Founding (2005)

From left to right: Chad Hurley, Steve Chen, and Jawed Karim.

YouTube was founded by Chad Hurley, Steve Chen, and Jawed Karim, when they worked
for PayPal.[7] Prior to working for PayPal, Hurley studied design at the Indiana University of
Pennsylvania; Chen and Karim studied computer science together at the University of Illinois at
Urbana–Champaign.[8] YouTube's initial headquarters was above a pizzeria and Japanese restaurant
in San Mateo, California.[9]

Approximate representation of the site as it appeared a few months after its launch (archived by the Wayback
Machine).[10]

The domain name "YouTube.com" was activated on February 14, 2005 with video upload options
being integrated on April 23, 2005 after being named "Tune In, Hook Up" the original idea of Chad
Hurley, Steve Chen, and Jawed Karim. The concept was an online dating service that ultimately
failed but had an exceptional video and uploading platform. [11] After the infamous Justin Timberlake
and Janet Jackson Halftime show incident, the three creators realized they couldn't find any videos
of it on the internet, after noticing that this type of platform did not exist they made the changes to
become the first major video sharing platform. [12] The idea of the new company was for non-computer
experts to be able to use a simple interface that allowed the user to publish, upload and view
streaming videos through standard web browsers and modern internet speeds. Ultimately, creating
an easy to use video streaming platform that wouldn't stress out the new internet users of the early
2000s.[13] The first YouTube video, titled Me at the zoo, was uploaded on April 23, 2005, and shows
co-founder Jawed Karim at the San Diego Zoo and currently has over 120 million views and almost
5 million likes.[14][15] Hurley was behind more of the looks of the website, he used his art skills to create
the logo and designed the look of the website.[16] Chen made sure the page actually worked and that
there would be no issues with the uploading and playback process. Karim was a programmer and
helped in making sure the initial website got put together properly and helped in both design and
programming.[16]
YouTube began as an angel-funded enterprise working from a makeshift office in a garage. In
November 2005, venture firm Sequoia Capital invested an initial $3.5 million,[17] and Roelof Botha (a
partner of the firm and former CFO of PayPal) joined the YouTube board of directors. In April 2006,
Sequoia and Artis Capital Management invested an additional $8 million in the company, which had
experienced significant growth in its first few months. [18]

Growth (2006)
Timeline of events

July – Video HTML embedding

July – Top videos page

August – 5-star rating system

2005
October – Playlists

October – Full-screen view

October – Subscriptions

January – Groups function

February – Personalized profiles

March – 10-minute video limit

April – Directors function

2006
May – Video responses

May – Cell phone uploading

June – Further personalized profiles

June – Viewing history

2007 June – Local language versions

March – 480p videos

2008 March – Video analytics tool

December – Audioswap

2009 January – Google Videos uploading halted

 July – 720p videos

November – 1080p videos

December – Automatic speech recognition

December – Vevo launch

March – "Thumbs" rating system

2010
July – 4K video

November – YouTube Analytics

2011
November – Feature film rental

2012 June – Merger with Google Video

2013

2014 October – 60 fps videos

March – 360° videos

2015
November – YouTube Red launches

2016 February – YouTube subscription service

2017 February – YouTube TV launches

2018

2019 October - Two ads appear

After opening on a beta service in May 2005 YouTube.com was trafficking around 30,000 viewers a
day in just months of time. After launching six months later they would be hosting well over two
million viewers a day on the website. By March 2006 the site had more than 25 million videos
uploaded and was generating around 20,000 uploads a day.[19] During the summer of 2006, YouTube
was one of the fastest growing sites on the World Wide Web,[20] hosting more than 65,000 new video
uploads. The site delivered an average of 100 million video views per day in July. [21] However, this
did not come without any problems, the rapid growth in users meant YouTube had to keep up with it
technologically speaking, they needed new equipment to match the views and users they were
bringing in and they needed more broadband connection to the internet. The increasing copyright
infringement problems and lack in commercializing YouTube eventually led to outsourcing to Google
who recently had just failed in their own video platform. [19] It was ranked the fifth-most-popular
website on Alexa, far out-pacing even MySpace's rate of growth.[22] The website averaged nearly 20
million visitors per month according to Nielsen/NetRatings,[21] with around 44% female and 56% male
visitors. The 12- to 17-year-old age group was dominant. [23] YouTube's pre-eminence in the online
market was substantial. According to the website Hitwise.com, YouTube commanded up to 64% of
the UK online video market.[24]
YouTube entered into a marketing and advertising partnership with NBC in June 2006.[25]

