YouTube is the second most popular website in the world and has over 1.9 billion monthly users. But how, when, and where did this success story start?

 

Let’s set the tone

It’s 2005. While your mom is watching Desperate Housewives in the background, you’re listening to Destiny’s Child on the radio (who officially announced their disbandment) and reading your People magazine about how Brad and Jen are over! Dumbledore died, Gwen Stefani is singing about bananas and Carrie Underwood wins American Idol. Meanwhile, Steve Chen, Chad Hurley, and Jawed Karim (all previous PayPal employees) had an idea about a platform to watch and share videos.

At the time, they were working out of a garage in Menlo Park, California and on February 14, 2005, the domain name “YouTube.com” was activated. The first ever YouTube video was uploaded on April 23, 2005. The video was called “Me at the Zoo” and shows Karim at the San Diego Zoo. While it was difficult to get users to upload videos in the beginning, that didn’t stop the creators’ persistence. YouTube even ran ads on Craigslist where they offered women $20 for every video they uploaded, however, no-one replied.

In July 2005, Karim attended a party where he met Keith Rabois, a former PayPal exec and part of Silicon Valley investment firm, Khosla Ventures. Karim showed Rabois YouTube and made him want to invest in video sharing platform. However, around that time, Karim also got accepted at Stanford pursuing a PhD and decided to leave the company. Rabois also got Roelof Botha, another investor at Sequoia Capital, to invest $500,000 in YouTube. In September 2005, a video starring football player Ronaldinho (that was actually an ad for Nike) hit a million views! And by November 2005, Sequoia invested another 3 million dollars in the company. By February 2006, the success of YouTube became would renowned! Saturday Night Live’s “Lazy Sunday” parody was uploaded to YouTube and the clip gained millions of viewers. NBC Universal demanded that the video was removed from YouTube, but that didn’t change the fact that YouTube had gained a great audience. 

In 2006, even with a rough start, YouTube could not fathom the success as it is today. 2007 predictions were on to something, but nowhere near the potential that YouTube has made, and continues to make. Back then, some issues that were faced were P2P sharing and the concept of digital marketing was still fresh. What experts were certain of was that paper print, CDs, even store fronts like Blockbuster were dying and streaming was just about to take off. Enter Netflix streaming service circa January 2007. Little did they know YouTube would be a very pivotal part of the progression!

 

“No Competition, No Progress” – Bela Karolyi

YouTube has had one main competitor from the very start; Vimeo. Vimeo was founded back in 2004 by Jake Lodwick and Zach Klein. The founders saw it as more of a side-project to their other site CollegeHumor. In the beginning, the sites’ traffic statistic were neck to neck, at least until the famous “Lazy Sunday” video. Vimeo was bought by IAC in August 2006, just a few months before Google acquired YouTube.

Today, Vimeo is still seen as a competitor to YouTube, but with some big differences. Vimeo does not have as many monthly viewers as YouTube with their 170 million viewers per month. And unlike YouTube, Vimeo costs money, Vimeo Pro (for professionals and businesses) starts at $170 per year. However, Vimeo does not have any ads as YouTube does. Since YouTube is owned by Google, Google will favor videos from YouTube in its search results too. I guess it pays to be the #1 search engine.  

 

Google had also tried to develop a video platform; “Google Videos.” Although, it didn’t grow as fast as YouTube. According to Botha, YouTube’s successes were many thanks to its simplicity and how easy it was to use. At YouTube, you could upload any kind of file, while at Google, you had to know the codec of your video and the dimension of the video frame.  YouTube was one of the fastest growing websites and in November, YouTube had 65 employees. Google didn’t want to give up. but instead of trying to beat them, they decided to try something else. In November 2006, YouTube was sold to Google for 1.65 billion dollars! Less than a year later, videos included adverts as a way of making money. By 2010, YouTube had more than 2 billion views per day!

And in December 2012, PSY’s music video ”Gangnam Style” was the first video to receive a billion views! Today, the music video ”Despacito” holds the record with 6 billion views. The music video became the first to achieve the milestones of 3, 4, and 5 billion views on YouTube.

 

There has been and still are, attempts to compete with YouTube. Facebook and Instagram are some of these examples.  In March 2018, Facebook announced that they were starting a subscription feature where video creators could get money from their Facebook followers. The idea was for people to pay $4.99 per month and to have a digital tip jar where fans could send the creators money each month in exchange for exclusive content and a badge for their profile that showed that they were a supporter. They are still offering this service, but it hasn’t been taking off so far, and creators have complained about Facebook taking parts of the revenue and controlling where their content is seen.

Instagram has also been trying out their own video service, called IGTV, namely Instagram TV, and exists within the Instagram app as well as its own app called IGTV.  Videos can be up to 10 minutes long with an exception for accounts with massive audiences who, instead, can post up to 60 minutes long videos. People have argued that IGTV won’t be a competitor, but more of a complement to YouTube and their content creators.

 

Whether or not there will ever be some serious competitors to YouTube remains to be seen, but since YouTube has Google to back them up as well as a great amount of monthly active users, it might be hard to beat them anytime soon!