YouTube has become synonymous with online video, but the now-ubiquitous video sharing platform struggled to take off after its founding in 2005. Through constant evolution and innovation, YouTube overcame a slow start to become one of the most influential and culturally significant internet companies in the world.
The Founding of YouTube (2005)
YouTube was founded in February 2005 by three early PayPal employees – Chad Hurley, Steve Chen and Jawed Karim. The founders created YouTube with the goal of providing a convenient platform for sharing user-generated video content on the web.
The domain "YouTube.com" was activated on February 14, 2005 – just in time for Valentine‘s Day as the founders were hoping to catch eyes with their new venture. According to Jawed Karim, the inspiration for YouTube‘s name came from the phrase "Tune in to You" along with the popularity of yourtube.com for tube-shaped TV screens at the time.
Early Struggles and Traction (2005-2006)
Despite high hopes, YouTube struggled to gain traction after its official launch in December 2005. The site was receiving only a few thousand views per day. With limited venture capital funding, the founders resorted to splitting their time between building YouTube and working day jobs to make ends meet.
The turning point came in the summer of 2006. The site experienced rapid growth as uploads increased from 15,000 to 65,000 videos per day over the summer. Viewership took off as well, with YouTube serving around 100 million video views per day by mid-2006.
This growth was fueled by increased broadband penetration and online video marketing by brands like Nike, Victoria‘s Secret and McDonald‘s. The viral nature of YouTube‘s sharing and embedding features allowed videos to spread rapidly across the web.
Acquisition by Google (2006)
Thanks to its soaring viewership and cultural buzz, YouTube caught the attention of major tech companies interested in getting into online video. After Yahoo and Microsoft expressed interest, Google ultimately beat them to the punch by acquiring YouTube in October 2006 for $1.65 billion in stock.
At the time, YouTube had 72 employees serving over 100 million views a day. Google‘s acquisition provided the resources and infrastructure to support YouTube‘s continued explosive growth. It also gave Google a foothold in the online video space that would later prove central to their advertising business.
Evolution into a Media Giant (2007 – Present)
With Google‘s backing, YouTube began evolving beyond its roots as a user-generated video destination. In 2007, YouTube launched its Partner Program which allowed popular creators to earn a cut of revenues from ads placed on their videos.
YouTube also started experimenting with premium content beyond user uploads. In 2007, YouTube struck deals to host TV shows and movies from major media companies like CBS, BBC, Universal Music Group, Sony Music and more.
The site also became more advertiser-friendly with the introduction of skippable pre-roll ads in mid-2007. This gave brands a way to advertise to YouTube‘s growing audience.
Here are some other major developments at YouTube over the years:
Live streaming – YouTube added live streaming capabilities in 2011. Major events like Felix Baumgartner‘s stratospheric space jump were live streamed on YouTube to millions of viewers.
1 billion users – By 2013, YouTube had over 1 billion unique monthly visitors according to Nielsen ratings. This made it the first site to cross this milestone.
Mobile – Views on mobile devices exceeded desktop views for the first time in 2015. Over 70% of current YouTube watch time now happens on mobile.
YouTube Kids – YouTube launched a dedicated Kids app in 2015 offering age appropriate videos.
YouTube TV – In 2017, YouTube launched its own live TV streaming service providing an alternative to cable.
Premium subscription – YouTube Red launched in 2015, offering ad-free viewing and original content for a monthly fee. It was rebranded to YouTube Premium in 2018.
Today, over 2 billion logged-in users visit YouTube each month. The platform has expanded far beyond viral videos to offer a massive library of TV shows, movies, music videos, educational content and more. Over 1 billion hours of video are watched on YouTube daily.
The growth of YouTube‘s state-of-the-art recommendation algorithm also allows the platform to serve personalized content at scale. Around 70% of time spent on YouTube is driven by algorithmic recommendations versus direct searches.
Challenges and Controversies
With great scale comes great responsibility. As one of the largest user generated content platforms, YouTube has also had to grapple with content moderation, copyright issues and controversies around inappropriate videos.
YouTube has constantly tweaked its policies and enforcement mechanisms around copyright, hate speech, misinformation, kid safety and more. But with over 500 hours of video uploaded every minute, eliminating problematic content at scale remains an endless challenge.
Controversies like Logan Paul‘s 2018 video shot in Japan‘s "suicide forest" exposed brands to negative associations with unsuitable YouTube content. This led companies like AT&T, Nestle and Epic Games to pause advertising on the platform.
Balancing the interests of creators, users, advertisers and society at large remains a delicate balancing act for YouTube. But the platform continues to invest heavily in human content moderators and AI algorithms to better police the endless flood of incoming videos.
YouTube has come a long way from the days of cat videos and viral clips. The platform is now an integral part of the internet‘s media ecosystem and continues to shape culture around the world.
YouTube is primed to benefit from the growth of internet video. According to eMarketer, US adults will spend over 1 hour 17 minutes per day watching digital video in 2022. YouTube aims to be the premier destination for this demand.
Investments in original programming also place YouTube in closer competition with Netflix and Prime Video. Just as YouTube redefined television for a new generation, its evolution now threatens to disrupt the streaming landscape.