Purchase by Google (2006)

On October 9, 2006, it was announced that the company would be purchased by Google for
US$1.65 billion in stock, which was completed on November 13. At that time it was Google's
second-largest acquisition.[26] This kickstarted YouTube's rise to becoming a global media dominator,
creating a multi-billion-dollar business that has surpassed most television stations and other media
markets, sparking success for many YouTubers.[13] Indeed, YouTube as an entity generated more
than twice the amount of profit in 2018 than any major TV network (with $15 billion compared to
NBC's $7 billion).[27] The agreement between Google and YouTube came after YouTube presented
three agreements with media companies in an attempt to avoid copyright-infringement lawsuits.
YouTube planned to continue operating independently, with its co-founders and 68 employees
working within Google.[28] Viral videos were the main factor for YouTube's growth in the beginning of
its early days with Google, for example Evolution of Dance, Charlie Bit My Finger, David After the
Dentist, and more viral videos.[29]
Google's February 7, 2007 SEC filing revealed the breakdown of profits for YouTube's investors
after the sale to Google. In 2010, Chad Hurley's profit was more than $395 million while Steve
Chen's profit was more than $326 million.[30]

Person of the year (2006)

In 2006, Time Magazine featured a YouTube screen with a large mirror as its annual 'Time Person
Of The Year'. It cited user-created media such as that posted on YouTube and featured the site's
originators along with several content creators. The Wall Street Journal and The New York
Times also reviewed posted content on YouTube in 2006, with particular regard to its effects on
corporate communications and recruitment. PC World Magazine named YouTube the ninth of its
Top 10 Best Products of 2006. [31] In 2007, both Sports Illustrated and Dime Magazine featured
positive reviews of a basketball highlight video titled, The Ultimate Pistol Pete Maravich MIX.[32]

Continued growth (2007–present)

YouTube's current headquarters in San Bruno, California (2010 to present)

It is estimated that in 2007, YouTube consumed as much bandwidth as the entire Internet in 2000.[33]
In 2007, YouTube launched the YouTube Awards, an annual competition in which users voted on
the best user-generated videos of the year.[34] The awards were presented twice, in 2007 and 2008.
On July 23, 2007 and November 28, 2007, CNN and YouTube produced televised presidential
debates in which Democratic and Republican US presidential hopefuls fielded questions submitted
through YouTube.[35][36]
In November 2008, YouTube reached an agreement with MGM, Lions Gate Entertainment,
and CBS, allowing the companies to post full-length films and television episodes on the site,
accompanied by advertisements in a section for US viewers called "Shows". The move was intended
to create competition with websites such as Hulu, which features material from NBC, Fox,
and Disney.[37][38]
YouTube was awarded a 2008 Peabody Award and cited as being "a 'Speakers' Corner' that both
embodies and promotes democracy".[39][40]
In early 2009, YouTube registered the domain  www.youtube-nocookie.com  for videos embedded
on United States federal government websites.[41][42] In November of the same year, YouTube
launched a version of "Shows" available to UK viewers, offering around 4,000 full-length shows from
more than 60 partners.[43]
Entertainment Weekly placed YouTube on its end-of-the-decade "best-of" list In December 2009,
describing it as: "Providing a safe home for piano-playing cats, celeb goof-ups, and overzealous lip-
synchers since 2005."[44]
In January 2010,[45] YouTube introduced an online film rentals service which is currently available
only to users in the US, Canada and the UK.[46][47] The service offers over 6,000 films.[48] In March 2010
YouTube began free streaming of certain content, including 60 cricket matches of the Indian Premier
League. According to YouTube, this was the first worldwide free online broadcast of a major sporting
event.[49]
On March 31, 2010, YouTube launched a new design with the aim of simplifying the interface and
increasing the time users spend on the site. Google product manager Shiva Rajaraman commented:
"We really felt like we needed to step back and remove the clutter." [50] In May 2010, it was reported
that YouTube was serving more than two billion videos a day, which was "nearly double the prime-
time audience of all three major US television networks combined". [51] In May 2011, YouTube
reported on the company blog that the site was receiving more than three billion views per day. [52] In
January 2012, YouTube stated that the figure had increased to four billion videos streamed per day.
[53]

