After YouTube launched in 2005, it went from a simple video-sharing platform to a global phenomenon that changed how people interacted with video. The internet was ready for a revolution in content distribution, and YouTube stepped in to fill the need. It was more than watching videos online; the révolutionnaires were interested in a community where anyone could share their experiences, jokes, creativity, how-tos, and interviews without being gatekept by traditional media.
People wanted an easy way to share and consume video content, but they faced significant roadblocks:
There was a high barrier to entry for sharing video: previous platforms required technical expertise or financial investment to upload video, which limited how many people could use it.
There wasn’t a way to engage with online videos: existing platforms offered little interaction, making it difficult for users to engage with content and creators, stifling community building and feedback.
It was too hard to find videos: finding relevant videos was often cumbersome due to poor search capabilities and organization, it was a subpar user experience compared to other content types like text and images.
YouTube was a perfect storm of technology, timing, and good intention. Tech was coming back after the crash of ‘99, and significant investment had been made in global internet bandwidth. More, cheaper internet allowed YouTube to offer free uploads, which was unprecedented then. To upload and share video using another product, you had to pay.
One key feature was YouTube adding the ability to upload videos from your cell phone in May of 2006. This flooded the service with cats, comedy, and street fights. People shared videos that hit nerves. By lowering the barrier for sharing videos with a free and easy way to upload, YouTube was rewarded with more content. This kickstarted an early audience of creators. Sometimes, they got too much content. Like when people uploaded full-length feature films without permission or recently released albums. YouTube democratized content creation with an easy-to-use product.
YouTube iteration was rapid. Within a year of launch, they had added ratings on videos, profiles, subscriptions, full-screen viewing, favorited videos, playlists, and comments. The engagement on YouTube was off the charts. With this combination of qualities in their product, they generated not just views, but interactions on video content. People were dunking in the comments, rating the videos, and creating playlists. Today it sounds like table stakes, but then, it was the first time these primitives were brought to video.
Engagement keeps people on the platform, a good thing if you’re selling ads. But it does something else. More engagement on your video means you’re more likely to share your video again. Comments on videos were dopamine generation buttons. Like a morphine switch on a hospital bed. No other video platform had this combination of engagement features, free uploads, and a growing content database. And sharing videos you liked was part of the cultural experience.
YouTube used these best in class features to become first in mind—the first product you thought of when you thought video. It was the best place to watch that wasn’t already on your TV. Like other tech companies that use network effects as tailwinds to build an audience, YouTube was no different. It was conducting a silicon symphony in the valley. People were watching 100 million videos a day one year after their founding.
There was so much attention on YouTube, it became the place to advertise, not the product that needed advertising.
The biggest critique of YouTube was not the product—which was easy to use and doing well—it was their business model. Plus, lawsuits were stacking up due to more and more users uploading copy-written content. How could they offer everything for free, while simultaneously fighting lawsuits? Viacom, the Premier League, and the New Jersey Turnpike Authority all took YouTube to court. But just in time, YouTube had recruited a powerful partner.
Around the same time of YouTube’s launch in 2005, Google launched “Google Video”. This product allowed hosted video upload and embeds on your site. While they had an implicit advantage in search—you could search Google for videos across YouTube, Vimeo, Myspace, and Yahoo! video—Google’s product didn’t have as much usage. It didn’t have the features to bootstrap a video culture like YouTube did—it was more feeds and speeds—upload your video and view it, that’s it. YouTube was the best solution to uploading, sharing, and viewing video because it was purpose-built for this community (with strong engagement features), and it wasn’t inside a mega-corp of other products. Google Video was a library of videos, not the fun party you wanted to go to.
YouTube followed one of Google’s favorite business model attributes: free. And in a sense, Google was the perfect partner for YouTube. Not much more than a year after YouTube was founded, Google acquired it for $1.65 billion.
Getting acquired by Google gave YouTube significant resources for two main cost categories: (1) financing the cost of uploading and serving video for free, and (2) fighting lawsuits and moderating content. You could cut YouTube’s acquisition two ways. One, they were growing fast and Google couldn’t out-compete them as evidenced by their failed launch of Google Video. Why sell so soon? They could have taken over the world! On the other hand, the growth was unsustainable and burning cash. Without help from legal, policy, and content moderation, they’d be dead.
Google added more muscle than just money and maturity, they were able to make search stronger. Of course, the search giant could improve search by better integrating with their dominant search engine. But YouTube had pretty strong search functionality prior to Google’s acquisition. During its manic shipping spree, they shipped tags. Tagging content is an important method of categorizing it. This, in combination with counts for: views, comments, and ratings, helped them deliver a simple search experience. Making it easy to find videos you were interested in.
YouTube was the easiest way to upload video, for free, with the best engagement, making it the best product for sharing video. More uploads and sharing meant more content, which made it the best product for finding video. This helped it become first in mind when you were looking to watch something.
They leveraged the creative and videos that were most popular. Simply sharing a YouTube video was an advertisement for the product.
Once they got older, they did what Facebook and others did to grow, like internationalizing to many languages and optimizing for SEO with the help of their big brother. They attracted an even bigger audience and continuously improved the experience of creating, finding, watching, and engaging with video.
YouTube demonstrated getting people what they wanted: entertainment and education in video form, which people felt a part of. They did so by removing the steady barriers that prevented anyone from doing so since inception. They became synonymous with online video and staked their claim as the democratizer and enabler of creative video content.