Graph one: Look how fast this business is growing! Broadcast and cable shows on the Web will generate less than $600 million in ad dollars in the U.S. this year, but four years from now that number will be close to $1.5 billion (click to enlarge).

Graph two: Look how tiny this business is! That $1.5 billion will be a drop in the bucket for TV advertising as a whole, which is a $70 billion business, give or take a billion. (It’s so small it’s literally almost impossible to find, but if you squint hard you can see a tiny sliver of dark green on the top part of the chart below.) And crucially, it will be smaller than the $2 billion that Amel predicts will flow out of conventional TV advertising.

Amel is the same analyst who cause a bit of a stir last year when he predicted that Hulu, the joint venture owned by News Corp.’s (NWS) Fox, GE’s (GE) NBC and Disney’s (DIS) ABC, was on track to eclipse Google’s (GOOG) YouTube in gross profit. This report is less pointed–it’s basically a landscape piece–but there are still some good nuggets.

Such as:

• Apple’s (AAPL) iTunes dominates the market for paid TV shows delivered over the Web and controlled 60 percent of the market last year. Amel figures iTunes will hold on to 43 percent of the market by 2013. But he thinks that market will be significantly smaller than advertising on free TV shows delivered over the Web: $800 million vs. $1.5 billion in four years.
• Web TV purveyors like Hulu and CBS (CBS) have been reluctant to run as many ads online as they do on conventional TV. But Amel says that will change. Web TV shows carry an average of five ads per hour, but he figures distributors can eventually boost that number to 12 ads an hour.

One big caveat here: Amel’s report only addresses TV shows on the Web, not video on the Web. Amel doesn’t spell this out, but I assume that’s because he’s most concerned here with the fate of existing players like NBC, ABC, et al. And, I’m guessing, because he doesn’t think that video on the Web that isn’t TV has much value.

There’s a whole ecosystem of players creating and distributing Web-native video who would argue with that. But they’ll have a stronger case when they can show significant revenue of their own.

But I had questions about the data, reported by the Financial Times. So I called Arash Amel, the Screen Digest analyst who provided the numbers. Glad I did, because Amel’s analysis is actually much more provocative: He believes Hulu is already making more money than YouTube.

The short explanation: The numbers that the FT reported are gross revenue–total money received from advertisers–not net revenue, what’s left over after paying for the video.

If you’re talking about net revenue, Amel says, then Hulu, a joint venture between News Corp.’s Fox (NWS) and GE’s NBC (GE), is already making a small profit–perhaps $12 million a year. And he believes that Google’s (GOOG) YouTube is still losing money every year. (News Corp. is the owner of Dow Jones and this Web site.)

(UPDATE: I shouldn’t have used the word “profit”, and Amel didn’t when he discussed this with me. My former boss Henry Blodget correctly points out that what Amel is saying is that Hulu is generating a modest gross profit, not an operating profit. Henry is less than impressed with this. But it’s better than what YouTube can claim.)

The longer explanation: Amel’s model assumes that while Hulu is showing far fewer video streams to many fewer people than Google, it is able to sell ads on most of them–perhaps 80 percent of all streams have a paying advertiser, he thinks. Google, meanwhile, is thought to be able to sell ads on just three percent to four percent of its views.

Just as important, but not widely discussed: Amel believes that YouTube’s costs are much more significant than most observers guess. That’s because YouTube isn’t just paying massive bandwidth and hosting costs for all those clips. It’s also paying out huge licensing and content fees to copyright owners like music labels.

Amel thinks YouTube is paying more for those fees than it does for infrastructure/bandwidth. This dovetails with what an industry source told me last week.

Amel won’t be publishing a full report on his analysis until next week. But he was able to break down his numbers for me over the phone. There is one obvious problem here. While he’s worked out a set of fairly detailed numbers for Hulu, he can’t get any more specific with Google other than that it’s “loss-making.”

Hulu:

2008 gross revenue for US: $70 million

Net margin (factors in infrastructure costs and payments to affiliates and content owners): 15 percent to 18 percent

Net revenue: $10.5 million to $12.6 million

YouTube:

2008 gross revenue for U.S.: $114 million

Net margin: None

Net revenue: None

But wait a minute. These are U.S.-only numbers. And YouTube generates a huge amount of its traffic from non-U.S. surfers, while Hulu is only available in the U.S. Doesn’t this help YouTube’s case?

Nope. It actually hurts it. That’s because YouTube’s costs (for both infrastructure and licensing/content fees) don’t go away when it shows a stream to a viewer in, say, Spain. But the potential for generating ad revenue shrinks significantly.

Big picture: YouTube is the world’s dominant video site, and that’s worth a lot–once Google figures out how to sell more ads against more of its content, for more money. In the old go-go growth days, there wasn’t a lot of pressure on the site to do that. Now there is. And Hulu, designed primarily as a bargaining chip for the big networks, who were afraid of getting crushed by Google, has become a most pleasant surprise: A money maker.