YouTube

Posted on March 15, 2014 by Blair Shulman

By Blair Shulman

Photo courtesy of techtipsworld.com [1]

YouTube, LLC

901 Cherry Ave.
San Bruno, CA 94066

Phone: +1 650-253-0000

Fax: +1 650-253-0001

www.youtube.com

A Brief History

It’s hard to believe that YouTube is only 9 years old. The video sharing website was created in 2005 by former PayPal co-workers Chad Hurley, Steve Chen and Jawed Karim. Little did they know it would go on to be the third most visited site in the world after Google and Facebook. YouTube’s first video clip was posted in April 2005 and by November, users were sending up to 8 terabytes of data per day (which is the equivalent of the entire contents of a Blockbuster store). [2] This attracted the attention of Google who paid $1.65 billion in stock for the company in the fall of 2006. By then, the site was gaining more than 700 million views a week. Today, more video content is uploaded to YouTube in 60 days than all three U.S. television networks have created in 60 years. [2]

Key Executives

Chad Hurley (Advisor and Co-Founder) [3]

Chad Hurley (Former CEO, Advisor and Co-Founder) [3]

Steve Chen (Co-Founder) [4]

Jawed Karim (Co-Founder) [5]

Susan Wojcicki (Chief Executive Officer) [6]

Financial Statistics

In 2006, YouTube officially became a subsidiary of Google, Inc. in a $1.65 billion deal. Although Google has never released any specific numbers in regards to YouTube’s revenues, they do release numbers about their own growth, revealing some information about YouTube’s results. On April 16, 2014, Google released financial results for the quarter ending March 31, 2014. According to Larry Page, CEO of Google, Google’s revenue was $15.4 billion, up 19 percent year on year. [7] Site revenue, which represents sites Google operates (like Google.com, YouTube, and Gmail), generated revenue of $10.47 billion, or 68 percent of total revenue. That’s a 21 percent increase over last year. Network revenue, aka “Adsense,” did $3.4 billion in revenue, a four percent increase over last year. [8] YouTube uses Google AdSense to generate their automatic media advertisements that are targeted to site content and audience on both their mobile and desktop sites. Another focus of the report was Google’s desire to develop advertisements that facilitate brand-building, in particular on YouTube. According to the Chief Business Officer of Google, Nikesh Arora, nearly all Super Bowl advertisers this year also had paid spots on YouTube. “We’ve seen a trend of brands coming over to YouTube as an addition to their TV campaigns,” Arora says, “The real fun will begin when people do brand building campaigns starting on digital, including YouTube. This is definitely the Holy Grail.” [9]

In The News

Susan Wojcicki Named New CEO of YouTube: Susan Wojcicki, one of Google’s earliest employees and former Senior Vice President of Ads and Commerce, became the new CEO of YouTube in February of 2014. The 45-year-old mother of four replaced Salar “SK” Kamangar, who was the CEO of YouTube for just over three years. Before that, Salar ran day-to-day activities at Google and took over the CEO position from YouTube co-founder Chad Hurley in 2010. [10] Kamangar now stands as the Senior Vice President of YouTube and Video for Google.

Photo courtesy of marketingland.com [16]

Wojcicki joined Google in 1999 as the 16th employee, becoming the search engine’s first marketing executive. [11] In her various positions at Google, Wojcicki has overseen product management of AdSense, Google Book Search and Google Video. Prior to Google, she worked at Intel, Bain & Co. and R.B. Webber & Co. [11] This move most likely signals a desire on Google’s part to start monetizing YouTube and its advertising content in a big way, since Wojcicki’s previous positions at Google have been centered around managing its entire ad sales department. In Google’s own statement, CEO Larry Page said, “YouTube is a billion person global community curating videos for every possibility. Anyone uploading their creative content can reach the whole world and even make money. Like Salar, Susan has a healthy disregard for the impossible and is excited about improving YouTube in ways that people will love.” [12]

Screenshot courtesy of makerstudios.com [12]

Screenshot courtesy of makerstudios.com (click to enlarge) [15]

Disney Buys Maker Studios: The Walt Disney Company completed a deal on March 24, 2014 to pay $500 million to acquire Maker Studios. The deal could end up closing for as much as $950 million if specific growth targets are met by Disney. [13] Maker Studios is a YouTube multi-channel network that produces high-quality videos for some of the most “YouTube famous” users on the site such as PewDiePie and channels such as Epic Rap Battles of History. [13] Financed by venture capitalists and grants from YouTube, Maker Studios now operates over 55,000 channels, boasts 380 million subscribers and 5.5 billion views per month. [14] It’s not unclear why Maker Studios looked desirable to Disney. The YouTube video supplier can help promote Disney’s many characters and franchises to a young target audience. Maker can also serve as an example of how to successfully interact with the “raised-on-the-Web” generation. [13] When Maker succeeds, YouTube succeeds as well. This recent acquisition was a huge win for the YouTube, Maker and Disney families.

