[13/12/06: See update at the end]
Yesterday a friend asked me about my views on Google's acquisition of YouTube. My first response was to point him to my somewhat cryptic post on how YouTube became a destination. But then I thought that a more detailed account of my views was in order. Here it is.
How YouTube did it
As I described in my earlier post, YouTube's achievement was to overcome its initial role as a mere hosting service and become a desirable aggregate, a destination. By this I mean the following:
A hosting service
At first, YouTube was little more than a hosting service. By that I mean that it relied mainly on the following use-cases:
(1). First, a user somehow uploads a clip, and
(2). Finds out his clip's URL, which he passes along via email to a friend, on a blog, or a mainstream website
(2a). Another users follows this link and sees that she can use YouTube to share videos. Content begins to build up
(3). A second user follows the link passed on step (2) and, after watching the clip, also watches other related or recommended content promoted on the page.
A destination
The steps so far are trivial to facilitate: so far YouTube is only a hosting service, and this is in the realm of mere technology.
Getting users to following steps, however, is much trickier; it requires a destination and a brand, not just a service. This is the realm of media.
(4). The user likes the experience and associates it with the YouTube brand, which becomes linked to the kind of content found on the front page - quirky, miscellaneous and engaging. The user then comes back, and also mentions the brand to others. They all visit to the YouTube portal.
(5). These visitors to the YouTube front page are greeted with an engaging experience designed to persuade them to view some clips, and they enjoy the experience. This is accomplished through a combination of design and curated content - that is, through judicious aggregation (it doesn't matter if the mechanism is editorial or automatic; what matters is that the resulting experience is compelling).
(6). Visitors come to see YouTube as a way of getting exposure and upload more clips. Over time, content explodes.
Network effects
Once steps (4) to (6) have happened enough times, you have two things: a wealth of content, and a brand with a personality and an audience. Once this is in place, lots of other things can begin to happen:
(a) Brands can develop within the YouTube brand - like lonegirl15 - to which users return. 'Channel' URLs and RSS feeds help with this
(b) Because YouTube is itself a brand with its own style, mood and audience, attention-seekers (e.g. content owners) want in - not just because of the eyeballs, but also because of the associations
(c) Because of the sheer amount of content, the YouTube search box became a good place to start a search for any content you might want
(d) Social-network functionality becomes possible
What Google Video did wrong
Google Video failed to move from facilitating steps (1)-(3) to fostering steps (4)-(6), thus failing to build the crucial thick arrows in my diagram. The portal at first was appalling, and even now it leaves much to be desired. In their zest to give users "what they want" (via the search box), Google failed to see that what users 'wanted' (at least some users, at some times, in some moods) was to be told what to see. Put differently, they failed to see that aggregation is content. Or: Google insisted on being just technology and failed to play the media game.
YouTube's strengths
Now that YouTube is a successful destination, with a brand and endless content, its place is extremely strong vis-a-vis potential competitors in the same space. By 'space' I don't mean just functionality but also genre, audience and mood.
YouTube's limits
YouTube succeeded in becoming a media brand. In so doing it became associated with a certain type of experience and audience (quirky, miscellaneous, mainly young). There's nothing wrong with that - all destinations share this. But this identity also has its limits: YouTube is not a natural fit for, say, government information.
Note also that one of YouTube's strengths comes from point (c) above: the amount of content it hosts means that it is a good place to search for any kind of content - but not always. If and when good video search engines appear that can search across the web, this advantage will wither. Of course, now that Google owns YouTube this is less likely - but not impossible.
: Update 13/12/06: Mark Glaser (my emphasis):
“Featured Videos are not paid placements,” Nielsen said via email. “Our editorial team scours the site for the most entertaining, novel and unique content and they are the ones who decide which videos get featured.” [...]
The problem is that YouTube is not as transparent as it could be about what is featured on its home page, what slots are paid for, and what criteria it uses to choose the editorial picks. YouTube’s new parent company, Google, is famously tight-lipped about how it ranks search results, how it picks sources on Google News and other important decisions that affect the fortunes of many online businesses. YouTube considers itself to be an entertainment destination, taking Google further into the editorial realm.
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