What comes into your mind when you hear the name “YouTube”? YouTube is a platform where people share videos, and users are able to view, rate, add to their playlists, share, comment, report, and subscribe to other users. The company’s headquarters are in America, San Bruno, California. YouTube was the brainchild of three ex-PayPal employees, Chad Hurley, Jawed Karim and Steve Chen who formed it in February 2005, and later sold it to Google in 2006 November for US$1.65 billion. Within a span of one year, YouTube already had a total of 50 million users from across the world, and this is what drove the tech savvy company Google to acquire it. Currently, YouTube is operated by Google as one of its subsidiaries.
Out of the 3.9 billion people using the internet all over the world, YouTube users add up to 2 billion.
As of August 2018, YouTube got ranked the second most popular site in the world, coming after Google which has ever since maintained its first position. In May 2007, YouTube launched its Partner Program that let people get paid for their viral content. According to The New Times, by 2008, the most successful YouTube users earned up to six-figure incomes from YouTube. For instance, in 2007, a baby named Charlie took the world by a storm when a 56-second viral video of him biting his brother’s fingers then smiling, went viral and has ever remained to be among the most-watched YouTube videos. The family behind this video had made more than $150,000 as of February 2012.
Many people have always wondered how YouTube makes money despite it being free to upload and view videos on it. Here is the answer to your troubling question. Have you ever wondered why most of the time you click a video on YouTube, the first thing you meet is a video advert which you can only skip after sometime or not at all?
- Most of YouTube’s revenues come from advertisements. One way through the adverts pay YouTube is through their sponsored videos. For a sponsored video, the advertiser pays YouTube based on the number of views the advert gets.
- Embedded advertisements is another way through which the platform makes money. Such advertisements are embedded at the beginning of the videos such that one has to watch them before the actual video begins.
- For the subscription, this is called “YouTube Red” whereby individuals who do not want to watch the advertisements pay some subscription fees so that their YouTube accounts can be free of the adverts. The company does not loose either way, since the subscription fee acts almost as a substitute for watching the ads.