Turning YouTube Stars Into Real Celebrities: Welcome to the next major evolution of YouTube’s business. New YouTube CEO Susan Wojcicki has helped to devise a plan to propel YouTube users to the next level of stardom. YouTube is chock full of “stars” who broadcast their content to thousands of loyal subscribers every day. But how many of these stars can the public actually put a name and a face to? That’s why YouTube is spending millions on advertising to overcome this awareness challenge. Popular YouTube users will now be getting their own promotional TV spots and premium-priced ad rates as part of an effort to package online video stars like traditional TV celebrities. [17] The first stars to get the ads will be chef Rosanna Pansino and beauty gurus Michelle Phan and Bethany Mota. The ads will be shown on networks like The CW and ABC Family, local TV and billboards in New York and Chicago, Teen Vogue, Seventeen, Entertainment Weekly and even in NYC subways. [18] The ads are being developed by ad agency Co:Collective. One challenge Wojcicki notes is “trying to get advertisers who traditionally bought TV to understand the YouTube platform.” [18] But Wojcicki believes in patience, hard work and continual growth. “As the platform matures and we have better monetization, we want to be able to continue to grow the whole ecosystem in a way that’s good for advertisers, good for publishers and good for users,” Wojcicki said. [18]

YouTube user Michelle Phan’s homepage, boasting more than 6 million subscribers

Sources:

[1] YouTube Company Logo, techtipsworld.com, RT: 4/12/14

[2] “Brief History YouTube”, time.com, RT: 4/12/14

[3] Photo of Chad Hurley, politic365.com, RT: 4/12/14

[4] Photo of Steve Chen, twitter.com, RT: 4/12/14

[5] Photo of Jawed Karim, commons.wikimedia.org, RT: 4/12/14

[6] Photo of Susan Wojcicki, hub.jhu.edu, RT: 4/12/14

[7] “Google Inc. Announces First Quarter 2014 Results“, investor.google.com, 4/16/14, RT: 4/19/14

[8] “Google misses Q1 2014 earnings with $15.42 billion in revenue“, arstechnica.com, 4/16/14, RT: 4/19/14

[9] “Despite 19% Revenue Growth, Google Q1 Earnings Disappoint Investors“, forbes.com, 4/16/14, RT: 4/19/14

[10] “YouTube’s Chad Hurley to step down as chief executive“, theguardian.com, 10/29/10, RT: 4/19/14

[11] “Google Names Susan Wojcicki CEO of YouTube“, variety.com, 2/5/14, RT: 4/19/14

[12] “Google Confirms Ads & Commerce SVP Susan Wojcicki Is The New YouTube CEO“, techcrunch.com, 2/5/14, RT: 4/19/14

[13] “Disney Buys Maker Studios, Video Supplier for YouTube“, nytimes.com, 3/24/14, RT: 4/19/14

[14] “With Disney Buying Maker, Do All Big Media Companies Need To Up Their YouTube Game?“, forbes.com, 4/1/14, RT: 4/19/14

[15] Screenshot of Maker Studios website, makerstudios.com, RT: 4/19/14

[16] Photo of Susan Wojcicki’s tweet after being appointed CEO of YouTube, marketingland.com, 2/5/14, RT: 4/19/14

[17] “YouTube’s Big Plan to Turn Its Stars Into Real Celebrities“, wired.com, 4/16/14, RT: 4/19/14

[18] “Exclusive Interview: Susan Wojcicki’s Plan to Make YouTube ‘Stars’ Real-Life Famous“, adage.com, 4/14/14, RT: 4/19/14

Relativity Media

Posted on March 15, 2014 by Alexandra Romano

–Relativity Media Logo–

Relativity Media, LLC

9242 Beverly Blvd.
Suite 300
Beverly Hills, CA 90210
310.724-7700

History

Founded in 2004, Relativity Media began as a mediator between studios and investors to arrange film deals. Since then, it has become a full-scale film studio that has produced critically acclaimed films such as “The Fighter”, and “The Social Network.” In addition to being involved in the production, financing and or distribution of over 200 films, Relativity has divisions in television, sports, music fashion and digital media–truly establishing the company as a next-generation studio. [1]

LEADERSHIP

Ryan Kavanaugh–CEO, Relativity Media

Ryan Kavanaugh founded Relativity in 2004, and has had an active role in its transition into a film studio and beyond. Kavanaugh began his career in Hollywood aiding in the finance for companies such as Universal, Sony and Warner Bros. His experience in film finance has allowed Relativity to produce well-performing films on lower budgets [2]. Under his leadership,Relativity Media has produced over 200 films for a return of over $17 billion in revenue and 60 Oscar nominations [3].

Tucker Tooley, President-Relativity Media

Happy Walters, Co-Chief Operating Officer-Relativity Media

Robbie Brenner, President of Production-Relativity Media

FINANCIALS

Relativity Media is a privately owned company, however its current projects and investments indicate its financial success. As stated before, the company has earned over $17 billion dollars through film productions. With this revenue, Relativity has been able to establish itself in other sectors that have contributed to its financial standings. In September of 2013, Relativity announced it would be creating a fashion division called M3/Relativity [4], in which Relativity would act as a representative for various members of the fashion industry from designers to make up artists. The company also has a sports division [5], in which it represents athletes such as Dwight Howard and David Ortiz.

