The YouTube Story Part One

talking about YouTube. It's a site that has recently been in the spotlight for lots of not so great reasons, but we'll get into those a bit later. And I should mention this is part one of a multipart episode, and as of the recording, I'm not exactly sure how many episodes this is going to end up being in total, but I suspect it will be too. I'll let you know more in our next episode after I've those notes done. But today, YouTube is the dominant player in online video content.

Users watch, share, and upload hours of videos every moment, So we're gonna take a look at how YouTube got it start, how it rose to prominence, and some of the stories and scandals that have shaped it along the way. So let's start at the very beginning, which I am told through song is a very good place to start, and that would be at PayPal. Now. PayPal, to back up even further, was founded partially by two other companies. Peter Thiel, Ken Howary Luke Nozack and Max Levchin created

a service called Confinity. Like today's PayPal, this was a money transferring platform, and in two thousand, Confinity merged with an online banking site called x dot com, which was co created by Elon Musk. So already we've got some really big names involved in this story, namely Peter Thiel and Elon Musk. Really, the news service became known as PayPal shortly thereafter, and by two thousand two had attracted

attention from a little company called eBay. eBay moved to a choir PayPal for the princely sum of one and a half billion with a B dollars. Now, this acquisition made a lot of people really rich. Or let's get real here for a second. People, it made some people rich and other people it made way more rich than they already were. Because I hate to tell you this, but the fairy tale of the developer who comes from nothing and then becomes a millionaire isn't nearly as common

as we would all like to think. Often it's more like rich person goes and does things and gets more rich. But that's a topic for another show on another podcast. Really now, two former employees of PayPal, Chad Hurley and Steve Chen, were shooting the breeze at Chen's then new San Francisco home, and I like to imagine they were having money fights with each other, throwing balls of cash around.

That's probably not accurate. They did shoot some video while they were hanging out, and then they lamented that sharing video online was unreasonably hard. The Internet and the Web had started to transform everything, but it was still difficult to get video to anyone. This is the era before the smartphone, so for one thing, we didn't all have

video cameras in our pockets. And it was the era before anyone had created a really dependable platform upon which you could upload and share video that could get a lot of traction. Meanwhile, there was a third former PayPal employee named Jawed Catam who was lamenting that there was no easy way to find videos of specific events online.

He was thinking about some events that had really made the news and you should be able to find video of those events online, But unlike other sources on the other types of media, there was no really good way of searching for video. So you could find news reports

or sometimes images, but you couldn't necessarily find video clips. Now, there were two events in particular that he cites as being sort of the inspiration for thinking about this, and one of them is is a catastrophe, and the other one not as much, although it was treated as a catastrophe at the time. So the two events he cited in an interview in two thousand six were the moment during the halftime show of the two thousand four Super Bowl.

That moment the moment in which Janet Jackson's breast was exposed during what was later called a wardrobe malfunction. So that was the first event he cited as one of the reasons he wanted to create a platform that would be easier to share video because he couldn't find video

of that event. And the other was a tsunami that had devastated places like Indonesia, Sri Lanka, Thailand, and India, and he knew that there were a lot of people who had captured video footage of the tsunami and that video footage could be really valuable for people and educational for people, but there was no easy way to search for it. You couldn't find it anywhere. And he knew that there were other events like this, but again there

was no way to find them. So he would end up having a meeting with Chen and Hurley, the two guys I mentioned earlier, and talk about this problem, and they were all kind of going over this same issue. Now. There was no platform at that time where you could easily upload a video and other people could go there to watch it that really gained traction. There were a lot of little sites, but no one had really come to the forefront. When it came to video online, your

options were pretty much limited. You might host a file on a server and people could visit a website and download the file to their own machine. That's not terribly user friendly and it took a long time and still

let's somehow. That's how some of the earliest web series like Red Versus Blue from Rooster Teeth distributed their content in the early days, is that you would actually pop onto their site, download a file when it became available, and then on your computer at home you would launched the video in a video player program that was compatible with whatever file format the content creator was using. It's

