The Founders

Current Key Executives

YouTube Overview & History

YouTube is a worldwide video sharing company, which was launched in April 14, 2005 by three former PayPal employees [4].  Soon after their launch, Google purchased the company for $1.65 billion, making it the most expensive acquisition for Google at that time [5].  YouTube now operates as a subsidiary of Google.  Since it’s launch, YouTube popularity has skyrocketed, serving as the premier destination to post videos, and creating a network of channels with a significantly easier barrier of entry compared to more established mediums.  Youtube has positioned itself as a significant competitor to traditional media, with the coveted 18-49 year-old market accessing YouTube’s mobile site than any cable television network [6].  Many established networks and personalities now use YouTube as an extension to reach a much wider audience, such as  The Ellen Show and The Tonight Show Starring Jimmy Fallon.  With YouTube’s massive popularity, especially with the younger demographic, much of the company’s recent actions focus on profiting on their large user base.

Finances

While Google is a publicly traded company, it is unclear what effect YouTube has on their stocks.  Google has never released the earnings of YouTube and many have speculated that the web service has focused on building a strong user base rather than creating a profit [11].  Despite YouTube announcing it’s paid subscription plan, YouTube Red, a vast majority of YouTube’s revenue comes from advertisements, taking 45% of profits from every video allowing ads [12].  However, within the past few months, Google’s stock (now known as Alphabet, but still retaining the GOOG stock market tag) has fluctuated wildly especially with the April release of their First Quarter 2016 results, reporting a disappointing net income of $5.25 billion [13].  These earnings were more than $310 million less than average expectations, causing nearly a 5% drop in stock within 24 hours of the earnings release.  Much of this can be attributed to spending that increased nearly 27%, focusing on improving YouTube’s servers and content acquisition for YouTube Red that was released in February 2016 [14].  While these numbers might be disappointing, the company seems to be doubling-down on its approach to attract viewers now, and worry about profits later, and it does seem unlikely that this will have a lasting effect on Google’s entire stock.

YouTube Red

YouTube Red, announced in late 2015, was the company’s attempt to launch into the paid subscription market.  For $9.99/month users are able to view videos without advertisements, download videos, receive a free subscription to Google Music, and gain exclusive content [15].  While there was some controversy, YouTube released the first round of their exclusive content, to very mixed results, in February 10, 2016.

A Trip To Unicorn Island

YouTube Red’s first documentary, A Trip to Unicorn Island focuses on YouTube star Lily Singh and is produced by Astronauts Wanted.  The piece focuses on Singh, holder of the YouTube account ||SuperWoman|| with more than 8 million subscribers, during her first worldwide tour [16].  The documentary is clearly targeted at her tween fanbase as she delves into her struggle with depression and preaches self-acceptance.  However, mainstream media has given the piece little to no attention and currently holds a 4.2 rating on IMDb [17].

Dance Camp

Taking from the success of made-for-tv Disney films such as High School Musical, Dance Camp is a teen musical featuring songs created by YouTubers themselves [18].  Similarly to A Trip to Unicorn Island, YouTube’s first foray into the musical world has received essentially no professional press, as has user reviews hovering around 3.5 [19].

Scare PewDiePie

This web series centers the most subscribed YouTuber, Felix Kjellberg, otherwise known as PewDiePie, as he navigates different sets inspired off popular horror video games.  The show format mimics what made his channel so popular; commentating and screaming the more terrified he becomes.  His name popularity seems to have garnered some of the most press as well, with episode seven offered to the public for free amassing nearly 24 million views [20].

Lazer Team

The most “traditional” offering of YouTube Red is Rooster Teeth‘s Lazer Team, which prior to appearing on Red’s lineup received an actual theatrical release in late January [21]. The film created notoriety in the Summer of 2014 when it received nearly $2.5 million in a crowdfunding campaign on Indiegogo [22].  The internet company Rooster Teeth has had a very close relationship with YouTube over the company’s life cycle, so it isn’t surprising that the sci-fi movie was brought to YouTube instead of a more traditional physical DVD release.  The movie also brings some credibility to the subscription service, since it is the only content to receive enough professional reviews to warrant a Metacritic score, receiving “mixed or average reviews” with a 42% [23].

The Future

While YouTube Red’s offerings have received very mixed critical reception, the company has plans to release much more content within 2016.  This new content seems to branch out into new demographics, while still maintaining headlining YouTube stars such as Bad Internet written by College Humor and reality show Prank Academy starring PrankVsPrank, which was just began releasing episodes in April [24].  Much of this content targets YouTube’s very young demographic, and while it might attract viewers, it still remains to be seen if they have the capital to spend $10 every month for YouTube Red, especially when Netflix and Hulu‘s offerings seem to be much more well-received.

Live and 360 Video

Despite the fact that YouTube has had a chokehold in streaming archived video, the company has fallen behind in the live-streaming market.  Streaming services such as Twitch, Periscope, and even Facebook Live might not necessarily have the numbers that YouTube does, but it has left YouTube with a significantly smaller portion of that market.  To combat this, YouTube released YouTube Gaming in August 2015 to combat Twitch, and continues to expand into the live video world [25].  According to a report by VentureBeat, Google might soon be entering the mobile market as well with an app called YouTube Connect, which would directly combat the popularity of Periscope [26].  YouTube was also the host of the first live-streamed event in the 2016 election cycle, with stars interviewing candidates live onto the website [27].

On April 18, YouTube also announced that it would combine live streaming with some of its newest technology: 360 degree video [28].  The company also announced that it would immediately begin to introduce spatial sound recognition into it’s 360 video, creating a more immersive sound experience.  The effect of this announcement was released to the public during Coachella 2016, where artists such as Matt & Kim and Open the Gates was live-streamed to the public with 360 degree video [29].

