For years we have enjoyed watching various videos on the internet. From music albums to product tutorials, we have been blessed by the numerous types of videos that entertain and educate us.
Year on year, several videos are added to this platform, and now, YouTube is the second most-sought-after search engine after Google. But how much is YouTube worth?
But have we ever given thought about how we came to trust this one platform for all our video content needs? Have we given a thought on how this video sharing website became so popular? We’re diving in to how much YouTube is worth in 2020.
History of YouTube
The undisputed king of online videos, YouTube was started by Steve Chen, and Chad Hurley, Jawed Karim, in 2005. But what paved the way to three PayPal employees creating a video sharing website? How did the trio get together to register the domain name youtube.com?
Steve Chen and Jawed Karim studied together at the University of Illinois at Urbana – Champaign before joining the American e-commerce company PayPal and Hurley studied design at Indiana University of Pennsylvania. The concept behind YouTube didn’t come up to them straight away, and it was started as a video dating site.
The website would allow users to upload videos introducing themselves. But the idea didn’t take-off and the YouTube we know and love today was created with a different idea in mind.
The inspiration behind YouTube is credited to two different incidents or events. It is said that due to email attachment limitations, Chen and Hurley were unable to share video footage of a dinner party; Karim was unable to find video footage of Janet Jackson’s wardrobe malfunction, the Super Bowl incident.
Besides, the Tsunami in December 2004 triggered the idea as well.
The trio realized that there was no one place where people could share videos or look for one. They worked out of Hurley’s garage in Menlo Park, California where they got an explosive start. They received an $11.5 million investment from Sequoia Capital in 2005 and their headquarters above a pizzeria in California was registered along with their logo, website domain, and trademark on 14th February 2005.
The first video they uploaded was of Jawed Karim, shot by Yakov Lapitsky at the San Diego Zoo. It was a simple video of the co-founder standing in front of the elephant enclosure and on about long trunks. The video received a very healthy 4,282,497 since it was posted on April 23, 2005. It was just the start of a new era for YouTube and the trio.
Though their original idea was a dating site, they found huge success with the concept they adopted for YouTube and became the biggest force in online video.
The takeover!
You could presumably argue that youtube wouldn’t exist if there was no PayPal. Why! do you ask? Did you know that the trio initially funded YouTube with the bonuses they received after eBay took over PayPal? Someone would one day come up with a similar platform, but would it be as successful as YouTube?
Youtube attracted nearly 30,000 visitors per day shortly after the sire opened. In December 2005, when YouTube was officially launched, it had more than two million video views each day. Nearly 20,000 videos were uploaded each day and YouTube was serving more than 100 million videos per day by the summer of 2006.
The site showed no signs of slowing.
For every business, growth is good, but for YouTube, it posed a threat as it created its own set of problems. The immense growth in traffic meant that they had to continually purchase computer equipment and broadband connections to the internet.
They also faced potential litigation as some of the content posted in the channel were copyrighted material. Commercialization was difficult and the growing cost left to YouTube looking for a buyer.
In November 2006, after the failure of Google Videos, Google Inc. formerly known as Alphabet Inc. purchased YouTube for $1.65 billion in stock. It also negotiated great deals with many entertainment companies to reduce the risk of copyright-infringement lawsuits, and copyrighted video materials were allowed on YouTube.
Google also reached an agreement with MGM Inc. to share some full-length movies and TV shows as well, with advertisements running alongside the programs.
YouTube has seen a lot of growth in the last 15 years. It rose like a rocket ship and went from being a website full of amateur videos to a powerhouse of content and opportunities.
CEO and Founders
YouTube was founded by Steve Chen, and Chad Hurley, Jawed Karim. It is presently the subsidiary of Google Inc. with its headquarters in San Bruno, California. Susan Wojcicki who assumed office in February 2014 is the current CEO of this company, who was preceded by Salar Kamangar.
How Much Is YouTube Worth?
How does YouTube make money?
Does YouTube make money at all? Well, the channel wouldn’t have succeeded at all if it didn’t pull in its weight. One of the most common ways to increase revenue is by making use of advertisements. Like most of the Google properties, YouTube makes most of its money through advertisements.