not the smoothest experience. You can also create a web based video player using one of several different proprietary formats, which just made things more confusing. Microsoft had Active Movie, which was a media player that launched in Nix and

allowed streaming media. Real Player had launched their application the following year in and Apple would follow suit in n with quick Time four and their streaming media format, So there were a few solutions out there if you wanted to host streaming video on a site, but it was still not the greatest experience in the world from a user perspective because most people were relying upon dial up modems,

so it was really slow to access anything. They had to download whatever the applicable movie playing program was and have that stored on their machine, and streaming video was just hard to do without all those annoying buffering issues. So still not very great now. Those solutions also, again

we're not entirely based on the web. You had to have that program, so first you have to go and download your Active movie player, and then you would have to access the website that actually has the streaming content on it, and if you went to a different site that had say quick Time for streaming content on it, you would have to get a totally different later because

they were incompatible formats. This proprietary approach was fragmenting the experience and that's never really satisfying from a user perspective. In two thousand two, Adobes Flash product came along, and that simplified things because people began to adopt that as this standard for streaming technology at the time. And a couple of years later, more people had access to broadband speeds, making streaming video a viable option that didn't always include

ages of buffering time. So you had sort of this convergence of different events that were making it easier to have a streaming video service. You had Flash coming about, which gave a lot more versatility to streaming video, and you had the fact that more than half of American households had access to what was then considered broadband speeds, which was much lower than what we consider broadband today. So in early two thousand five things were kind of

falling into place. It was the right time to look into creating a platform in which users could upload video footage and watch other video clips. It would become parts social platform, parts search engine, and the three felt they were onto something and began to have some serious discussions about what it would take to launch such a platform. So who are these guys? Well, Steve Chen was born in nineteen seventy eight in Taipei, Taiwan. His family moved

to Chicago, Illinois, when Chen was fifteen years old. He attended the University of Illinois Champagne, Urbana. This was a school that had some pretty notable alumni, particularly in the field of computer science. For example Mark Andreson, who would go on to co create the first commercially successful web browser, Mosaic. He went there. Chen was interested in coding and graduated from the university and moved on to work for PayPal, and he would end up meeting Chad Hurley on his

first day on the job. Hurley was born in nineteen seventy seven in Birdsboro, Pennsylvania. He studied fine art at the University of Pennsylvania, and he leveraged his artistic abilities to help design user interfaces and join PayPal to work on its UI. And that's really important. We often will not really consider how challenging it is to create a user interface that is clear. It gives the user very uh simple instructions on how to use the service, and

there's not a lot of clutter there. It's actually a lot more challenging to do than you would think. And so Hurley came from this from a fine arts perspective, which is pretty interesting to me. Jawad Karnem was born in nineteen seventy nine and East Germany and his family moved to West Germany in nineteen eighty, which was a thing back then because there used to be an East and West Germany. I remember those His parents were scientists

and researchers. They moved to the United States in nineteen Kareem would attend the University of Illinois along with Chen, although he didn't actually meet Chen while attending the school, and he dropped out before graduating in order to go work at PayPal. Now, according to the sources I research, Kareem didn't meet up with Chen until they were both at that company, until they were both at PayPal, though

they again did attend the same university. Kareem would later leave YouTube and finish his studies first, though he would graduate in two thousand and four with his undergraduate degree. He would leave YouTube later on and pursue post graduate degrees, and early on he was frequently left out of stories about YouTube's rise to success, though that was later rectified. And I'll talk a little bit about why he was kind of written out of the history and just a

little bit. Oh and uh. Like I said, YouTube wasn't their first go at a video platform service. There was an earlier failed concept that I think I should address. The original video platform concept before they settled on YouTube was one that Chen Hurley and Kaream called tune In hook Up and yes, it was meant to be a dating website. Users were supposed to post videos of themselves and Peru's other videos, all in the name of finding a certain special someone with whom you could then hook up.

