Monday morning. Taking the 7:15 AM ferry from Larkspur to San Francisco. Very civilized, 30 minutes from shore to shore. Hot and sunny, spare the air day, free rides on public transit in the Bay area. EV-DO enabled and checking the news for today as the ferry glides out of the harbor before powering its way to downtown SF. Plenty of news about war, famine and pillaging around the world, but not much tech news yet except the exceptional rise of YouTube.
The YouTube phenomenon is exceeding MySpace dimensions, in terms of the incredible ramp of the video search/sharing site. According to the company, 100 million "snack-sized" videos are viewed per day, which is 29 percent of the U.S. multimedia entertainment market (Hitwise), and 65,000 videos are uploaded daily to the site. About 60 percent of all videos watched online (YouTube data)--the giants AOL, Google and MSN have 3 to 5 percent each of the video search market, and MySpace 19 percent (Hitwise). Hundreds of other video sharing sites have popped up hoping to share the stage with YouTube and MySpace or get acquired by one of the bigger sites.
YouTube co-founders Chad Hurley and Steven Chen
YouTube's twenty-something founders are chatting with the media elite (YouTube CEO Chad Hurley talking with CBS CEO Leslie Moonves), making deals (NBC will share some of its programming on YouTube and make an ad purchase) and looking for ways to generate revenue without alienating the 20 million or so monthly unique users (Nielson/NetRatings). The $11.5 million in venture capital is going to run out quickly at the rate YouTube is consuming bandwidth. But, the advertisers will come, just as Disney did to promote its blockbuster "Pirates of the Caribbean" earlier this month.
What is the larger significance of the YouTube phenomenon? We aren't even close to seeing an end or predicting how the next phase of the Internet will play out. In a year and a half, a little Silicon Valley start up can significantly create a new market, amidst tons of competition, and disrupt existing markets. Now the question is what bigger company is going to pay billions to acquire YouTube and its mojo. Any ideas?