John Paczkowski

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YouTube Founders Chad Hurley and Steve Chen

Steve Chen and Chad Hurley

To our industry, YouTube is a bright-shiny object.” 

–Anonymous media executive, 2006 Digital Hollywood conference

When rumors of a YouTube acquisition began to circulate in 2006, conventional wisdom had it that the company was a bad case of buyer’s remorse waiting to happen, a start-up whose business model seemed to be built from the ground up on liabilities. As entrepreneur Mark Cuban once said, “Only a moron would buy YouTube.”

Of course, as often as not, conventional wisdom is wrong. The moron to which Cuban referred turned out to be Google. Still, YouTube continues to be surrounded by controversy, pursued by content providers concerned about the massive amount of copyrighted materials YouTube users can access for free today.

  • 9:30 a.m. Session begins with another video. Wacky. Walt notes it has higher production values than most YouTube videos.
  • Hurley: When we started this company a few years ago, we never expected to be here. It’s interesting how this simple idea, improving our own video experience online, turned into this.
  • 9:35 a.m. On the Apple TV deal: Is this a departure for YouTube, moving to a different screen? Hurley: Not really. We’d already been looking at opportunities in the mobile market. … He explains that Apple reached out to them because it knew it had APIs already available.
  • Walt wonders how YouTube-quality video will hold up on larger screens. Chen says it looks a lot better than you’d think. The caveat: It really depends on the original quality of the video.
  • How much of YouTube’s content is longer-form video serials, things like Hurley says most of it is short: two to three minutes in length. “We are seeing higher and higher quality videos coming online. … There are more independent filmmakers using us as a distribution medium.”
  • 9:40 a.m.: On the EMI deal: “This isn’t just about music videos. It’s about creating new market opportunities. Giving users new ways to be creative, to add music to their home videos.”
  • 9:45 p.m. People say we haven’t been proactive about developing content management and identification tools, Hurley claims. But really, we’re leading the industry. … We do a good job of educating users about copyright law.Walt interrupts: whoa, whoa, whoa … I’m on YouTube all the time and I’ve never seen anything educating users about copyright. Where is it?

    Hurley: It’s there …

    Walt: It’s there because your lawyers told you to put it there.

    Chen mutters something about being industry leaders in copyright education.

    Walt: So you’re dead serious about resolving these copyright issues? Then why are you being sued for a billion dollars?

  • Is your business viable without copyrighted content? Hurley says yes: YouTube is about user-generated video. The marketing side of the content industry loves us, he says. … “They go upload stuff to the site, and then the next day we get a call from the lawyers telling us to take it down.”
  • 9:50 a.m.: Walt: Do you think that you’re just the flavor of the month? There’s a strong tendency in this industry to take a hot business and inflate its importance 100-fold.Hurley: We’ve been around for a while, so it’s been a very long month for us. …We see our technology as a platform for other things.

    Chen sees longevity in the service: I see our service as one that’s been needed for a long time, the pieces to make it all happen just weren’t in place until we came around.

  • Will the proliferation of video on the Web erode YouTube’s current dominance? Will YouTube always be a destination? Hurley says there will always be room for lots of players in the video space.
  • 9:55 a.m.: Chen stressing YouTube as a platform, one that will expand to mobile devices, the living room etc.
  • Can filmmakers make money using the Internet as an exclusive distribution platform? Hurley: I think we’re in the very early days of someone being able to support themselves with Internet distribution.
  • 10 a.m.: Chen on video ads: We need a merger between advertising and entertainment. As long as the advertisement is entertaining, people will click on it.
  • When will YouTube roll out in-video advertising? Soon. Hurley says people would have to opt into the experience, then they’d be paid, likely through Google AdSense.
  • 10:05 a.m.:Q&A:
  • Q. Are YouTube viewers duped by advertising masquerading as amateur content? It’s a question of trust, Chen says, and an individual decision. Bottom line: Let informed users decide.
  • Q. Five years from now, what will be the percentage breakdown of videos by amateur/professional categories on YouTube? Hurley responds (again) that there will be increased blurring between amateur/pro production. “We’ve become more than entertainment destination,” Hurley says–not only for networks, but others. It raises ratings and serves as a great promotional platform, he adds.

Chad Hurley and Steve Chen Session Photos

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