According to May 2010 data published by market research company comScore, YouTube was the
dominant provider of online video in the United States, with a market share of roughly 43 percent
and more than 14 billion videos viewed during May.[54]
In October 2010, Hurley announced that he would be stepping down as the chief executive officer of
YouTube to take an advisory role, with Salar Kamangar taking over as the head of the company.[55]
James Zern, a YouTube software engineer, revealed in April 2011 that 30 percent of videos
accounted for 99 percent of views on the site.[56]
During November 2011, the Google+ social networking site was integrated directly with YouTube
and the Chrome web browser, allowing YouTube videos to be viewed from within the Google+
interface.[57] In December 2011, YouTube launched a new version of the site interface, with the video
channels displayed in a central column on the home page, similar to the news feeds of social
networking sites.[58] At the same time, a new version of the YouTube logo was introduced with a
darker shade of red, which was the first change in design since October 2006. [59]
In 2012, YouTube said that roughly 60 hours of new videos are uploaded to the site every minute,
and that around three-quarters of the material comes from outside the U.S. [52][53][60] The site has eight
hundred million unique users a month.[61]
Starting from 2010 and continuing to the present, Alexa ranked YouTube as the third most visited
website on the Internet after Google and Facebook.[62]
In late 2011 and early 2012, YouTube launched over 100 "premium" or "original" channels. It was
reported the initiative cost $100 million. [63] Two years later, in November 2013, it was documented
that the landing page of the original channels became a 404 error page. [64][65] Despite this, original
channels such as SourceFed and Crash Course were able to become successful.[66][67]
An algorithm change was made in 2012 that replaced the view-based system for a watch time-based
one that is credited for causing a surge in the popularity of gaming channels.[68]
In October 2012, for the first-time ever, YouTube offered a live stream of the U.S. presidential
debate and partnered with ABC News to do so.[69]
On October 25, 2012, The YouTube slogan (Broadcast Yourself) was taken down due to the live
stream of the U.S. presidential debate.
YouTube relaunched its design and layout on December 4, 2012 to be very similar to the mobile and
tablet app version of the site. On December 21, 2012, Gangnam Style became the first YouTube
video to surpass one billion views.[70]
In March 2013, the number of unique users visiting YouTube every month reached 1 billion. [71] In the
same year, YouTube continued to reach out to mainstream media, launching YouTube Comedy
Week and the YouTube Music Awards.[72][73] Both events were met with negative to mixed reception. [74]
[75][76][77]
 In November 2013, YouTube's own YouTube channel had surpassed Felix
Kjellberg's PewDiePie channel to become the most subscribed channel on the website. This was
due to auto-suggesting new users to subscribe to the channel upon registration. [78]
On April 3, 2018, a shooting took place at YouTube headquarters.[79]
In November 2019, YouTube has announced that the service would phase out the classic version of
YouTube Studio to all YouTube creators by the spring of 2020. [80] It was available and accessible to
some YouTube creators by the end of March 2020. [81]
In June 2020, YouTube phased out the ability to use categories.