According to Kareem in an interview in two thousand sixteen, the founders even trolled through Craigslist personal ads and offered women twenty dollars to upload videos of themselves to this

service in order to populate it, but they found zero takers. Anyway, that particular startup fizzled, but the three founders saw possibilities in using the video platform technology a different way, And on February two thousand five Valentine's Day, which Kareem would later say was to a coder, just a normal day, which I think is just a sly remark on the personal lives of your typical coders, the team pivoted away from this concept of tune in hook up and they

pivoted toward YouTube. Hurley registered the trademark for the logo and the domain of the site on that day. Their new platform would be one where people could upload videos about whatever subjects they like within reason, and I wouldn't have a narrow focus on dating like their original concept, but rather serve as a general video publication and consumption site.

But would it work well? They weren't sure. Chinn and Kareem were focused on creating the technical platform for the service, while Hurley concentrated on the user interface and the logo design for the site. The team built out the infrastructure for the service, and the first video to officially hit

YouTube would not go up until April two thousand five. Now, I'm sure a lot of you already know the name of that video because it is a piece of Internet history, But just in case you don't and you some pub trivia knowledge in your back pocket. The title of the very first video upload to YouTube was Me at the Zoo and it's a video of Jawad Kareem standing in front of an elephant enclosure at the San Diego Zoo

and it published on April two thousand five. As of the recording of this podcast, it has accumulated more than forty four million, five hundred thousand views. It lasts eighteen seconds long and contains the important information that elephants are really cool because they have really long trunks. And while I'm poking some fun at the content of the video, the important thing was it was a piece of content

that could be tested out on the platform itself. What was in the video wasn't nearly as important as the fact that this was the first video to go live on an official YouTube server it would ultimately face the public. This wasn't just some random test video on a server that was never going to be forward facing and only be used by developers. This was the first actual YouTube video,

and that is why it is significant. Now. I have a lot more to say about YouTube in those early days, but before I get into that, let's take a quick break to thank our sponsor. All right, it's two thousand five April. YouTube still was not yet open for the public. Essentially, in late April early May two five, the company launched its beta home page. They had secured a deal with an internet service provider called Server Server Beach, and the deal was for an unlimited data plan for a hundred

and twenty nine dollars a month. The earliest incarnation of YouTube wasn't exactly a home run. Kareem said that their original version of the site didn't let users select which videos to watch. Imagine that going to YouTube, but you have no control over what video is going to play. Instead, it was a Russian roulette style of experience. You'd go to the site and it would randomly serve up one

of the videos stored on its servers. And because there were relatively few videos available and meant you were likely to see a lot of the same stuff, it wasn't the sort of experience that would lead people to coming

back for more. And in fact, Karim himself had gone to airports and filmed planes landing and taking off just to have more content to throw into the servers, because otherwise you didn't really have anything to populate them, and that is obviously any that's a problem any user generated platform is going to face. You don't have a lot of content until you have users to generate that content. But how do you attract the users in the first place.

It could have been the very end of YouTube at that very beginning, because they had to get enough people in there to create content to to alter the user interface of this approach, and the founders were still sussing out what YouTube was supposed to be because besides the dating site idea they had already abandoned, they thought perhaps that YouTube would be a place where you'd have relatively small circles of friends and you would share videos between

the folks in that circle. In other words, the YouTube founders had a vision for their service kind of similar to what Twitter founders thought their users were going to want, And it turns out that both groups weren't quite on target. While they thought this is a place where you could share videos with your close friends and family, what they saw was that people wanted to share to the rest of the world. It was a much grander scale than

they had anticipated. The site was still struggling to find its place when on July four, two thousand five, Kareem attended a Faithful Independence Day barbecue party and it was hosted by a guy named Mike Greenfield. Greenfield had been another PayPal employee back in the day. Also in attendance of that already was a guy named Keith Rabboi or Reboi I guess it would be the French pronunciation. He