On March 26th, 2014 Relativity acquired a share of Downtown Records [6] in which Relativity would invest in Downtown to sign new artists and expand their label, as well as to help the record label to share in Relativity’s global success. Most recently on April 14th, 2014, Relativity put in a bid of $500 million to acquire Maker Studios, and nearly $1.1 billion in stock. Founded in 2009, Maker Studios is a short form, online video platform and production company that targets younger audiences and the demand for online content [7]. Though Maker Studios had already approved a merger with Disney, executives at Relativity continue to show their eagerness to create new, exciting forms of content that further enforces Relativity’s brand not only creatively but monetarily as well.

TELEVISION

Relativity Media has also begun to break the mold by establishing a television branch in 2008 called RelativityREAL, which was recreated as Relativity Television in 2013.The television division led by CEO Tom Forman had originally produced exclusively unscripted content, but is now in the development stages of producing comedies and dramas [8]. Amongst its programming is one of the most wildly popular reality series on television, “Catfish.” “Catfish” follows Nev Shulman, producer of Catfish: The Movie, on his quest to help those who are in online relationships find the truth behind the computer screen. The third season of Catfish is set to premiere May 7th, 2014 on MTV, and is expected to do as well in ratings as “Catfish: Season 2”, which reached the number one spot in the 12-34 demographic in June 2013 [9].

Nev Shulman: Host and Executive Producer of MTV’s “Catfish”

FILM

Relativity Media’s film division is the largest sector of the company, and is responsible for films such as the Nicholas Sparks penned-hit “Safe Haven” and war-time drama thriller “Act of Valor” both of which earned about $70 million each in the domestic box office [10].

“Oculus” In Theatres Now

For 2014, Relativity has done well in the box office. “Oculus”, the horror thriller, has earned over $21 million with a $5 million budget since its April 11th release [11]. Considering its low budget and competition with blockbusters such as “Rio 2” and “Captain America: The Winter Soldier”, “Oculus” is receiving immense success this spring season.

In addition to “Oculus”, Relativity was moderately successful with “3 Days to Kill” which earned about $36 million world wide on a $28 million budget and stars Academy Award winner Kevin Costner [12].

The future of Relativity’s Film division is rather promising. On April 25th 2014, Relativity will release “Brick Mansions”, a dystopian action thriller starring late Paul Walker in one of his last performances, and has been much anticipated by viewers.

DIVERSITY IN FILM [13]

Relativity Creative Executive Josh Reinhold believes the upcoming projects will establish them as a main competitor in the entertainment industry. He believes that Relativity is on the forefront of producing films with diverse casts whom tell a story that more than just the majority can enjoy and relate to.

Discussing plans for Relativity to establish its own “arthouse” film division 278 Films (name in development), Reinhold believes this will open the doors for stories that “hasn’t been told before.” One of these stories takes the form of an upcoming film titled “Desert Dance”, which tells the story of a young Iranian man whom is threatened by his government for doing the thing he loves, which is to dance. Reinhold believes the value in films such as “Desert Dance” (undated), is that there are many other audiences to reach that will fall in love with the characters and make a meaningful connection with them.

Another film Reinhold feels will break the mold is “Blackbird”, which is set for a November 14th 2014 release. The film depicts the struggle of a young African-American woman as she begins her career in the music industry, and was written by Gina Prince Blythewood (author of “Love & Basketball”). Of “Blackbird” and “Desert Dance”, Reinhold said: “Seeing how Hollywood will have to shift in the way they cast actors and diversify stories is inspiring” [13].

SOURCES:

[1] http://www.relativitymedia.com/About.aspx DATE ACCESSED: April 12th, 2014.

[2] http://www.forbes.com/sites/dorothypomerantz/2013/04/17/why-ryan-kavanaugh-is-now-the-most-watched-man-in-hollywood/ DATE ACCESSED: April 18th, 2014

[3] http://www.relativitymedia.com/About.aspx (Ryan Kavanaugh CEO Bio) DATE ACCESSED: March 31st, 2014

[4] http://www.hollywoodreporter.com/news/relativity-media-moves-fashion-representation-625951 DATE ACCESSED: February 19th, 2014

[5] http://www.relativitysports.com/ DATE ACCESSED: April 20th, 2014

[6] http://www.billboard.com/biz/articles/news/record-labels/5944964/relativity-media-acquires-stake-in-downtown-records DATE ACCESSED: April 12th, 2014

[7] http://variety.com/2014/biz/news/relativity-offers-up-to-900-million-for-maker-studios-in-bid-to-outflank-disney-1201156736/ DATE ACCESSED: April 15th, 2014

[8] http://www.relativitymedia.com/RelativityTV.aspx DATE ACCESSED: April 15th, 2014

[9] http://www.realitytvworld.com/news/mtv-announces-premiere-for-third-season-of-catfish-tv-show-16155.php DATE ACCESSED: April 15th, 2014

[10] http://boxofficemojo.com/

DATE ACCESSED: April 20th, 2014