Creators
In the early days of YouTube, there was no way to monetize videos on the platform. Much of the
site's content was homemade and produced by hobbyists with no plans for making money on the
site.[82][83] The first targeted advertising on the site came in the form of participatory video ads, which
were videos in their own right that offered users the opportunity to view exclusive content by clicking
on the ad.[84] The first such ad was for the Fox show Prison Break and solely appeared above videos
on Paris Hilton's channel.[84][85] At the time, the channel was operated by Warner Bros. Records and
was cited as the first brand channel on the platform. [85] Participatory video ads were designed to link
specific promotions to specific channels rather than advertising on the entire platform at once. When
the ads were introduced, in August 2006, YouTube CEO Chad Hurley rejected the idea of expanding
into areas of advertising seen as less user-friendly at the time, saying, "we think there are better
ways for people to engage with brands than forcing them to watch a commercial before seeing
content. You could ask anyone on the net if they enjoy that experience and they’d probably say
no."[85] However, YouTube began running in-video ads in August 2007, with preroll ads introduced in
2008.[86] In December 2007, YouTube launched the Partner Program, which allows channels that
meet certain metrics (currently 1000 subscribers and 4000 public watch hours in the past year) [87] to
run ads on their videos and earn money doing so. [86] The ability to monetize their content eventually
allowed many creators to turn what had been a hobby into a full-time career.
During the 2010s, the ability for YouTubers to achieve wealth and fame due to success on the
platform increased dramatically. In December 2010, Business Insider estimated that the highest
earner on YouTube during the previous year was Dane Boedigheimer, creator of the web
series Annoying Orange, with an income of around $257,000.[88] Five years later, Forbes released its
first list of the highest-earning YouTube personalities, estimating top earner PewDiePie's income
during the previous fiscal year at $12 million. [89] Forbes estimated that the tenth-highest earner that
year was Rosanna Pansino at $2.5 million.[a] The rapid influx of wealth within the YouTube
community has led some to criticize YouTubers for focusing on earnings more than the creativity and
connection with their fanbase that some claim was at the heart of the platform before expanded
monetization.[91][92][93] Although pursuing a full-time career on YouTube was once impossible, it is now
far more accessible and intensely sought after. Numerous studies in the late 2010s found that
YouTuber was the most desired career by children.[94][95][96]
As YouTubers have increased their earnings, they have also been able to increase their influence
outside of the platform. Some have ventured into mainstream forms of media, such as Liza Koshy,
who, among other pursuits, hosted the revival of the Nickelodeon show Double Dare[97] and starred in
the Netflix dance-comedy film Work It.[98] In 2019, Ryan's Mystery Playdate, a show starring Ryan
Kaji, the then-seven-year-old host of the toy review and vlog channel Ryan's World, began airing
on Nick Jr.;[99] later that year, NBC debuted A Little Late with Lilly Singh in its 1:35 AM ET time
slot. Singh's digital prominence was cited as a reason for her selection as host by then-NBC
Entertainment co-chairman George Cheeks.[100] In addition to expanding into other forms of media,
several YouTubers have used their influence to raise money for charity or speak out on social
issues. Notable examples include MrBeast and Mark Rober, who helped raise over $20 million with
their Team Trees campaign,[101][102] and Felipe Neto, who publicly criticized Brazilian president Jair
Bolsonaro for his response to the coronavirus pandemic.[103] In 2020, Time named Neto and fellow
YouTuber JoJo Siwa to its annual list of the world's 100 most influential people. [104][105]

Internationalization
On June 19, 2007, Google CEO Eric Schmidt was in Paris to launch the new localization system.
[106]
 The interface of the website is available with localized versions in 103 countries, one territory
(Hong Kong) and a worldwide version.[107]

Countries with YouTube Localization hide

Country Language(s) Lau Notes

 nch
date

 US Febr
A (and uary First
worldwi English 15, locatio
de 2005 n
launch) [106]

First
June intern
 Bra 19,
Portuguese ational
zil 2007
[106] locatio
n

June
 Fra 19,
French, and Basque
nce 2007
[106]

June
 Irela 19,
English
nd 2007
[106]

June
Italian 19,
 Italy
2007
[106]

June
 Jap 19,
Japanese
an 2007
[106]

June
 Net 19,
Dutch
herlands 2007
[106]
 June
 Pol 19,
Polish
and 2007
[106]

June
 Spa 19,
Spanish, Galician, Catalan, and Basque
in 2007
[106]

 Unit June Expan

ed 19, sion
English
Kingdo 2007 contin
m [106]
ues

Octo
 Mex ber
Spanish 11,
ico
2007
[108]

Octo
ber Block
 Hon
Chinese, and English 17, ed in
g Kong
2007 China
[109]

Octo
ber
 Tai
Chinese 18,
wan
2007
[110]

Octo
 Aus ber
English 22,
tralia
2007
[111]

 Ne English Octo

w ber
Zealand 22,
 2007
[111]

Nov
 Can emb
French, and English er 6,
ada
2007
[112]

Nov
 Ger emb
German er 8,
many
2007
[113]

