YouTube Still Going Strong
From bust to billions in less than a decade.
Chad Hurley, Steve Chen, and Jawed Karim built the social phenomenon YouTube with a simple, poignant, and powerful goal: to help creators make and distribute video to as wide an audience as possible. Though they’ve since gone their separate ways—Hurley to his new startup MixBit, Chen to Google Ventures, and Karim to Y Ventures—their invention is the second largest search engine on the planet. In 2015, it celebrated its ten-year anniversary as the undisputed champion of online video.
Three hundred hours of content is uploaded to YouTube every minute. That content generates hundreds of millions of hours watched every day and billions of daily views. With that kind of bandwidth, YouTube can feel like drinking from the most entertaining and personal fire hose around for a global user base that has exceeded one billion.
Like many Silicon Valley innovations, this gem emerged from a failed venture. The three met as early employees of PayPal. There, they helped lay the ground work for the online pay service before it was sold to eBay in 2002. Newly rich, they decided to launch a start-up of their own. What they came up with was a dating site called Tune In Hook Up that floundered.
In 2004 Karim, frustrated at the scarcity of Janet Jackson clips following her controversial halftime performance at the Super Bowl, saw a niche they could fill. Karim presented his idea for a video sharing site to the other two, who quickly agreed. In the following days they divided their work based on skills. Hurley designed the logo and interface. Karim and Chen took up the technical work.
When it came to planning out the managerial duties, Karim opted out—instead he returned to school to finish his computer science degree. Hurley became the CEO and Chen the chief technology officer. In 2006, Google shelled out an estimated $1.7B for the site, and the rest is history.
In recent years, YouTube has taken on a more professional tone. Long gone are the days of parents filming their kids on cheap camcorders in dim lighting. Today’s Internet stars are mostly teenagers that record on Red Epic cameras, using three-point lighting. The personalities are integrated into verticals, with similar voices.
Names like Tyler Oakley and Bethany Mota, along with pseudonyms like Zoella and PewDiePie, have risen to national significance—along with the star power comes money and representation. While YouTube stars continue to grow their online presence, they also seek crossover appeal on more established media platforms. To meet the demands of this new breed of entertainers, major talent agencies started digital departments with a fleet of skilled executives ready to wrestle down offers and negotiate contracts for their clients.
Mota is an eighteen-year-old girl-next-door from California. In 2009, she started broadcasting her sartorial gets from retail chains (aka hauls) on the site. Since then, she’s amassed seven-and-a-half million subscribers, way more than Beyoncé or Lady Gaga, and is currently designing a line for Aéropostale.
Felix Arvid Ulf Kjellberg, also known as PewDiePie, is a Swedish video-gamer who’s living the dream making an estimated $23 million a year from broadcasting his gaming sessions online. Started in 2008, he has amassed nearly forty million subscribers thanks to his goofy and glib commentary. Recently, he made the record books by becoming the first account to reach ten billion total views on the site.
It’s not all fun and games. YouTube’s sweet spot as a platform, and a creative social outlet, lies in its ability to provide a front-row seat to viewers as a way to inform, inspire, and support them, particularly around a social mission. Instilling a sense of belonging in viewers is the surest way to hook them, not to mention to entice advertisers.
An example of direct access coupled with personal support comes from the creators of Everyone Is Gay, an organization that strives to be a one-stop shop for questions, answers, and advice for LGBTQ youth, their parents, and schools. Founders Kristin Russo and Dannielle Owens-Reid started an advice website in 2010 and then quickly embraced YouTube to add a video element to answer inquiries they received in a fun, engaging, and impactful way. The results of their labors: more than five million views of their site with over one-third of those coming from YouTube, an intense touring schedule to schools and community centers across the country, praise and support from celebrities such as Ellen DeGeneres, and a groundbreaking book entitled This Is a Book for Parents of Gay Kids.
“YouTube has given us the ability to reach people who don’t necessarily feel comfortable going to everyoneisgay.com,” says Owens-Reid. “There are so many people who aren’t ready to come out, or to have their search history be so blatantly LGBTQ. With YouTube, you have the ability to skip from video to video without having to explain yourself. It’s a powerful tool.”
The Silicon Valley behemoth is currently helmed by Susan Wojcicki. She, along with Marissa Mayer and Sheryl Sandberg, are part of a league of female executives upturning corporate boardrooms with new management philosophies. She’s been called the most powerful woman in advertising. YouTube’s success in the next decade will fall squarely on her ability to adapt to an ever shifting market.
The Race to Retain Viewers
YouTube is dependent on algorithms, those behind-the-scenes formulas that render links to other content you may enjoy based upon your viewing habits. On the current platform, these recommendations appear on the right side of YouTube’s webpage under the heading “Up Next” or as “Suggestions” just below the video you’re viewing on a mobile device.
If the algorithm’s suggestions are spot-on, a viewer will stick around. If the suggestions are off, viewers have plenty of other options for video viewing including streaming real-time content on new platforms such as Periscope and Meerkat that are steadily building their own celebrities and communities in much the same way YouTube has, but with a twist. These two newcomers allow creators to take an audience with them wherever they go and stream their entire experience live for the world to see. It’s attracting attention from creators, consumers, investors, and advertisers alike, and YouTube will have to bring its own spin to this rapidly advancing technology.
Bandwidth and access are two challenges that every online platform must confront at some point if it survives long enough in the cutthroat industry. Only forty percent of the world’s population has access to the Internet, which leaves over four billion people disconnected. With over a billion current users, YouTube is facing the challenge of a cap on its growth in a very real way. If it wants to keep growing and building revenue and profit, it will have to work on getting more people online and increasing the bandwidth and speed of connection for existing users to keep them creating and consuming its content.
Blazing a Video Trail
Hurley, Chen, and Karim certainly achieved their initial goal to establish a video platform created by users for users as a means to disrupt traditional media. But if there’s one business lesson that stands the test of time it’s that success is temporary and victors should never rest on their laurels. This is truer than ever in today’s always-shifting, never-satisfied world of instant everything. The question that remains for YouTube is whether it can change as quickly as we do and head in the right direction as the industry is transformed.
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