“User” Generated Content and YouTube

YouTube has been getting a lot of press lately, both for its runaway success as well as for the real sources of its vast video library.  Rated as a top 20 destination on the Web, YouTube serves up at least a whopping 70 million videos a day to its users and also has over 60,000 new videos uploaded every 24 hours.  Founded by former Paypalers Steve Chen and Chad Hurley, YouTube is about as classic a Web 2.0 play as you could describe:  Not only does it harness the collective intelligence of the Web, a charming if slightly obtuse turn of phrase Tim O’Reilly uses to describe the core of the Web’s next generation, YouTube is also a relatively open platform for video sharing.  They make it possible for anyone to share YouTube’s videos just about anywhere else on the Web.

In fact, to see how well YouTube works, I signed up for an acocunt and had the video below, which I located on YouTube about last year’s Web 2.0 Conference (props to Alexander Muse for a pretty darn good production), cross hosted right here in this blog post.  It took all of 2 minutes from beginning to end, from signing up and to starting to share.  Like TechCrunch’s Michael Arrington recently wrote, YouTube makes video sharing really, really simple, and that’s a not-to-be-underestimated ingredient in their success.

Applications as Platforms: Using YouTube to Share Video Anywhere

And you don’t have to go searching far to find out that YouTube is #1 site on the Web for sharing online video, with most citations saying that they currently have about 42% of the market, making them bigger than network television in viewership.  Also, YouTube has surprisingly low infrastructure costs to deliver all this content, say compared to a cable television company, using only about a million dollars in bandwidth a month according to Forbes.   TV production firms would kill for overhead as low, never mind audience that large.

But it’s not all paradise in Web 2.0 land.  YouTube is struggling to find its stride in generating revenue from the incredible number of viewers it’s currently supporting.  Hosting banner ads isn’t likely to turn the massive amount of online traffic YouTube receives into a significant revenue stream.  This is the classic “how do you make money from non-paying Web traffic” issue that many Web 2.0 watchers find troubling from a successful business model point of view.  Furthermore, YouTube has potentially serious legal problems and is being sued by the the RIAA and others for copyright infringement.  The problem? Though it limits clips to 10 minutes to prevent the sharing of movies and entire TV shows, and removes copyrighted content on request, many have raised the issue that YouTube’s success might be largely from non-user generated sources, i.e. commercial copyright content.

Folks like John Battelle believe the popularity of YouTube “proves that our culture wants desperately out of the traditional model of force fed television, and wants to move to a model where we participate in it – indeed, where we remix and share it. But change takes time.” Giving users everything and anything what they want is certainly part of the key here.  And I think YouTube, like MySpace, is an excellent example that if you balance the various ingredients of an architecture of participation carefully and tune it so that you maximize feedback loops, incredible things can happen in a very short time.  In the end, YouTube does demonstrate the forces of disruption that are possible by applying Web 2.0 principles effectively.  Now the hard part comes, making it something more than a “clever contraption”, as Rob Preston at InformationWeek calls these types of non-financial Web 2.0 success stories.

What do you think? Did YouTube actually bootstrap its traffic on copyrighted content?  And when push comes to shove, can it truly thrive on user generated content alone?

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