Nov
emb
 Rus er
Russian
sia 13,
2007
[114]

Janu First
ary launch
 Sou
Korean 23,
th Korea in
2008 2008
[115]

Hindi, Bengali, English, Gujarati, Kannad May
 Indi 7,
a, Malayalam, Marathi, Tamil, Telugu,
a 2008
and Urdu [116]

Sept First
emb Middle
 Isra
Hebrew er East
el
16, locatio
2008 n

 Cze Czech Octo

ch ber
Republi 9,
2008
c [117]

Locati
Octo on
 Swe ber never
Swedish 22,
den launch
2008 ed in
[118]

2009

First
May Africa
 Sou 17,
Afrikaans, Zulu, and English n
th Africa 2010
[106] locatio
n

Sept
 Arg emb
Spanish er 8,
entina
2010
[119]

One
of the
Marc first
 Alg h 9,
French, and Arabic Arab
eria 2011
[120] World
locatio
ns

Marc
 Egy h 9,
Arabic
pt 2011
[120]

Marc
 Jord h 9,
Arabic
an 2011
[120]

 Mor French, and Arabic Marc

occo h 9,
2011
 [120]

Marc
 Sau
Arabic h 9,
di
2011
Arabia [120]

Marc
 Tuni h 9,
French, and Arabic
sia 2011
[120]

Marc
 Ye h 9,
Arabic
men 2011
[120]

Sept
emb
 Ken
Swahili, and English er 1,
ya
2011
[121]

Octo
 Phili ber
Filipino, and English 13,
ppines
2011
[122]

Octo
ber
 Sin
English, Malay, Chinese, and Tamil 20,
gapore
2011
[123]

Nov
emb Middle
 Bel er
French, Dutch, and German locatio
gium 16, n
2011
[106]
 Nov
emb
 Col er
Spanish
ombia 30,
2011
[124]

Needs
a
Dec Swahil
emb i
 Uga
English er 2,
nda edition
2011 for the
[125]

countr
y

Dec
 Nig emb
English er 7,
eria
2011
[126]

Janu First
ary locatio
 Chil
Spanish 20,
e n in
2012 2012
[127]

Febr
 Hun uary
Hungarian 29,
gary
2012
[128]

Marc
 Mal h 22,
Malay, and English
aysia 2012
[129]

Marc
 Per h 25,
Spanish
u 2012
[130]
  Unit April
ed Arab 1,
Arabic, and English
Emirate 2012
s [131]

May
 Gre
Greek 1,
ece
2012

May
 Indo 17,
Indonesian, and English
nesia 2012
[132]

June
 Gha 5,
English
na 2012
[133]

July
 Sen 4,
French, and English
egal 2012
[134]

Octo
ber
 Tur
Turkish 1,
key
2012
[135]

Dec
emb
 Ukr er
Ukrainian
aine 13,
2012
[136]

 Den Danish Febr

mark uary
1,
2013
 [137]

Febr
 Finl uary
Finnish, and Swedish 1,
and
2013
[138]

Febr
uary
 Nor
Norwegian 1,
way
2013
[139]

Marc
  Swit German, French, and Italian h 29,
zerland 2013
[140]

Marc Long-
 Aus h 29,
German waited
tria 2013
[141] launch

April
 Ro 18,
Romanian
mania 2013
[142]

April Long-
 Port 25,
Portuguese waited
ugal 2013
[143] launch

April
 Slov 25,
Slovak
akia 2013
[144]

 Bah Arabic Aug Multipl

rain ust e
16, Middle
 East
locatio
2013 ns
[145]

launch
ed

Aug
 Kuw ust
Arabic 16,
ait
2013
[145]

Aug
 Om ust
Arabic 16,
an
2013
[145]

Aug
 Qat ust
Arabic 16,
ar
2013
[145]

 Bos
Marc
nia and
Bosnian, Croatian, and Serbian h 17,
Herzego
2014
vina

Marc
 Bul h 17,
Bulgarian
garia 2014
[146]

Marc
 Cro h 17,
Croatian
atia 2014
[147]

 Est Estonian Marc

onia h 17,
2014
 [148]

Marc
 Latv h 17,
Latvian
ia 2014
[149]

