulu by offering visitors access to its own vast library of TV shows and movies, thanks to agreements announced yesterday with Sony, Lions Gate, MGM, and Paramount, among others major entertainment companies.

The addition of professionally produced video could provide YouTube with a much-needed stream of revenue from advertising it could splice into those TV shows and movies.

YouTube's current content, the bulk of which is amateur-produced, isn’t compatible with advertising for a lot of reasons.

The addition of professionally produced content also opens to the door for charging visitors at some point. But YouTube affirms that it intends to remain a site for a full range of video, noting that its traffic, which is huge, is generated by the amateur content that's long been its staple.

In March, the site had over 89 million viewers who streamed over 5 billion videos, according to data from Nielsen Online, versus 8.8 million viewers streaming 348.5 million videos on Hulu.

Also, while it may add professional content, it will always be second to Hulu in one critical area, television.

Owned by NBC and Fox parent News Corp., Hulu has access to current-run TV shows that YouTube will never get rights to, and Hulu is about to add ABC as a partner, bringing in its content as well.

The longer-term challenge for YouTube is to figure out how to place advertising across all of its content.

By one estimate, YouTube is expected to lose $470 million this year. Fortunately it has deep pockets, owned as it is by Google, which reported having $6.5 billion in cash at the end of March.