As the cost of producing 360 degree-quality videos has reduced in price, YouTube has put capable cameras in all of their creative studios, allowing use for all YouTube content creators [30]. While the effects of this announcement are already being felt, this could also have massive implications for the virtual reality world, where live-streaming has never been compatible with the new technology, but now could be when paired with Google’s own Google Cardboard VR device.

Works Cited

[1] YouTube Logo. Digital image. YouTube. Google, n.d. Web.

[2] Susan Wojciki. Digital image. Twitter. Twitter, n.d. Web.

[3]  Robert Kyncl. Digital image. Twitter. Twitter, n.d. Web.

[4] Hopkins, Jim. “Surprise! There’s a Third YouTube Co-founder.” USA Today. N.p., 11 Oct. 2006. Web. 25 Apr. 2016.

[5] Associated Press. “Google Buys YouTube for $1.65 Billion.” NBC News. N.p., 10 Oct. 2006. Web. 25 Apr. 2016.

[6] Google. “YouTube Statistics.” YouTube. YouTube, n.d. Web. 25 Apr. 2016.

[7] Google Logo. Digital image. Crunch Base, n.d. Web.

[8] Chad Hurley. Digital image. Bio.com. A&E Networks Television, n.d. Web.

[9] Steve Chen. Digital image. Bio.com. A&E Networks Television, n.d. Web.

[10] Jawed Karim. Digital image. Wikipedia. Wikipedia, n.d. Web.

[11] Oreskovic, Alexei. “How Much Money Does YouTube Make? Don’t Ask the New CFO.” Business Insider. Business Insider, Inc, 16 July 2015. Web. 25 Apr. 2016.

[12] Edwards, Jim. “The Biggest Stars on YouTube Make Huge Incomes … Yet They Can’t Keep the Vast Majority of It.” Business Insider. Business Insider, Inc, 03 Aug. 2015. Web. 25 Apr. 2016.

[13] “Alphabet Investor Relations.” Alphabet Investor Relations. Alphabet, Inc., 21 Apr. 2016. Web. 25 Apr. 2016.

[14] Owens, Jeremy. “Google’s Big Plans for YouTube and Cloud Lead to Big Spending.” MarketWatch. N.p., 22 Apr. 2016. Web. 25 Apr. 2016

[15] Google. “YouTube Red.” YouTube. YouTube, n.d. Web. 25 Apr. 2016.

[16] Lenker, Margert. “YouTube Fans See a Different Side of Lilly Singh in YouTube Red’s ‘A Trip to Unicorn Island’.” Variety. N.p., 11 Feb. 2016. Web. 25 Apr. 2016.

[17] “A Trip To Unicorn Island (2016).” IMDb. IMDb.com, n.d. Web. 25 Apr. 2016.

[18] Spangler, Todd. “‘Dance Camp’: YouTube’s First Movie Has More Adult Themes Than Disney Musicals.” Variety. N.p., 12 Oct. 2015. Web. 25 Apr. 2016.

[19]”Dance Camp (2016)” IMDb. IMDb.com, n.d. Web. 25 Apr. 2016.

[20] PewDiePie. “LEVEL 7 | I’M NOT CRAZY (OUTLAST IRL GAMEPLAY).“YouTube. YouTube, 10 Feb. 2016. Web. 25 Apr. 2016.

[21] Brouwer, Bree. “Rooster Teeth To Release ‘Lazer Team’ In Theaters, On YouTube Red On January 27 – Tubefilter.” Tubefilter. N.p., 15 Dec. 2015. Web. 25 Apr. 2016.

[22] “Lazer Team by Rooster Teeth.” Indiegogo. N.p., n.d. Web. 25 Apr. 2016.

[23] “Lazer Team.” Metacritic. N.p., n.d. Web. 25 Apr. 2016.

[24] “Get Your Popcorn Ready! Our First YouTube Red Originals Are Now Available.” Official YouTube Blog. YouTube, 10 Feb. 2016. Web. 25 Apr. 2016.l

[25] Sarkar, Samit. “YouTube Gaming Launches Aug. 26 with Website and Mobile Apps.” Polygon. N.p., 25 Aug. 2015. Web. 25 Apr. 2016.

[26] Yeung, Ken. “Google Is Building YouTube Connect, a Livestreaming App to Take On Periscope.” VentureBeat. N.p., 23 Mar. 2016. Web. 25 Apr. 2016.

[27] “YouTube Creators Live From Tomorrow’s #DemDebate.” Official YouTube Blog. Google, 16 Jan. 2016. Web. 25 Apr. 2016.

[28] “One Step Closer to Reality: Introducing 360-degree Live Streaming and Spatial Audio on YouTube.” Official YouTube Blog. Google, 18 Apr. 2016. Web. 25 Apr. 2016.

[29] Philips, Amy, and Noah Yoo. “YouTube Launching 360-Degree Live Streams With Coachella 2016.” Pitchfork. N.p., 16 Apr. 2016. Web. 25 Apr. 2016.

[30] Popper, Ben. “YouTube Introduces Live 360 Video, the Gateway Drug to Virtual Reality.” The Verge. N.p., 18 Apr. 2016. Web. 25 Apr. 2016.

[31] A Trip To Unicorn Island Poster. Digital image. Punjab2000. N.p., 12 Feb. 2016. Web. 25 Apr. 2016.

[32] Scare PewDiePie. Digital image. IMDb. N.p., 10 Feb. 2016. Web.

[33] Lazer Team. Digital image. IMDb. N.p., 10 Feb. 2016. Web.

[34] YouTube Gaming Logo. Digital image. PC Advisor. N.p., n.d. Web.