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YouTube, Hulu and other sites that stream videos for free online might lead in traffic and headlines, but by the end of the year, paid online video is expected to overtake them all in revenue, according to a new report from Strategy Analytics.

The research firm predicts global paid online video revenue will reach $3.8 billion this year, surpassing the $3.5 billion in revenue free, ad-supported video is expected to generate.

The entire online video sector is expected to grow 38% annually through 2012, with paid video growing faster than free video.

Paid online videowhich includes downloads, digital rentals and subscription servicesis expected to grow at a 39% annual rate through 2012, slightly above the 37% annual growth rate expected for free online video.