Baltic
area
Marc
 Lith fully
Lithuanian h 17,
uania locally
2014
acces
sible

Marc
 Mac
Macedonian, Serbian, and Turkish h 17,
edonia
2014

Marc
 Mon
Serbian, and Croatian h 17,
tenegro
2014

Marc
 Ser
Serbian h 17,
bia
2014

Marc
 Slov h 17,
Slovenian
enia 2014
[150]

April
 Thai 1,
Thai
land 2014
[151]

May
 Leb 1,
Arabic
anon 2014
[145]
 Use
Spain
versio
Aug n or
 Pue ust USA
Spanish, and English
rto Rico 23, versio
2014 n
before
launch
.

 Icel ?,
Icelandic
and 2014

 Lux
?,
embour French, and German
2014
g

First
conte
Octo mpora
 Viet ber ry
Vietnamese
nam 1, comm
2014 unist
locatio
n

Block
ed in
Febr
2010,
 Liby uary
Arabic but
a 1,
unbloc
2015
ked in
2011.

June
 Tan
Swahili, and English 2,
zania
2015

June
 Zim
English 2,
babwe
2015
 Octo
 Aze ber
Azerbaijani 12,
rbaijan
2015
[152]

Octo
 Bel ber
Russian 12,
arus
2015
[152]

Octo
ber
 Geo
Georgian 12,
rgia
2015
[152]

Octo
 Kaz ber
Kazakh 12,
akhstan
2015
[152]

Nov
emb
 Iraq Arabic er 9,
2015
[citation
needed]

Janu
ary
   Nep Nepali 12,
al 2016
[153]

 Paki Urdu, and English Janu Block

stan ary ed in
12, 2012
2016 but
[154]
unbloc
ked in
 2015

Janu
 Sri ary
Sinhala, and Tamil 12,
Lanka
2016
[155]

Aug
ust
 Jam 4,
English
aica 2016
[citation
needed]

June
 Malt
English 24,
a
2018

Janu
 Boli ary
Spanish
via 30,
2019

Janu
 Cos ary
Spanish
ta Rica 30,
2019

Janu
 Ecu ary
Spanish
ador 30,
2019

Janu
 El
ary
Salvado Spanish
30,
r
2019

 Gua Spanish Janu

ary
 30,
temala
2019

Janu
 Hon ary
Spanish
duras 30,
2019

Janu
 Nic ary
Spanish
aragua 30,
2019

Janu
 Pan ary
Spanish
ama 30,
2019

Janu
 Uru ary
Spanish
guay 30,
2019

Febr
 Par uary
Spanish and Guarani
aguay 21,
2019

 Do Febr
minican uary
Spanish
Republi 21,
c 2019

Last
Europ
Marc
 Cyp ean
Greek and Turkish h 13,
rus Union
2019
locatio
n
  Liec Marc
htenstei German h 13,
n 2019

Google aims to compete with local video-sharing websites like Dailymotion in France. It also made
an agreement with local television stations like M6 and France Télévisions to legally broadcast video
content.[citation needed]
On October 17, 2007, it was announced that a Hong Kong version had been launched. YouTube's
Steve Chen said its next target will be Taiwan.[156][157]
YouTube was blocked from Mainland China from October 18 due to the censorship of the
Taiwanese flag.[158] URLs to YouTube were redirected to China's own search engine, Baidu. It was
subsequently unblocked on October 31.[159]
The YouTube interface suggests which local version should be chosen on the basis of the IP
address of the user. In some cases, the message "This video is not available in your country" may
appear because of copyright restrictions or inappropriate content. [160] The interface of the YouTube
website is available in 76 language versions,
including Amharic, Albanian, Armenian, Bengali, Burmese, Khmer, Kyrgyz, Laotian, Mongolian, Persi
an and Uzbek, which do not have local channel versions.[161] Access to YouTube was blocked
in Turkey between 2008 and 2010, following controversy over the posting of videos deemed insulting
to Mustafa Kemal Atatürk and some material offensive to Muslims.[162][163] In October 2012, a local
version of YouTube was launched in Turkey, with the domain  youtube.com.tr . The local version
is subject to the content regulations found in Turkish law.[164] In March 2009, a dispute between
YouTube and the British royalty collection agency PRS for Music led to premium music videos being
blocked for YouTube users in the United Kingdom. The removal of videos posted by the major
record companies occurred after failure to reach agreement on a licensing deal. The dispute was
resolved in September 2009.[165] In April 2009, a similar dispute led to the removal of premium music
videos for users in Germany.[166]

