YouTube's Two Kings

Headed down to Hotel Nikko last night to watch Wired Mag's editor, Chris Anderson, interview YouTube co-founders Steve and Chad. To be honest the interview wasn't really what I was hoping for -- it mainly consisted of questions on YouTube as a competitor to TV, copyright issues and monetizing their user base. I mean, here are two guys that created a 1.6 billion dollar company in 18 months -- surely that's the real story here.

A few interesting stats did come up -- YouTube is responsible for 60% of the traffic going through Comcast's infrastructure; every minute YouTube receives 6 hours of video; and uuhh they're big and stuff.

Probably the most interesting story in the rise of YouTube is the way users grabbed hold of it and shaped it into something they wanted. It's apparent that the founders didn't quite realize what they'd created until their users told them! Sure, they may have had the right ingredients but not necessarily the correct recipe. It would seem you can break down YouTube's initial success into three factors:

YouTube firstly took the pain out of uploading video. The transcoding software they licensed could take practically any video format at any size and spit it out as a standard Flash video. It's interesting to note this software is developed by the people behind the Flash video codecs and can be licensed by any company interested.

Secondly, the Flash player was based on a technology polite enough to not drill users on bandwidth and other technical details so many of the other video solutions require. Streaming turns out to be a pain in the ass, and YouTube avoided this, going for a 'fast-start' approach which allows dial-up users to (eventually) watch videos, as well as allowing multiple plays with no additional bandwidth overhead.

The final and probably most important ingredient was to make the video very accessible. YouTube videos sit on real pages instead of JavaScript driven pop-ups and can be embedded on any page on the web. This move would have initially seemed counterintuitive to their competition as YouTube wasn't and doesn't show ads before or after the video clip. In fact the reason they did this wasn't because they had the foresight to see the promotional opportunity the millions of burgeoning blogs could provide them, but in fact because the service was initially seen as a way for eBay sellers to provide video footage of their wares, and this would require the clip be embeddable in an eBay auction page. In fact Chad said YouTube now "[treat] the embeds as our marketing budget" which is great advice for those site that persist in locking video away in a pop-up context.