Chad Hurley Interview Notes from 2005

YouTube is marking its fifth anniversary this month.

It felt like a good time to go back to the notes from my October 2005 interview with co-founder Chad Hurley; I'd interviewed him while working on this New York Times story about video-sharing sites, which compared YouTube to other start-ups that helped publish your videos, like Vimeo and Blip.tv.

When Hurley and I spoke, the company was still being funded only by its founders; by the end of the year, they'd taken a $3.5 million investment from Sequoia Capital, and by October 2006, Google had acquired YouTube for $1.6 billion.

These are interview notes from my phone conversation with Hurley, lightly cleaned up. It's interesting how determined Hurley was to make the site easy to use for consumers, and to attract up an audience first before introducing advertising.

Video, we felt, really wasn't being addressed on the Internet.

Last summer, I was in Italy, and I took some video clips on my cell phone. But with cell phones or still cameras [that could record video], you'd get it onto your computer, and there was no easy way to share it, no services like Ofoto or Shutterfly. [Co-founder] Jawed [Karim] has thousands of clips on his computer.

There were problems with all the different formats [and whether you had the right plug-ins to view the video in your browser.] We were focused on making a product that had a consistent kind of experience. We started encoding these video files on the fly into Flash video, so they would seamlessly integrate into the Web page.

We all have parents on the east coast and in the Chicago area, and we wanted to make something that everyone could use, easily.

We're receiving thousands of public videos per day, and serving up hundreds of thousands of views every day.

We let people upload files of up to 100 megabytes, which is a very generous amount of space. But we're trying to prevent people from uploading 'Spiderman.'

[As for people posting copyrighted content to YouTube,] as we expand, we're hoping the community will become more responsible.

We feel like the video market is in a place where the digital photography market was a few years ago. We think we have a good head start on the rest of the competition. In the next few years, users are going to start adopting video more widely.

We're purposely trying not to add too much to the site. We want to just empower people with video. With our PayPal experience [all three founders had worked at PayPal previously], we allowed anyone to accept payments, which really empowered them. We want to do the same thing for video, and create a solution for everyone. You don't need to be an advanced videoblogger to know what's going on. We're making a straightforward product that people can use.

Right now, we're concentrating on the user experience. We feel that's the most important thing — serving customers. But it's clear that we're going to be an advertising-based product. We're not sure what direction we're going to head with that, but we won't do force-fed video commercials in front of a video, like where CNN forces you to watch a 15-second commercial before you see a video clip.

We've been taking video of the genesis of the company, shooting with digital [still] cameras. They take pretty good movies.

Wonder if that video has ever surfaced....

Disney's CEO, YouTube's Founder, and Wired's Editor Debate the Future of Monetizing Content

"The Digital Chiefs," a lunch panel earlier this week organized by the Hollywood Radio & Television Society, was one of the best conversations about digital media I've been to in a long while.

That was primarily due to the organizer's choice of a moderator: Disney chief executive Bob Iger. Having Iger asking the questions offered a really interesting window into what's on the mind of at least one major media CEO.

And that was mainly how Disney and other media companies will earn money from their content.

Iger's panelists were Wired editor Chris Anderson, YouTube co-founder Chad Hurley, Hulu CEO Jason Kilar, and Jonathan Miller, chief digital officer at News Corp.

I'm posting some audio (a little quiet, but listenable) below, along with a few rough notes from the discussion.

My notes:

Iger opened by mentioning that TV took thirteen years to reach 50 million people. It took Facebook nine months to get 100 million members. 400 million videos were streamed on Hulu last month. YouTube offers more than 100 million videos (there are 526,000 search results for "Disney.")

Chris Anderson noted that iTunes succeeds in getting people to pay for content by selling convenience. While you can get music for free, the iTunes version saves you time, and ensures you're getting something of good quality.

Iger said he was "mildly encouraged by that -- not giddy, but encouraged."

