Although Google’s motto is “don’t be evil”, the setting couldn’t more closely resemble a Bond villain’s lair. Amid rolling English countryside in the county of Hertfordshire, a country house hotel is playing host to the company’s Zeitgeist conference. Inside, shifty-looking men in dark suits whisper into their sleeves as they coordinate the arrival of luminaries including British Prime Minister Gordon Brown and Queen Rania of Jordan. Journalists are not allowed to walk around unaccompanied. And everything is decked out in the obligatory upmarket dotcom dressing — predominantly white, with the odd discreet Google logo. Free smoothies and Green & Black’s chocolate are available.
Only Google would go to so much trouble to gather business executives from around the world in one place to talk global economics and green issues, when almost all of them look as though they’d rather be staring at their PCs and munching pizza. The YouTube founder and chief executive, Chad Hurley, is the exception — polite, down to earth and diffident but no stereotypical geek. Dressed casually but stylishly, he has a slightly earnest manner that betrays the fact that the next 12 months are crucial for YouTube, which was formed just more than three years ago and sold to Google 21 months later for $1,65-billion. Either it will capitalise on its position as the leading video website on the internet or it will be remembered as nothing more than a transitional footnote.
Hurley, who has a worrying tendency to drift into corporate argot, is convinced it will be the former. His ambition is for YouTube to become a global “super distribution hub” — the means by which video content is distributed globally on PCs, cellphones or TVs. The other big question is whether he and his co-founder, Steve Chen, both worth hundreds of millions of dollars before they turned 30, will stick around to make it happen.
“It’s been a great relationship with Google. It has given us the freedom to continue to focus on users and create a product that would work for them and keep them engaged,” enthuses Hurley. “It’s also given us time to really work on the advertising opportunities that are going to work not only for the online community, but for advertisers and partners as well.” He is acutely aware that the site has to start making serious money. And, with lawsuits from MTV-owner Viacom, the FA Premier League and Elvis Presley’s estate looming, this will also be the year in which YouTube either solves its copyright and licensing issues for good or is sunk by them.
Having developed a thriving, vibrant community — and defied those naysayers who said it would implode under the pressure of lawsuits and users drifting off in search of the next online fad — the next step is to make money out of them. Put simply, the site must bring in enough cash to satisfy its new licensing deals, pay out to some of its most popular users under a scheme that allows them to share its revenues, and still contribute to Google’s bottom line.
“They’ve given us a lot of independence. We’ve kept separate offices, they really push us to make our own decisions. We’ve been able to launch in 20 different countries since the acquisition and scale the infrastructure around the world,” says Hurley. YouTube’s phenomenal growth shows no sign of slowing — 10 hours of video are uploaded every minute and hundreds of millions of videos are viewed every day. But now Google is eyeing it to deliver the next stage. That will mean more contextual advertising around videos, but also more clever pop-up video advertising within them and sponsorship deals between brands and some of YouTube’s most popular uploaders. Beyond that, it’s clear he hopes to bring in big money through sponsored links of the kind that proved such a goldmine for Google.
“What people miss in the broader strategy of how we work into Google’s plans is that we see a great opportunity for people to elevate or promote individual video content,” he says. “We’re going to give people the tools and the ability to promote a single video against our video catalogue search in the same way as they do in Google.” Just as YouTube has levelled the playing field in content, he claims, so it will provide revenue streams not only for the big media players but also for nascent talent. “All the tools are going to allow everyÂÂone to participate. If you’re an independent filmmaker, you have just as much chance to promote your content as the traditional studios.”
A happy alignment of different stars, such as widespread broadband and cheap camera-phones, made YouTube’s phenomenal growth possible. It exploded thanks to the kind of silly user-generated content played ad nauseum to baffled broadcasting industry executives in 2006 (teenagers lip-synching to pop hits, exploding bottles of Diet Coke, et cetera), and a huge library of archive clips on just about any subject you could think of.
Now, insists Hurley, we are seeing those who have grown up with the YouTube revolution — video bloggers, independent filmmakersÂÂ, comedians — using it to bypass traditional broadcasters altogether and becoming much more sophisticated in their contributions. “People are starting to understand that — in terms of what the power of video can provide and the scale and the global footprint the YouTube service can provide. That’s what sets us apart from our competitors.”
Contrary to some predictions, its audience continues to grow. The latest figures from Nielsen Online show it had 11,6-million unique users in the United Kingdom during April, a 46% rise on last year. One of YouTube’s best early moves was to allow its videos to appear throughout the web, on blogs and rival sites. Now Hurley says he wants to take that further, using its technology to power other websites and opening it up to developers. The vast majority of traditional media companies, he argues, have come round to the value of YouTube. Once they realised they were not necessarily in competition with it and could use the site to reach audiences they couldn’t get to elsewhere, they have become far more enthusiastic about its potential, he says. The BBC, for example, is using YouTube to drive viewers to its iPlayer.
But there are still those significant hurdles. YouTube’s business model relies on leaving it to copyright-owners to identify their own material, making use of fingerprinting technology and other tools to take it down if they want it removed. If that is successfully challenged, it could fatally undermine the site. He expresses some frustration at those who won’t play ball. It’s “kind of ironic” that they are not going after YouTube’s rivals, he says, claiming they are not making similar efforts to help identify unlicensed content.
He treads more carefully when it comes to YouTube’s unsavoury offerings. Happy-slapping, glorifying gang culture, cyber-bullying — there isn’t a week that goes by without YouTube content being called to account by tabloid headlines. “Whenever you’re the leader in any industry, you get more headlines. The majority of the content on the site is appropriate,” he insists. “We’ve been around a little more than three years and we’ve learned a lot in that time.”
It is not just broadcasters who see YouTube as a route to an audience who are otherwise difficult to reach. On the day we meet, Gordon Brown has become the latest politician to join the YouTube club, awkwardly asking for questions on his new channel. Meanwhile, in the United States, the looming presidential contest will be the first YouTube election. “People want to see something authentic. If it’s too polished and highly produced, people might not trust it as much,” Hurley says. “If it’s grainy, if it’s coming from a webcam, if it’s someone standing there and talking their mind or sharing their thoughts, people trust it much more.”
When asked about his personal fortune, Hurley reminds me that he and Chen went through the same experience at PayPal. When it was bought by eBay in 2002 for $1,54-billionÂÂ, the pair walked away with more than enough to invest in their next venture. “We weren’t the founders of that company, but we were there, and we got the benefit of seeing it succeed. We were surrounded by a lot of people in a similar situation. Whether it’s [Google founders] Larry [Page] or Sergey [Brin] or other people like Mark Zuckerberg [Facebook], these people are basically friends. We’re all coming from these simple ideas. We were all really lucky to be in the right place at the right time.”
Hurley is either incredibly lucky or very talented. Most likely, a bit of both. At university he ditched computer science for graphic design. And it is his ability to straddle the worlds of technology, media and marketing that perhaps explains his success. He and Chen will stay at YouTube for a good while yet, he says, insisting it’s his passion for the business, not filthy lucre, that keeps him motivated. “We’re not sticking around because we need to. Financially, we could leave whenever we want. But it is seeing this vision through, having a chance to define some of these ideas and these markets. That’s what is really driving us.” — Â