YouTube Turns Ten: What Have Video Sites Changed in a Decade?

You may not have watched it in years, but YouTube, and the video sites that followed it, really did change the world.

On April 23, 2005, Jawed Karim, a former PayPal employee, uploaded a video called "Me at the zoo" to a website named YouTube. The site had only just gone live. Karim had founded it with two other PayPal alumni, Steve Chen and Chad Hurley.

Half a month later, the video got its first comment, "interesting...", from YouTube's first registered user, "COBALTGRUV."

*The first video ever posted on YouTube. If you can reach the site, *click here

In the decade since, this 18-second internet "relic" has been played more than 19 million times. It is also a perfect example of the kind of online video YouTube made mainstream: on a decentralized platform, one good enough reason is all it takes to draw astonishing attention, with no need for TV-grade production or a broadcast slot.

Most Chinese-speaking users probably haven't used YouTube for years, yet the platform, which Google bought in 2006, has grown into one of the most important online communities in the world. In these ten years, YouTube was where Justin Bieber got his start. A single Psy video has been played more than 2 billion times. Through gameplay videos, the indie game Minecraft, which spent not a cent on marketing, became a business worth hundreds of millions of dollars a year and was eventually sold to Microsoft for US$2.5 billion. Even one person at home in front of a camera, playing games or unboxing Disney toys, can bring a team millions or even tens of millions of dollars a year on YouTube.

As the cost of moving data across the internet fell, and as the iPhone brought the internet onto phones in 2007, YouTube and the many kinds of video sites that followed it, including Netflix, Twitch, Youku, iQiyi and Douyu, became fixtures of everyone's life. As early as 2013, more than half of the world's downstream internet traffic was video.

Starting in 2007, YouTube launched local versions in 75 countries and regions, in 61 languages. By comparison, only about 50 languages have more than 100,000 Wikipedia articles. On average, about 60% of the views each YouTube uploader gets come from abroad. More important, for ten years everything that happens on YouTube has affected countless users and industries around the world.

YouTube Remade Hollywood

"We sat in a room thinking, 'This logic isn't solid enough, it won't get past Honest Trailers.' We were literally making a movie that's immune to Honest Trailers." So said Joe Russo, director of Captain America: The Winter Soldier, in an interview. Honest Trailers is not the flagship review show of some famous TV network. It is a series that exists only on YouTube, mocking one film a week with a parody trailer.

Criticism is not the only way YouTube influences Hollywood. Today's YouTube is practically a second Hollywood.

Studios that make original content, such as Big Frame, the Collective and Maker Studios, keep signing performers and run hundreds of original channels, earning their money from YouTube's ad revenue share. VidCon, the annual gathering started by YouTubers (people who publish videos on YouTube), looks more and more like YouTube's red-carpet event, and YouTube stars are starting to outshine Hollywood's.

The first time anyone thought to connect Hollywood with a YouTube full of shoddy homemade content was in 2010. That year Brian Robbins, a well-known Hollywood director and producer, decided to invest US$1 million in turning Fred, a homemade web series that had been running on YouTube since 2005, into a feature film.

Fred began as a comedy web series written, directed by and starring Lucas Cruikshank, who was born in 1993. By 2009, the Fred channel Cruikshank created had more than 1 million subscribers. The episodes ran one to five minutes each, yet when the series was adapted into a film and shown on Nickelodeon, it drew nearly 12 million viewers, almost three times the audience of Smallville, then a hit.

The same year, Robert Kyncl, a former HBO executive and Hollywood veteran, left Netflix for YouTube. In October 2011 he announced that YouTube would spend US$100 million to create 100 original channels. The plan not only met its schedule but grew to US$200 million and 130 channels.

Fresh from the success of the Fred film, Brian Robbins joined the program. In July 2012 he started his own YouTube channel, AwesomenessTV, which reached 100,000 subscribers in a single month, the number they had set as their goal for the whole year.

That persuaded many Hollywood professionals to move over and pan for gold on YouTube. In September 2012, Turning Silverman, then a comedian of modest fame, and several other performers started the comedy channel Jash with YouTube's money, and it was a big success.

