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Author: Alex Connock, Senior Fellow, Said Business School, University of Oxford
Original article: https://theconversation.com/youtube-at-20-how-it-transformed-viewing-in-eight-steps-250083
The world’s biggest video sharing platform, YouTube, has just turned 20.
It was started inauspiciously in February 2005 by former PayPal employees Chad Hurley, Steve Chen and Jawed Karim – with a 19-second video of Karim exploring San Diego Zoo.
That year, YouTube’s disruption of the media timeline was minimal enough for there to be no mention of it in The Guardian’s coverage of TV’s Digital Revolution at the Edinburgh TV Festival.
Twenty years on, it’s a different story.
YouTube is a massive competitor to TV, an engagement beast, uploading as much new video every five minutes as the 2,400 hours BBC Studios produces in a whole year. The 26-year-old YouTube star Mr Beast earned US$85 million (£67 million) in 2024 from videos – ranging from live Call of Duty play-alongs to handing out 1,000 free cataract operations.
As a business, YouTube is now worth some US$455 billion (2024 Bloomberg estimate). That is a spectacular 275 times return on the US$1.65 billion Google paid for it in 2006. For the current YouTube value, Google could today buy British broadcaster ITV about 127 times.
YouTube has similar gross revenue (US$36.1 billion in 2024) to the streaming giant Netflix – but without the financial inconvenience of making shows, since most of the content is uploaded for free.
YouTube has 2.7 billion monthly active users, or 40% of the entire global population outside China, where it is blocked. It is also now one of the biggest music streaming sites, and the second biggest social network (to Facebook), plus a paid broadcast channel for 100 million subscribers.
YouTube has built a video Library of Babel, its expansive shelves lined eclectically with Baby Shark Dance, how to fix septic tanks, who would win a shooting war between Britain and France … and quantum physics.
The site has taken over global children’s programming to the point where Wired magazine pointed out that the future of this genre actually “isn’t television”. But there are flaws, too: it has been described as a conduit for disinformation by fact checkers.
So how did all that happen? Eight key innovations have helped YouTube achieve its success.
1. How new creativity is paid for
Traditional broadcast and print uses either the risk-on, fixed cost of hiring an office full of staff producers and writers, or the variable but risky approach of one-off commissioning from freelancers. Either way, the channel goes out of pocket, and if the content fails to score with viewers, it loses money.
YouTube did away with all that, flipping the risk profile entirely to the creator, and not paying upfront at all. It doesn’t have to deal with the key talent going out clubbing all night and being late to the set, not to mention other boring aspects of production like insurance, cash flow or contracts.
2. The revenue model of media
YouTube innovated by dividing any earnings with the creator, via an advertising income split of roughly 50% (the exact amount varies in practice). This incentivises creators to study the science of engagement, since it makes them more money. Mr Beast has a team employed just to optimise the thumbnails for his videos.
3. Advertising
Alongside parent company Google/Alphabet, and especially with the introduction (March 2007) of YouTube Analytics and other technologies, the site adrenalised programmatic video advertising, where ad space around a particular viewer is digitally auctioned off to the highest buyer, in real time.
That means when you land on a high-rating Beyoncé video and see a pre-roll ad for Grammarly, the advertiser algorithmically liked the look of your profile, so bid money to show you the ad. When that system works, it is ultra efficient, the key reason why the broad, demographics-based broadcast TV advertising market is so challenged.
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4. Who makes content
About 50 million people now think they are professional creators, many of them on YouTube. Influencers have used the site to build businesses without mediation from (usually white and male) executives in legacy media.
This has driven, at its best, a major move towards the democratisation and globalisation of content production. Brazil and Kenya both have huge, eponymous YouTube creator economies, giving global distribution to diverse voices that realistically would been disintermediated in the 20th century media ecology.
5. The way we tell stories
Traditional TV ads and films start slow and build to a climax. Not so YouTube videos – and even more, YouTube Shorts – which prioritise a big emotive hit in the first few seconds for engagement, and regular further hits to keep people there. Mr Beast’s leaked internal notes describe how to do sequential escalation, meaning moving to more elaborate or extreme details as a video goes on: “An example of a one thru three minute tactic we would use is crazy progression,” he says, reflecting his deep homework. “I spent basically five years of my life studying virality on YouTube.”
6. Copyright
Back in 2015, if someone stole your intellectual property – say, old episodes of Mr Bean – and re-broadcast it on their own channel, you would call a media lawyer and sue. Now there is a better option – Content ID – to take the money instead. Through digital rights monetisation (DRM), owners can algorithmically discover their own content and claim the ad revenue, a material new income stream for producers.
7. Video technicalities
Most technical innovations in video production have found their way to the mainstream via YouTube, such as 360-degree, 4k, VR (virtual reality) and other tech acronyms. And now YouTube has started to integrate generative AI into its programme-producing suite for creators, with tight integration of Google’s Veo tools.
These will offer, according to CEO Neal Mohan, “billions of people around the world access to AI”. This is another competitive threat to traditional producers, because bedroom creators can now make their own visual effects-heavy fan-fiction episodes of Star Wars.
8. News
YouTube became a rabbit hole of disinformation, misinformation and conspiracy, via a reinforcement-learning algorithm that prioritises view time but not editorial accuracy. Covid conspiracy fans got to see “5G health risk” or “chemtrail” videos, because the algorithm knew they might like them too.
How can the big, legacy media brands respond? Simple. By meeting the audience where the viewers are, and putting their content on YouTube. The BBC has 14.7 million YouTube subscribers. ITV is exploiting its catalogue to put old episodes of Thunderbirds on there. Meanwhile in February 2025, Channel 4 also announced success in reaching young viewers via YouTube. Full episode views were “up 169% year-on-year, surpassing 110 million organic views in the UK”.