By Brian L. Clark
Disruptive. That's one way to describe YouTube.com. But founders Chad Hurley and Steve Chen tend to disagree. To them, this market is a clear extension of the entertainment industry. Since its public preview in May of last year, the YouTube video entertainment community has exploded to 35 million video views a day and caught the attention of TV networks' marketing and legal departments. The big guns of the VC world are interested, too. Last November, YouTube secured $3.5 million from Sequoia Capital. Just this week, Sequoia enthusiastically agreed to kick in another $8 mill. These days, Hurley's a busy guy who doesn't have time for a lot of interviews. Still, he managed to squeeze out a few Gizmoments for Gizmodo.
Q: What got you into this?
A: Steve and I started this company because we personally experienced how hard it was to share videos online. We were at a dinner party and we were taking photos and videos and the next day just had a really difficult time emailing these video clips to each other. So we thought this would be a great problem to help people deal with that online. And we just started working on the project in my garage.
Q: Which one of you guys is the programming genius?
A: That would be Steve. I'm the marketing guy, UI guy, designer guy. So we combined forces to create a highly technical, highly advanced architecture with an extremely easy-to-use interface.
Q: People are always talking about disruptive technologies...do you see YouTube as disruptive?
A: No. We see our service as something very complementary to the television business as a whole. What we're really focused on is delivering short-form, entertaining content—giving people the opportunity to interact with a piece of video without having to commit a half an hour, an hour of their time. They can sit down and watch a two-minute clip and interact with that and share it with their friends, so at the end of the day, it drives people back to television.
Q: So it's like skipping to the good parts?
A: Exactly. We're working with many content providers to help them take advantage of our large and growing user base to get content in front of our users that they want to watch and share with one another.
Q: Do you consider yourselves a kind of social networking site that relies on video the way previous generations relied on photos?
A: Yeah, we really view this market as similar to where digital photography was a few years ago. With more and more people gaining access to devices that can take video—from cell phones to digital cameras—we think we're poised to see an explosion of video content.
Q: How can the Internet serve to make TV better?
A: Well, I think where we're coming from, video makes the Internet more entertaining and we're trying to democratize the entertainment experience where anyone can get involved. We're just providing the stage. So it's a matter of how many people respond and share with one another. It's really the community that decides what's popular.
Q: How do you track that community?
A: We're tracking video views. We also have ratings and comments but primarily if something's getting a lot of use, you can see it's a popular clip. So it rises to the top and people can easily find that.
Q: Do you know what your demographic is? Is it mostly young people?
A: There's definitely a lot of growth from MySpace and a younger demographic, but what we're seeing is our demographics are expanding because our content appeals to a lot of people. [YouTube's primary demographic is 18 to 49.]
Q: That seems the ideal demographic for the TV people. Let's talk about the kind of relationships you're developing with networks and other content providers. It seems to me you have a pretty attractive model they've not necessarily been able to exploit.
A: We started this company as a personal solution to host videos and for people to share their experiences very easily but what we've turned into is a consumer media company for people to watch and share original videos worldwide. We're really creating a new market and helping studios, networks and labels to hook in and work with us in a legal way to reach people in a new way, basically.
Q: So you guys have been working with marketing and legal departments, sometimes within the same network?
A: It's pretty funny. We have a great way to serve up promotional and marketing material to drive interest. We really think we can provide a lot of value for people. At the same time, we are a new experience and they want to make sure we're operating correctly. We're happy to work with them to work through these issues. Basically, there's a great opportunity here. They can embrace us and we can both create something that benefits everyone, or they can work against us. We'll see how it plays out.
Q: YouTube is free right now. What's the long-term business model? Everybody's gotta make the donuts, right?
A: Yeah, everybody's gotta make the donuts. We're going to be pursuing advertising as our business model. We're exploring many more possibilities but what we're really committed to is providing the best experience for people to watch and share these videos. And as we move forward, we have an opportunity to present really relevant advertising.
Q: You mention the user experience. What have you guys learned, since you've gone live, to help improve the user experience?
A: We've tried to limit the barriers to entry that were associated with video, like requiring people to download a piece of software. We're a completely Web-based experience. Then we do a lot of work for the user, where we take pretty much any video format and encode that into Flash video. So it plays back seamlessly in a browser without requiring multiple media players. Layer on top of that really easy to use features for people to share these videos and that's why we've seen a lot of tremendous growth.
Q: Facebook just turned down a $750 million offer, saying they were seeking $2 billion. Do consider yourself a million-dollar-kind-of guy or a billion-dollar-kind-of guy?
A: What we're really committed to is providing the best experience, and we're not really thinking about what we're worth. We're just viewing this as solving a really hard problem and that's how to distribute video in an entertaining way. So as we move forward, we're just going to stay committed to that.