Ben Stiller, who can earn tens of millions in profit share for starring in a single film, had begun building his online influence through YouTube as early as 2009, and organized the shooting of the hit web series Burning Love.

Meanwhile, stars who became famous on YouTube began moving into Hollywood. Justin Bieber is the classic case. His manager found him after his videos took off on YouTube, and today he is a superstar earning more than US$80 million a year. Over time YouTube gathered its own stars who could rival Hollywood's, and in the eyes of some teenagers YouTube even comes out slightly ahead.

In a survey of "the 20 most popular celebrities among teens" that Vanity Fair ran last year, half came from YouTube, and YouTube stars took all of the top five places. Even US President Barack Obama, who has always cultivated a common touch, came to YouTube in January this year for a joint interview with three web celebrities.

YouTube's original-content program, together with the success of Netflix's move into its own series in the same period, also spurred the video sites that came later. Copying web series, bringing in studios and producing original shows have become standard practice at China's major video sites in recent years.

YouTube Turned Playing Games for an Audience into a Business

Of all forms of entertainment involving computers, games are surely among the most popular. And of all entertainment, film, television, music, sports and the rest, only games are rooted in the computer and grew up alongside it.

Around 2005, when YouTube was founded, game fans were already recording entertaining videos about games. James Rolfe, also known as the Angry Video Game Nerd, was one of the first. He began by posting his show AVGN, in which he plays early Nintendo games and rants about them, on Cinemassacre, the website of his own video studio. Encouraged by the response, he began updating YouTube regularly in 2006 and made it his career.

Rolfe's path, from posting videos on his own site to making YouTube his base, was typical of the first generation of game-video makers. With Google behind it, YouTube could afford to give creators free bandwidth, and as Google expanded around the world, their videos easily reached internet users everywhere.

In the lawless early days of video sharing, nearly all game-video makers did it purely for fun. But by reworking game content, they were in effect packaging gameplay and commentary into a new kind of entertainment show, one that served a particular audience and cost almost nothing to make. YouTube's generous ad revenue share gave these creators a reason to keep going.

In 2010, Felix Kjellberg, a 20-year-old Swede, began making game videos under the name PewDiePie. Five years later his channel was one of the most-subscribed on YouTube, with more than 36 million subscribers. According to Forbes, Kjellberg, just 25, can earn US$4 million a year.

Minecraft, the phenomenon released in 2009, deserves special mention. This indie sandbox game quickly came to dominate the gaming sections of the major video sites. Minecraft is like a set of virtual building blocks: players use their imagination to build all manner of strange structures. Countless videos of it were uploaded to YouTube, and those videos in turn drew more players to Minecraft. Only then did game videos finally become mainstream entertainment.

At the same time, as network infrastructure matured and bandwidth got cheaper, a new way to share games on video appeared: livestreaming. Twitch, a pioneer of live video founded in 2010, gathered a huge number of players in just four years, reaching 100 million unique visitors a month.

The authenticity and immediacy of game livestreams brought viewers closer to streamers. Streamers became the stars of the gaming world, with a fan economy like those in other kinds of entertainment. In 2014, Amazon's US$1 billion purchase of Twitch set off a rush among Chinese game-streaming sites to spend lavishly poaching streamers. Well-known streamers signed for as much as a million a year, no less than ordinary celebrities, and China's Douyu TV and YY Live both entered the new industry.

YouTube Spread Online Education

Salman Khan, founder of Khan Academy, began tutoring his niece remotely in late 2004 using Yahoo's Doodle notepad. After he discovered YouTube, he started recording his lessons as videos and uploading them, so students could watch whenever they had time.

As more and more people joined in, Khan's free online teaching project grew into the nonprofit Khan Academy. It is now the largest education channel on YouTube, with more than 2 million subscribers and more than 530 million views.

In 2006, videos of TED's live conferences went online for the first time. Today the TED channel has more than 3 million subscribers and dozens of sub-channels.

YouTube Changed What Ads Look Like

Advertising is a major reason users upload content. YouTube relies mainly on two Google ad systems, AdSense and AdWords.