had another PayPal employee. He had been an executive with PayPal, and Reboi and Kareem got into a conversation about YouTube, and Kareem was convinced to show off YouTube by plopping down in Greenfield's bedroom and using Greenfield's personal computer to check out all the videos on YouTube. They literally sat

down and watched all of them. Jawed, Kareem and Uh and Keith Reboi, So, Keithan and Jared are sitting there there watching every single video that's on YouTube these days, If you tried that, you would never finish watching it. There would just be too much content there. You would die of old age before you got through it all. But back then, on July four, two thousand five, the entirety of all the content on YouTube consisted of about thirty minutes worth of videos. Many of them were playing

is taking Off and Landing Now. Despite the lack of compelling content, Keith saw the potential in YouTube and offered to become an investor on the spot. And according to him, the only other time he ever felt compelled to make an investment that quickly was when he first heard about the concept of Airbnb. Kareem was getting ready to leave YouTube in order to pursue a PhD program at Stanford. He would continue to serve as a consultant for YouTube

while he was going off to pursue his studies. Meanwhile, Keith Reboise showed off YouTube to Yeah, another former PayPal employee, this one named roll Off. Both of both had actually worked as the chief financial officer of PayPal, so you may notice this is a bunch of former PayPal folks who were all kind of coalescing around this YouTube concept, and in fact, without PayPal, YouTube never would have existed.

In the summer of two thousand five, Botho was working at an investment firm called Sequoia cap at All and both was able to help secure an initial investment in YouTube through Sequoia. Now they get those investments going, they had to change the narrative a bit of YouTube and had it focused solely on Chen and Hurley and kind of write Kareem out of the picture because Kareem, who had left to continue his studies, was creating kind of a problem. Not on purpose, it's just because of his absence.

The justification was that it would be really challenging to pitch a company to potential investors if part of the story was that one of the three founders had recently left the company. They made YouTube sound less stable, so they sort of erased Kareem from the history of YouTube for the time being. He would eventually get written back into that history, and he also would not complete his

postgraduate work. He never earned that PhD from Stanford. He did earn a master's degree, and he did with Tame Shares of YouTube, which softens the sting of not getting that doctor in a little bit. Now. Both have created a memo and presentation arguing for the investment into YouTube for Sequoia Capital. His investment plan was to supply one million dollars initially, followed by a four million dollars Series A funding and in return, Sequoia Capital would get at

stake in YouTube once it emerged from Series A funding. Now, the actual details of the funding deal once it was concluded are a bit clouded in secrecy, but a lot of the sites I research suggested the initial investment was more like half a million dollars, with another three million dollars investment in Series A funding in November two thousand five, for a total of three and a half million dollars

of that initial funding. But considering what happened to the site over the following years, any investment of around that size was more than worth it and more than paid for itself. When you talk about big gets, this one definitely counts now. Just to backtrack a bit, in September two thousand five, YouTube hit a milestone. The site had

its first video to hit one million views. This video was an advertisement for Nike, and it started Brazilian soccer player or football player if you prefer, named Ronald Dino. He puts on a new pair of Nikes and then he shows off some truly impressive ball juggling skills with his feet before kicking the ball precisely so it hits the goals crossbar and bounces back to him. He's standing many yards away from the goal. It's actually really impressive to me that he is so precise with his kicks.

He's juggling the ball, kicks it while it's coming down, It hits the crossbar, bounces right back to him. He starts juggling the ball again, does this a few more times in a row consistently. The video itself is about two minutes forty five seconds long, and I came to the realization that I will never do anything in my life as well as that man was able to juggle and kick a soccer ball. You could also argue that

this was the first viral video on YouTube. It was an advertisement and it got more than a million views. It was pretty much a breakaway success in those early days. Also in September two thousand five, Julie Supan left the Best Buy Corporation to join YouTube as the head of marketing for the company. Now with the founders, she brainstormed the position YouTube wanted to take to the public, like what were they going to portray themselves as? What was

their mission statement? And they decided that YouTube was going to become a broadcast medium for average people. This is all according to a piece that was written in mash Double a few years ago. One thing that set YouTube apart from many other sites was that they were deciding to to convert video files into a standard format. See a lot of other video sites, you had to actually

