The story of YouTube is a fascinating and inspiring one and shows how a single great idea can by the means of viral and word of month overtake all the big boys and blow them away.
YouTube originated much like Google, Ebay and Microsoft from a garage and was launched early in 2005. The founders were Chad Hurley, Steve Chen and Jawed Karim all of them met during their time working for another online giant PayPal.
Apparantly one night the guys became frustrated whilst trying to email a video clip. It was then they formulated the idea of a video sharing platform. This just goes to show the old saying is true. Find a problem then provide a solution.
The Youtube trademark domain name was registered on Feb 14th 2005 and the site went live in May. Youtube was instantly a roaring success and news of the site spread by word of mouth which fuelled its initial growth.
As the founders were broke, the official launch came at the end of 2005 after securing funds of $3.5 million from Sequoia Capital, followed by a further $8 million during April 2006. This cash was needed to keep the servers going as hosting so many videos required enormous bandwidth. The cash also allowed new features to be added further adding to its success and growth.
Amazingly Youtube still wasn’t making revenue and not spending a penny on advertising at this time. They cleverly played it very smart by encouraging and making it easy for the viewers of the site to do the promoting. Viral marketing at its best, with simple ideas such as having very short (easy to email) links to videos and the tell a friend feature and possibly the best idea of allowing videos to easily be embedded in profiles of social networking and other sites all branded and linked back to the YouTube website. The video voting feature also created a sense of community as did the user profile pages.
The buzz of online videos and press attention gained them even more publicity and users.
YouTube and copyright
Of course it was not always a bed of roses during the growth of the company. The copyright issues dogged the company on many occasions and probably will continue to do so. Although the site was designed for user made videos, plenty of copyright material was uploaded which was a major factor of their amazing growth.
Youtube very cleverly dealt with this issue in utilizing the very grey area of the DMCA Safe Harbor Provisions; which provides protection to service providers from liability for the activities of its users. As they were seen in the eyes of the law to fall into that category, they have been somewhat protected. So far anyways.
And very cleverly instead of trying to be crusaders and digging their heels in, which has been the undoing of several other companies (Napster anyone), they extended an olive branch to some copyright owners in the form of revenue sharing deals which effectively licensed much of the content.
So for example YouTube has software in place which can identify soundtracks in videos posted posted by its users, the copyright owner then gets a slice of any advertising revenue run alongside the video.
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