YouTube was using AdSense even before Google bought it. Google built AdSense in 2003 as a pay-per-click ad system that gives publishers a share of ad revenue; figures disclosed in 2010 showed Google's revenue share could run as high as 68%. Ordinary YouTube users can also earn some income by linking an AdSense account. This is the foundation that supports the many businesses on YouTube. Social Blade estimates that DisneyCollectorBR, YouTube's highest-earning channel, may take in as much as US$23.4 million a year from its ad share.

AdWords, by contrast, is more a marketing tool. It helps YouTube users make their own video ads, which are matched with relevant channels and placed across YouTube so users can promote their videos. YouTube charges by the click and provides Google Analytics so users can measure how their promotion worked and target more precisely the next time.

While advertising holds up the YouTube community, YouTube is also changing the advertising business, having invented a range of ad formats.

Besides ad slots around the video, YouTube was the first to put ads inside videos. Along with the 30-second pre-roll ads that Chinese video sites also use, YouTube has TrueView ads, which viewers can skip after 5 seconds, and overlay ads that sit semi-transparently on top of the picture.

YouTube also commonly sells ads in the recommended-video slots on its homepage and invites brands to open their own channels. In 2009 it began putting shopping links beneath videos. By 2013, YouTube's global ad revenue had reached US$5.6 billion.

YouTube's ads also work slightly better than those of other social networks. A report last year by Aol Platforms analyzed how much each platform's ads influence consumers at different stages of a purchase decision. YouTube ads had the most influence at the first stage, and were also the most likely of any platform to push consumers to a "sole" purchase decision.

This is due not only to YouTube's video formats but also to the precise targeting of Google's ad system. In fact, Google ads ranked second only to YouTube in influencing the "sole" purchase decision. YouTube and Google serve relevant ads by analyzing data such as audience characteristics and viewing history, and research has shown this is the best way to make ads work better.

Cheaper Bandwidth, a Bigger YouTube

Today, YouTube's more than 1 billion users watch more than 6 billion hours of video a month, and views on a single day exceed 4 billion. Over the same ten years of YouTube's rapid growth, the price of moving data across the internet in the US fell more than 120-fold.

Video sites by their nature devour data. Users now stay on YouTube for only 8.51 minutes per visit, yet those under nine minutes generate as much as 40MB of traffic, dozens of times what a social network uses. Video services such as Netflix and Youku, which mainly buy long-form content, no doubt use even more.

Over the past decade, better internet infrastructure has cut the cost of running video sites, and the growth of video services has in turn pushed network operators to invest more in infrastructure.

The other technology that helped video services spread is the iPhone. Although it belongs to Google, YouTube met the mobile internet wave by attaching itself to Apple. It arrived on the first iPhone in 2007 along with Google's other services and stayed there as a preinstalled app until 2012, carrying it through the spread of smartphones.

By 2013, a report from Allot showed that YouTube had taken 13.6% of global mobile traffic and 68% of mobile video playback, a clear lead. In 2014, more than half of YouTube's views came from mobile devices, and its mobile revenue doubled from the year before.

Perhaps YouTube's only remaining problem is making money. According to a Wall Street Journal report in February, YouTube brought Google US$4 billion in revenue in 2014, up 30% from US$3 billion in 2013. Yet YouTube still does not turn a profit.

Ten years on, YouTube faces a very different landscape. Online video is splitting into ever more specialized niches. We see Twitch, focused on live game streams; Netflix and Hulu, focused on professional film and TV; MOOCs, whose format better suits teaching... and, of course, each of their counterparts in China.

At the same time, video is seeping into social services as a basic building block of content. Twitter built its own short-video service, Vine, and video takes up a growing share of Facebook, in both views and ad revenue.

Then again, these challenges are themselves a sign of YouTube's success. When Chen and his two co-founders started YouTube in 2005, they wanted to make uploading and sharing video simple, so that video could grow along with the spread of Flash, falling bandwidth costs and ever more recording devices. In ten years, YouTube did it.

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