In April, YouTube will celebrate its 12th birthday. Time goes by fast, and now this website has an audience of 1.3 billion. Users upload close to 300 hours of videos watch hundreds of millions worth of hours of videos every day. YouTube has become a cultural phenomenon, has made famous millions of Internet users, and even helped to affect state revolutions! However, despite the impressive stats and long history, YouTube’s money problem is serious.
How It All Began
Want to know how YouTube was invented? It’s hard to believe, but YouTube was created thanks to Justin Timberlake, Janet Jackson and their famous “costume malfunction” incident at the Super Bowl Championship in 2004. During their song, Timberlake pulled the top of Jackson’s suit and bared a part of her body. Millions of viewers saw it on television and millions did not. Today, in such cases, people just go on YouTube and look for what they need, but there was nothing like YouTube at that time.
One of the viewers who missed the show was Jawed Karim, who was working at PayPal. Realizing the need for a certain place on the Internet, somewhere that would allow you to upload videos, Karim and his friends Steve Chen and Chad Hurley began writing a code for the first video sharing website.
YouTube creators uploaded the first video on YouTube on April 23, 2005 (they registered the domain on February 14). The video, published by Karim, was an 18-second video called “Me at the Zoo”. The website started to attract users quickly, and the volume of uploaded videos grew with each passing day. In 2006, after realizing the prospect of the undertaking, Google bought YouTube for $1.6 billion.
The first YouTube video ever
YouTube Makes no Money
During its existence, video hosting has seen increases in revenues of up to $4 billion. However, YouTube is not profitable! All YouTube money earned goes to pay for content and equipment needed for the website’s operations. It is hard to imagine what is preventing YouTube from making money. And the cost of their equipment is a trade secret. Such Internet giants like Amazon, Facebook, and Google do not disclose such data so competitors cannot guess how they manage to gain advantages.
YouTube’s administration faces competition in the relatively new video sharing fields. But they struggle for a fraction of the traditional video hosting market. Previously, social networks took links to YouTube easily, but now they’ve developed their own video services. In 2014, Facebook allowed users to embed their own videos, and YouTube ceased to be the only worldwide service with such a function. Also, social networks have one significant advantage – the majority of accounts are real and are verified for their authenticity. YouTube has never been able to deal with trolls effectively.
In 2005, shortly after the launch of YouTube, TV channels began to seriously fear that the new site would steal their content and distribute it illegally. Instead, the video hosting giant has created its own unique culture. Users can become popular and make money online on YouTube by just telling about their own lives. For a long time, video hosting was working with this model, but it has not yet turned a profit.
Now it’s time for the most popular video hosting to change. The website’s management will have to change the YouTube monetization strategy and produce more quality content.
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