Did you know that Google embeds targeted video ads directly into the video content that you watch? Each time the viewer clicks on an advertisement, advertisers pay anywhere from a few cents to over $50. With several user-generated content flooding the channel, ad rates dropped and advertisers went on to look for ads that reached the consumer.
Over time, YouTube overlays let the ads populate videos at various points of view, but the revenue still wasn’t enough.
YouTube introduced TrueView which includes two types of ads namely in-stream and video discovery, the revenue growth drivers of the platform. YouTube Red, a paid subscription service was also rolled out in 2015 that brings in revenue along with advertisements.
How much money does it generate?
YouTube is a big business and its numbers are slowly increasing and getting bigger by the year. Just how big the business is, depends on the net profit it makes each year. It generates approximately $16 billion to $25 billion in annual revenue, making itself a place in the top half of the Fortune 500.
Its annual revenue for the year 2020 is just a projection based on the revenue it has made in the past. From 2017 to 2019, the company made more than $34 billion in ad revenue alone, and if you add non-advertising revenue, the projected revenue comes anywhere around $16 billion to $25 billion.
How much do YouTube employees earn?
YouTube is said to be earning as much revenue as General Mills, Gap, or Netflix. Like any other company, there are various posts that employees work for and the salary for each post differs based on the employee’s competency, experience, location, and several other factors.
But on average, YouTube employees earn around 90 thousand dollars annually. In addition to that, they also earn a bonus payment of approximately 11 thousand dollars annually. They also enjoy several other benefits such as paid holiday, 401 (K), paid sick leave, optional telecommute, life insurance, disability insurance, and more.
Who are the top creators throughout the years?
Since 2005, YouTube has become the launchpad for several people looking for an opportunity to fame. In the year , YouTube began to heavily invest in their creators and decided to pay them through ad revenue.
Here is a list of the top 5 individual creators who were successful in launching themselves as the best.
PewDiePie – A Swedish YouTuber who has 106 million subscribers.
Kids Diana Show – Focuses on Diana and her unboxings and simulated play, and has nearly 60 million subscribers.
Like Nastya Vlog – Offers scripted adventure stories for kids, that are inspired by fairy tales and nursery rhymes and has nearly 59 million subscribers.
Dude Perfect – An American sport and entertainment channel with nearly 53 million subscribers
Vlad and Niki – It is a vlog that focuses on themes of togetherness and has nearly 49 million subscribers.
PewDiePie reigned the top spot for 1,920 days until T-series took over the top spot with nearly 129 million subscribers. But, T-series is a record label and film production company and not an individual creator.
Others in the list include
- HolaSoyGerman with 41.3 million subscribers
- JuegaGerman with 40.7 million subscribers
- Whinderssonunes with 40 million subscribers
- Felipe Nato 39 with million subscribers
- ElrubiusOMG with 38 million subscribers
Many other YouTubers have accomplished a lot over the years. With several new features being added to this platform, there are a lot of opportunities for success.
What are the future trends to look out for?
Numerous creators curate several hours of content that target their audience on YouTube, which reigns as the number one video sharing platform. The ever growing channel will carry a big wave in the future, with the below forecasted-trends.
- Stories and live-streaming will give vloggers the ability to diversify their content.
- Brands and influencers will be able to connect and engage their audiences in real-time using Live-streaming.
- Increased viewer engagement has pushed creators to take a strategic approach to interact with the audience and earn compelling viewership.
- Content such as “Everything You Need to Know”, “Shop with Me”, and “Does It Work” videos contribute to the online shopping experience.
- 360-degree content will take over product marketing
- ‘How-to’ tutorials are the best way to capture consumer attention.
Several trends will change the face of how YouTube will continue to work. With various new features being added day after day, YouTube will not only benefit the creators but also offer immense opportunities to marketers and viewers alike.
So how much is YouTube worth? In short, it’s not easy to tell. Since Google bought YouTube for $1.65 billion in 2006, we can’t pinpoint exactly how much it’s worth. Though, it’s estimated that if YouTube was its own entity, it’d be worth around $300 billion.
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