Chad Hurley said YouTube is introducing more ad formats to help the site's partners earn money, so they can continue to create high-quality content. Iger wanted to know if there will be ad messages online that can sell a product as well as a 30-second spot on television. Hurley didn't have a forceful answer, noting that online there are multiple formats, from text ads, graphical ads, and 5, 10, and 15-second video ads. What's important, though, is that these digital ads can be targeted and relevant, unlike typical broadcast ads.

Iger said that monetizing social networks remains a big question mark. He asked Jonathan Miller whether MySpace fell prey to a "next-best-thing" phenomenon (being supplanted by Facebook), or just didn't stay on top of its game. Miller conceded that MySpace forgot that there is a continual need for reinvention.

Picking up the theme of targeting, Miller suggested that advertisers will pay more for online ads as behavioral targeting increases (targeting ads based on what you do online and interests you express), though he admitted that online ads may never achieve the same prices that network television commands.

Miller touched on the idea that the costs of content creation may need to go down in this new world, if advertisers aren't paying the prices they once did. (That's a point we discuss pretty frequently here at CinemaTech.)

Jason Kilar said that Hulu has been finding that people remember brands in the ads on its site better than they do on TV, even when it's the very same ad placed in the very same program. People are simply more engaged online, he suggested. They've made a conscious choice to watch that piece of content. By virtue of placing fewer ads in a show on Hulu (relative to the same half-hour on television), Kilar said, they can charge more for them.

Kilar also said that when Hulu's team designed the site, they didn't want it to look like "Tokyo at night," with lots of features and buttons and teasers. They very deliberately focused visitors' attention on the shows and the ads.

Miller pointed out that on Hulu, 70 percent of the ad revenue goes to the content creators. Iger followed up by saying that 70 percent of much fewer ad dollars than television generates may not be enough money for media companies to continue to invest in high-quality content.

Talking about paid rentals and downloads, Hurley said that YouTube will begin experimenting with both with its content partners.

Diving into some of the topics covered in his book Free, Chris Anderson suggested that for digital products, free samples are becoming a replacement for advertising. "The products sell themselves," he said.

Jason Kilar said that the content that will do best in this new world is stuff that is unique, totally original, and can't be substituted with anything else. He offered NBC's "30 Rock" as an example.

Toward the end, Iger asked his panelists what new things they're following. Anderson said he was watching videogames, iPhone apps, and "more granular social networks" like Ning that bring together groups with narrow interests. Kilar said he was following changing consumer tastes using search.twitter.com, mostly related to Hulu. He said that Hulu makes changes to its site based on what people are saying on Twitter.

I left a bit before the panel was over to head to a meeting, but here's more coverage of the panel from the LA Times' "Company Town" blog and from Variety. (Seems like I didn't miss much...)

And here's a 30-minute audio segment from the panel (just click play below, or download the MP3 file.) Bob Iger is the first and last to speak in this clip.



Photo of Chad Hurley and Bob Iger, above, courtesy of Getty Images.

YouTube will start testing home-grown video-filtering software in July

That's according to this story broken today by the Wall Street Journal. Kevin Delaney writes:

YouTube Partner Development Director Chris Maxcy in an interview said the company was building its own video-fingerprinting technology, after concluding that existing technology from other providers wouldn't meet its needs. Video fingerprinting is based on the premise that any video content has unique attributes that allow it to be identified even from a short clip -- just as a human fingerprint identifies a person.

YouTube and other video-sharing sites hope the technology will spot television shows and films posted by consumers without the content owners' permission, so the sites can remove them or share advertising revenue. Google Chief Executive Eric Schmidt has said that fingerprinting technology is key to resolving copyright battles between media and technology companies over online video, such as Viacom Inc.'s $1 billion suit against Google filed in March. Some media executives have accused YouTube of dragging its feet in implementing such technology in order to profit from copyright infringement as long as possible, a charge the video site has denied.

Disney and Time Warner are involved with the test; YouTube CEO Chad Hurley says the company will open up the fingerprinting technology to all content owners by this fall.