have a specific format before you could upload it. YouTube would allow users to upload videos in different formats, and then the site would take care of converting those formats into flash, which removed that pressure from the user to make sure the video file they were sending met some specific criteria. There was a limit to how long a video could be, but the file format didn't matter as much. And when you remove that barrier, it made YouTube much

more user friendly and helped attract more traffic. Imagine that you've shot a video and you want to upload it to a service, but then you find out that you have to use a completely different format. You would have to convert the file, or maybe look for a different service, or even reshoot your footage and put it into a new file format. Before you could do that, YouTube said no, no, no, We'll take whatever format you want to create your videos in and that will do the change on our side

and post it to our flash based media player. Around the same time, YouTube users were really starting to push the platform's capabilities According to Time magazine, it was in November two thousand five when the company first started seeing data transfers of around eight terabytes of size every single day. That unlimited data of land wasn't part of the picture anymore, and so I was starting to get expensive to operate

the business. To pay for those bandwidth costs, the company had to invest in engineers to build out the site. They needed servers to hold all that video content, and they needed data service plans to cover the cost of the massive amounts of traffic that was hitting the site every day. And at the time YouTube didn't really have any monetization plans. It was clearly an up and coming service, but it was operating at a loss. The company headquarters

weren't much to write home about either. For a while, they were operating out of Sequoia Capital's headquarters, but the company soon relocated to San Mateo, California, and they moved into a space that was a of a pizzeria, specifically Amichi's East Coast Pizzeria, and according to a YouTube designer named Christina Broadbeck, the building had a real rat infestation problem.

She said the rats were cats sized, which I think puts them in the category of r O U s S. All of this was happening while the site was still technically in beta. YouTube didn't emerge from this beta phase until December fifteen, two thousand five. The site had used investment money to increase the number of servers and to improve bandwidth service to make sure using the site was a positive experience, and over the next several months, the

site continued to gain users and videos. In February two thousand six, videos on the site we're getting fifteen million views per day, with about twenty thousand new videos being added every single day. Now it grew not only in content but an employee count. It also began to encounter the first instance of intellectual property headaches for the service. In February two thousand six, YouTube receive a request from

the American Broadcast Network in BC. NBC employees saw that a clip from Saturday Night Live called Lazy Sunday was up on YouTube. This was part of SNL's digital short

series with Andy Sandberg and Chris Parnell. Lazy Sunday had racked up more than one point two million views NBC one of the clip taken down, along with around five other clips containing NBC content mostly from Saturday Night Live, and YouTube would comply with the request, But later in June two thousand six, NBC approached YouTube with a different request.

The broadcast company formed a partnership with YouTube. In June two thousand six, NBC created a digital channel on YouTube, on which it would share clips of various shows, including special material made just for the YouTube channel. So why did they have a change of heart? Well, part of it might have had something to do with the fact that NBC had come in last place among the big four broadcast companies, the others being ABC, CBS and Fox.

By June two thousand and six, YouTube boasted that people were watching approximately seventy million videos per day. That was a valuable audience. So NBC was hoping to convert those viewers into television viewers and to give them a little extra material to kind of bring them in and have them watch shows like The Office or Saturday Night Live. One month later, that seventy million videos per day was up to a hundred million videos per day. It seemed

like YouTube was unstoppable. In between those two NBC communications came around of Series B funding, another venture capital fundraising series, this time YouTube raised about eight million dollars from Sequoia, and a video that would end up becoming the first true mega hit on YouTube went online in that month as well. That video was from a guy named Judson Lately, and it was titled The Evolution of Dance. Now it's

since been surpassed. It's no longer the most watched video of all time, but for a while it reigned supreme with more than a hundred million views. I got a lot more to say about those early days with YouTube, but before I jump into that, let's take another quick break to thank our sponsor. All right, back to June