Business model, advertising, and profits

YouTube's headquarters in San Bruno from 2006 to 2010

YouTube's early headquarters in San Mateo

Before being purchased by Google, YouTube declared that its business model was advertisement-
based, making 15 million dollars per month.
Google did not provide detailed figures for YouTube's running costs, and YouTube's revenues in
2007 were noted as "not material" in a regulatory filing.[167] In June 2008, a Forbes magazine article
projected the 2008 revenue at $200 million, noting progress in advertising sales. [168]
Some industry commentators have speculated that YouTube's running costs (specifically the
network bandwidth required) might be as high as 5 to 6 million dollars per month, [169] thereby fuelling
criticisms that the company, like many Internet startups, did not have a viably implemented business
model. Advertisements were launched on the site beginning in March 2006. In April, YouTube
started using Google AdSense.[170] YouTube subsequently stopped using AdSense but has resumed
in local regions.
Advertising is YouTube's central mechanism for gaining revenue. This issue has also been taken up
in scientific analysis. Don Tapscott and Anthony D. Williams argue in their book Wikinomics that
YouTube is an example for an economy that is based on mass collaboration and makes use of the
Internet.
"Whether your business is closer to Boeing or P&G, or more like YouTube or flickr, there are
vast pools of external talent that you can tap with the right approach. Companies that adopt
these models can drive important changes in their industries and rewrite the rules of
competition"[171]:270 "new business models for open content will not come from traditional media
establishments, but from companies such as Google, Yahoo, and YouTube. This new
generation of companies is not burned by the legacies that inhibit the publishing incumbents,
so they can be much more agile in responding to customer demands. More important, they
understand that you don't need to control the quantity and destiny of bits if they can provide
compelling venues in which people build communities around sharing and remixing content.
Free content is just the lure on which they layer revenue from advertising and premium
services".[171]:271sq
Tapscott and Williams argue that it is important for new media companies to find ways to make a
profit with the help of peer-produced content. The new Internet economy, (that they term
Wikinomics) would be based on the principles of "openness, peering, sharing, and acting
globally". Companies could make use of these principles in order to gain profit with the help
of Web 2.0 applications: "Companies can design and assemble products with their customers,
and in some cases customers can do the majority of the value creation". [171]:289sq Tapscott and
Williams argue that the outcome will be an economic democracy.
There are other views in the debate that agree with Tapscott and Williams that it is increasingly
based on harnessing open source/content, networking, sharing, and peering, but they argue that
the result is not an economic democracy, but a subtle form and deepening of exploitation, in
which labour costs are reduced by Internet-based global outsourcing.
The second view is e.g. taken by Christian Fuchs in his book "Internet and Society". He argues
that YouTube is an example of a business model that is based on combining the gift with the
commodity. The first is free, the second yields profit. The novel aspect of this business strategy
is that it combines what seems at first to be different, the gift and the commodity. YouTube
would give free access to its users, the more users, the more profit it can potentially make
because it can in principle increase advertisement rates and will gain further interest of
advertisers.[172] YouTube would sell its audience that it gains by free access to its advertising
customers.[172]:181
"Commodified Internet spaces are always profit-oriented, but the goods they provide are not
necessarily exchange-value and market-oriented; in some cases (such as Google, Yahoo,
MySpace, YouTube, Netscape), free goods or platforms are provided as gifts in order to
drive up the number of users so that high advertisement rates can be charged in order to
achieve profit."[172]:181
In June 2009, BusinessWeek reported that, according to San Francisco-based IT consulting
company RampRate, YouTube was far closer to profitability than previous reports, including
the April 2009, projection by investment bank Credit Suisse estimating YouTube would lose
as much as $470 million in 2009. [173] RampRate's report pegged that number at no more than
$174 million.[174]
In May 2013, YouTube launched a pilot program to begin offering some content providers
the ability to charge $0.99 per month or more for certain channels, but the vast majority of its
videos would remain free to view.[175][176]