From ‘Me at the Zoo’ to ‘Red’, the new YouTube subscription service

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• 21 December 2015

Elephants trunks are cool

The first YouTube video uploaded was “Me at the Zoo” on April 23rd 2005, by one of the site’s three co-founders, Jawed Karim. The 18-second piece now has over 28,000,000 views and features him talking in front of some elephants, complimenting their “really, really long trunks” as being “cool”.

Each of the YouTube co-founders was an early employee at PayPal, the online payment company co-founded by Elon Musk, who you probably have heard of, though you can’t afford one of his electric cars.

More than likely they made enough to quit their day jobs and pursue their own interests.

No one seems to know exactly how YouTube started — even the founders disagree. There are three different stories: it began as an online video dating site, trying to make an easy way to view videos of Janet’ Jackson’s Super Bowl wardrobe malfunction and the 2004 Tsunami, or making a site for sharing dinner party videos. Either way, none of them envisioned creating the biggest online video site in the world!

Google Calling

Their first office was near a pizzeria and a Japanese restaurant in San Mateo, California, 19 miles south of San Francisco. After operating for about one year, the site had 100 million video views per day. At this point, Google came calling and bought the startup for over $1.5 billion in stock.

Today, YouTube has over one billion users, even though the site is only ten years old. The company has also paid $1 billion dollars to people who upload videos to the site and who own the copyrights.

Some YouTubers earn their whole living making and uploading videos and the site has its own stars who generate millions and millions of views, while making more money than they would have doing “normal” jobs, like working at a pizzeria. The Fine Brothers could own their own pizza chain; they have made $8.5 million in a single year. A dancing violinist named Lindsey Stirling has made $6 million in twelve months.

Money, money, money

Now Google/YouTube offers to charge a monthly fee if you want to view or listen to its videos without any ads. So, if you want to watch PewDiePie ad-free, you can pay $9.99 a month for Android users or $12.99 for iOS users.

That isn’t all subscribers get for paying the monthly fee for YouTube Red; they also can save videos and playlists and watch them offline. Additionally, they will be able to listen to videos while doing other things on their devices, using the Background Play service and YouTube will make a mixed audio collection based on user viewing/listening habits.

Fancy, eh?

Google, er YouTube is making a bet that some of its users have strong enough connections to the site’s content, there may be a willingness to pay. The question seems to come down to whether or not there are enough that don’t want to see any ads at all.

The ads aren’t that annoying, are they? Many of us have simply hit the Skip Button a few moments after an ad started rolling, so it will be fascinating to see if anyone decides to pay for YouTube Red.

After startups create a successful venture they generally have two options: get acquired by a larger company or go through an IPO. Of course, Google wants to “monetize” YouTube by increasing revenue, but such efforts run the risk of alienating or confusing users. If YouTube Red causes any upset or revolt amongst its user base, the solution is very simply: pull the plug.

Remember Google Orkut? Probably not, right? It was a Google social networking site that did well in Brazil and India, but that was about it, so it was shuttered.

Google takes risks and generally wants to in order to advance, so failure is not desired but is tolerated as being necessary for innovation. One of Google’s co-founders Larry Page has said, “Many companies get comfortable doing what they have always done, with a few incremental changes. This kind of incrementalism leads to irrelevance over time, especially in technology, because change tends to be revolutionary, not evolutionary.”

Sometimes we have to do things that may seem too risky or odd in order to expand our awareness and grow. The ad-free service might pay off or not, but one thing that is clear about this latest YouTube offering: Google will learn from it regardless of the outcome.

Image via Flickr, Chad Hurley and Steven Chen – YouTube cofounders, the Blog Optical

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