two thousand and six. Now, that was when one of the first successful web series on YouTube premiered, because this would become another hallmark of YouTube was not just the one off videos or the videos that would come from a single creator or a group of creators, but the actual web series where you would have an ongoing story. This series was called Lonely Girl fifteen, and when it launched, there was no indication that this was a scripted show

with an actre is portraying a fictional character at the center. Instead, it appeared to be the genuine vlog or video diary of a young lady named Brie. Brie was actually an actress named Jessica Rose, and it all started off pretty grounded and believable, mundane, even just the day to day issues that a teenage lady is facing. But while it

was getting popular, the ruse did not last long. In September two thousand six, just a few months after it launched, it became pretty widely known that Lonely Girl fifteen was a scripted show, that it was a performance and non actual vlog. Once the gig was up, the show took a turn for the totes crazy, with storylines involving weird cults and quote trait positive blood end quote. Now. I never got into the web series while it was on, so I can't really give you my own personal opinion

about it. I was only tangentially aware that Lonely Girl fifteen was a thing at the time. I had heard about it, but never sought it out. In August two thousand six, YouTube launched a revenue generating strategy. They called it participatory video ads. They also introduced brand channels. This is similar to what NBC had launched earlier that summer.

The ads would appear in the upper right corner of YouTube homepage in a prime spot for listed videos, and if you clicked on that video in that space, it would take users to sponsored content. Advertisers could link those videos to brand channels or two other clips on YouTube, and the site rolled out some features that made it easier to share links with other users, encouraging the spread

of viral videos. The brand channels could feature brand specific logos and graphics, so each channel could be set apart from the YouTube standard as well as from each other. October was a really big month for YouTube, and two thousand and six, first the company partnered with CBS, adding to the sites growing influence. They had already had the deal with NBC, and now CBS was on board. YouTube also would launch a content i D tool, the first

of its kind for YouTube. This was an automated program designed to detect material that could infringe upon copyrights, and it also partnered with a company called Audible Magic to develop a technology that could analyze and identify audio clips. That way, if you uploaded a popular song against a video that was just a static image, for example, YouTube could still detected automatically and take down the video in order to protect copyrights. This set the stage for an

enormous turn of events in the history of YouTube. In October two thousand and six, Google made an offer that YouTube couldn't refuse. This was an acquisition valued at about one point six five billion dollars. YouTube employees would get shares of Google stock and become rich, or at least rich on paper. Well, that is, the ones who weren't already rich from all that filthy PayPal money they had received just a few years previous. And I say filthy

totally tongue in cheek. It was completely legitimate money. It was just a whole lot of legitimate money. Now, according to legal briefs that were filed as part of a lawsuit that I'm going to talk about in just a moment, we know that Chad Hurley made about three hundred thirty four million dollars in Google stock due to this deal.

Steve chen was at a slightly more modest three hundred one million dollars, and John Kareem, who had left the company to pursue an education, received the smallest payout of the three founders. His stocks were valued at somewhere around sixty six million dollars. Not a bad haul to be honest.

Christina Broadbeck, whom I mentioned earlier as a YouTube designer, had shares were slightly more than nine million dollars, So it really paid off to be a YouTube employee in October two thousand six, and in all there were between fifty five and sixty five YouTube employees in total. That was it for a one point six five billion dollar acquisition. That's incredible. As for Google, it had already been pursuing a streaming video strategy of its own before it purchased YouTube.

In fact, it was the second most popular video streaming service that was online by a distance second, but it was still second place. Now there were Google engineers who were genuinely baffled at YouTube success. Google's technology allowed for videos with much better resolution than YouTube, but the engineers had underestimated how appealing YouTube's automatic conversion process was to

the average user. Because with Google's video service, you had to use a specific video codec and provide information about the technical details of the video of itself like its resolution. With YouTube, all of the work was done for you. You just had to upload the file and YouTube did the rest. And so users had mostly ignored Google's product, even though you could get higher quality video out of it, and they flocked to YouTube instead. Google saw the writing

on the wall and thus made the move. Towards the end of October, YouTube removed about thirty thousand videos in an effort to respond to copyright infringement cases, and in November, YouTube signed a deal with the National Hockey League, which would become the first big sports deal in YouTube's history.

