During a panel at the AlwaysOn Stanford Summit 2006, YouTube co-founder and CEO Chad Hurley was asked by moderator Kara Swisher about disparaging comments Bill Gates made about his service at the D conference. "Speaking about competition and Gates, [he is] commenting about our business at same time Microsoft is trying to build a clone of our service," Hurley said. "We see ourselves as developing the next platform to deliver digital media worldwide."
Hurley was asked about Google Video as a competitor: "Right now we have over 60 percent of the video streaming in the US is coming form our site--all else is in the teens. We are developing a better product and continuing to innovate because we have the best team to do so. We want to stay independent and will continue to develop the product for our users." Realistically, YouTube does have a price, and the VCs who put money in the company have one too.
He added that YouTube is in a transition, building a service to deal with personal and professional content, a platform for distribution of media, providing new ways to get content in front of audiences. "It's both [personal and professional], creating a stage that everyone can participate in, not around traditional time slots, but letting users decide what they want to watch."
Regarding illegal content, Hurley said, "We are seeing a lot of positive reaction to what we have created. We aren't building a business around DMCA--we have been proactive from the beginning. Within a week of noticing NBC's "Lazy Sunday" on YouTube, we reached out to them...it took them a month to get back to us. At the end of day NBC wants to control their rights, but since that time we have a deal with NBC and we are in discussion with all the networks, studios and labels to leverage what we have done. We see ourselves as a great promotion platform." YouTube isn't trying to replace TV or the movie theatre, he added, citing the ten-minute video length and streaming approach.
YouTube clearly isn't profitable, but the young company is generating revenue and developing a new ad platform and building out a sales team, Hurley said. The business model is advertising, with banners, sponsorships and contests--users won't have to pay to enjoy the YouTube experience, he said. "We are different because we are not trying to stream full length programming. Users don't want to watch ads in 2.5 minute videos. It's the new clip culture." He also said that ads are a form of content, but that doesn't mean good content.
Michael Robertson, CEO of MP3tunes, predicted that a year from now YouTube will have ads within the videos. "YouTube will have to pollute or dilute service--it's the reality of business, a natural evolution," Robertson said. He also believes that YouTube will crush all the other video sharing sites, as long as its servers don't go down. I'd agree with Robertson's take...
Michael Robertson, MP3tunes; Chad Hurley, YouTube; David Goldberg, Yahoo; Michael Arrieta, Sony; Kara Swisher, All Things Digital