By January two thousand seven, when YouTube was not even two years old, yet, the service was so popular that analysts estimated the traffic to YouTube was equivalent to what the entire Internet experienced back in two thousand so, in other words, YouTube required as much bandwidth to operate in two thousand seven as the entire Internet did seven years earlier. Of course, other services like Netflix would later follow suit

with similar kind of mind blowing statistics. In March two thousand seven, YouTube became the target of a massive lawsuit, the one I alluded to earlier. The plaintiff was Viacom. This is the cable company that owned brands like Nickelodeon and MTV. The lawsuit was to the tune of one billion dollars in damages, and it all centered on Viacom's claim that YouTube and by extension, Google, had failed to

act appropriately when it came to protecting intellectual property. Basically, the lawsuit argued that YouTube was allowing users to upload media that didn't belong to them, costing media companies millions of dollars of loss of revenues in the process. Now, this is a tricky situation for multiple reasons. For one, YouTube was on the receiving end of thousands of videos every day, so checking each one for evidence of copyright

infringement was not easy. Specifically, it wasn't easy to you manually or not even possible manually, so you had to rely on automatic approaches, and algorithms could be tricked. You might have seen a YouTube video here or there on a popular television show, or a movie or music video or something along those lines, and noticed that everything seems to be flipped with like backwards writing and other clues.

Now that could be an indication that the uploader made that flip with editing software in an attempt to fool any content recognition algorithms because they're looking for the reverse version of that. But it's also tricky because arguing that piracy results directly and lost revenues is impossible to prove. The argument seems to say, this person over here watched unauthorized copies of our content on YouTube, and they should

have just purchased those copies. If the unauthorized copies didn't exist, then that person would have bought a legitimate copy. But here's the thing, it's impossible to prove that someone would

actually follow through with that. Further, it's impossible to say that some of the people who saw the unauthorized copies didn't go out and buy legitimate copies of the content later on, or maybe they already owned a legitimate copy of the content, but they were using YouTube to access the content without getting their personal copy out from wherever they had stored it. So, in short, it's impossible to

prove the extent to which piracy impacts revenue. To add to that, there were suspicions that people at YouTube, just before the acquisition with Google, started to boost YouTube's numbers by allowing this unauthorized material to be uploaded to the site. In other words, they were patting the value of the service by allowing some shady stuff to go on, and then once the site got acquired it was no longer

their problem. That's a pretty cynical way of looking about it, but it was something that a lot of people were floating by at the time. YouTube, for its part, cited the Digital Millennium Copyright Act and claimed that the company had been following the rules set out by the d m c A. The lawsuit would stretch out over seven years, only concluding in two thousand fourteen when the parties settled out of court. This followed two different setbacks for Viacom.

The first had happened in when Judge Louis Stanton ruled favorably mostly for Google. Viacom would appeal that decision. It was sent to a federal appeals court, but they sent it back down to a different court, a court that was once again presided over by Judge Stanton, the guy who had said that Google was mostly in the right back in and Stanton gave essentially the same ruling in.

Then Viacom would appeal that decision, and that's when they two companies were scheduled to meet in fen before they reached this settlement, which was never made public, so we don't actually know what money changed hands in the process. Us The general opinion in the text sphere seemed to be that Viacom didn't really have much of a case. The d m c A offers up a concept called

safe harbor. Safe harbor is a protection for services like YouTube and other platforms that allows users to contribute content to that platform. The basic idea is that if you have a platform and you let your users create the content, you are not responsible for the stuff other people upload to your platform because you didn't create that content. Your users didn't. You just gave them a space for them

to put their stuff. In addition, YouTube had tools that would automatically seek out instances of copyright infringement, and the company provided processes through which intellectual property owners could post claims against material that they said infringed on their intellectual property.

So those processes could be anything from redirecting monetization so in other words, someone else uploads a copy of a movie that you made, you could, as the owner of that intellectual property, choose to turn monetization off so they can't make any money off of it, or even redirect that monetization so any money they would have made goes to you, or you could actually demanded that video be

removed and would be taken down off of YouTube. That tool by the way, has been the center of much debate and controversy, as over zealous content owners have abused it in the past, sometimes even using it to take down their own videos that they put up in an effort to protect their intellectual property. I'll chat about that

more in the next episode. I'm sure now, even though we don't really know what happened with that, I think we could say that at least YouTube from outward appearances could claim that they were in all good faith pursuing the processes necessary to protect other people's intellectual property. Whether they were really doing that to their fullest extent, that's still a matter of debate. H I like to take

people at their word. But the same time, I figure if I ran a company that was worth billions of dollars, I might claim that I was doing everything I could to be on the up and up and not worry so much about whether that was true. But I'm not in that position. If someone would like to put me in that position and test my moral fiber, I welcome it.

Send your billion dollars to how stuff works care of Jonathan Strickland, And I cannot stress how important that last bid is, because if Josh gets his grubby hands on it, I'll never see it. All right, I'm gonna end this episode with a quick rundown of another feature that really transformed YouTube and opened up a world of opportunities for a select few individuals, particularly in the early days, and

that is the YouTube Partner Program. This was YouTube strategy that made it possible for the average person to launch a channel and to monetize it. Now. Previously that was something only the brand channels could do big big media companies, But now it is possible for a person to become an Internet celebrity and act really make money off of it. Now. I've often mentioned to my friends who claim I'm Internet famous that that kind of fame is largely useless. First

of all, I'm not really famous. Second, what little fame I do have, I can't leverage in any remotely useful way. I can't even get a good table at a restaurant with it. But YouTube's partner program gave a few folks the shot at making a living by creating online videos, and before long a small number of YouTubers began to earn decent some amounts of money, sometimes more than decent, like up to six figures a year making videos. We also started seeing more viral videos coming from people who

could create a compelling share double video. There tons of examples of viral videos and YouTube's history, and we often saw some of those same people attempt, often unsuccessfully, to repeat that experience by creating more videos similar ones to the ones that got a big hit. And it became clear that hitting a home run with a viral video once it was not a guarantee that you'd ever end

up with a sustainable business. Though if your video was popular enough, you could still make some decent cash off of a single shot. It might just take a while and be spread out over several years. And that brings us up to early two thousand seven. Obviously, we've got a lot more to talk about in the history of YouTube to bring us up to date, so in our next episode, we'll look at how YouTube has expanded in the last decade, as well as some of the controversies

surrounding the company. Will explore the bizarre world of the YouTube kids app, which has had some truly David lynche In scale weirdness going on with it, and we'll also take a closer look at some of the battles between content creators and the various intellectual property claims that have happened over the past several years. Meanwhile, if you guys have suggestions for other topics I should cover here on

tech Stuff, you should let me know about them. One way you can do that is sending me an email. The addresses tech Stuff at how stuff Works dot com, or you can drop me a line on Facebook or Twitter. The handle for the show at both of those is text Stuff HSW Remember on Wednesdays and Fridays, I record this show and I stream it live. If you want to see the show early and find out what's cool in tech, sometimes more than a week before everyone else does,

just go to twitch dot tv slash tech Stuff. The schedules up there and you can join the chat room and chat with me and and watch as I make gooflem ups in between takes it happens. I hope you enjoyed this episode. I look forward to talking to you with more about YouTube and kind of exploring how that site has evolved ever since Google took possession of it, and uh, I look forward to hearing from you guys, finding out what you want me to talk about in

the future. Remember, it can be any sort of topic. It can be a technology, could be a company, could be a personality in tech. Maybe there's someone you want me to interview on the show, or me to be there, someone you want as a guest host for an episode. Give me a shout and let me know and I will talk to you again. Release soon for more on this and thousands of other topics. Is it how staff works dot com