TELECOM Digest OnLine - Sorted: Now Starring on the Internet: YOUTube

Now Starring on the Internet: YOUTube

Michael Liedtke (
Sun, 9 Apr 2006 13:47:47 -0500

Now Starring on the Internet:
By MICHAEL LIEDTKE, AP Business Press Writer

Internet video sensation seems like a startup straight out
of Silicon Valley central casting.

A year ago, co-founders Chad Hurley and Steve Chen were in between
jobs, a pair of twentysomething geeks running up big credit card debts
as they tooled around a garage trying to develop an easy way for
people to share homemade videos on the Web.

Now they're flirting with fame and fortune, budding media moguls in a
new entertainment era that relies on unconventional channels like
YouTube - by some measures, the leading video-sharing site, one that's
cultivated a huge audience while testing the bounds of creativity,
monotony, copyrights and obscenity.

"We are providing a stage where everyone can participate and everyone
can be seen," said Hurley, 29. "We see ourselves as a combination of
'America's Funniest Home Videos' and 'Entertainment Tonight.'"

Having graduated from Hurley's garage to a small office above a
pizzeria, San Mateo-based YouTube Inc. is capitalizing on society's
shortening attention span and growing exhibitionism to establish
itself as a window into popular culture.

It's become an outlet for sharing everything from amateur videos made
by teenagers goofing off to slick productions posted by the likes of
Nike Inc., MC Hammer and the director of the upcoming movie "Superman
Returns" to drum up demand for their products.

Meanwhile, the buzz keeps getting louder.

As April began, Hurley said people were posting about 35,000 new
videos daily at, luring even more viewers to an audience
that's already watching more than 35 million videos per day, most
lasting 30 seconds to 2 1/2 minutes.

Just four months ago, YouTube's visitors were posting about 8,000
videos a day while viewers were seeing 3 million videos daily.

The growth has been infectious, depending largely on referrals from
users who alert their friends and family to a favorite video. Many of
the viewers who discovered the site then decided to share their own
videos, a factor that continually deepens YouTube's pool of content.

YouTube's success also is being propelled by a steady increase in
high-speed Internet connections at home, making the distribution and
consumption of online video more practical.

Although YouTube was one of the first, Internet powerhouses like
Google Inc. and Yahoo Inc. and upstarts such as and are all trying to capitalize on the rising popularity of
online video.

The intensifying competition doesn't faze Hurley.

"We are at the forefront of this cultural shift," he said. "They are
all going to be chasing us."

Many analysts liken YouTube to, the hip Internet hangout
for teens and young adults snapped up last year by Rupert Murdoch's
News Corp. for $580 million. YouTube drew much of its early audience
from MySpace members looking for a place to share their videos -
MySpace has since added that feature.

Others see potentially troublesome similarities between YouTube and
the original Napster file-sharing service, which made it easy to
download free music, often illegally. It was sued and eventually shut
down for rampant copyright violations.

Like Napster, YouTube is totally free. It is also filled with video
cribbed from TV shows and movies -- clips that violate copyrights.

YouTube "has a strong position right now, but we'll have to see how
much staying power it really has," said Mary Hodder, chief executive
of, a startup offering a way to track all the video
cropping up on the Web. "You can't help but wonder whether YouTube
will eventually lose its audience the way Napster did."

In some cases, copyright-infringing postings on YouTube have helped
boost the popularity of segments originally aired on television.

For example, a short "Saturday Night Live" spoof of two men rapping
about their Sunday plans to see a movie attracted widespread attention
on YouTube before NBC demanded its removal. YouTube promptly complied,
as it does with all copyright notices, and the spoof is now featured
for free on

YouTube hasn't been sued yet and so far Hollywood studios have
described the company as a "good corporate citizen."

Hurley and Chen hope to work more closely with copyright holders to
convince them they can stimulate interest by sharing snippets
online. Indeed, some movie studios now post clips as part of marketing

In a nod to copyrights, YouTube recently imposed a 10-minute limit on
all videos, figuring that time restriction will lessen the likelihood
of massive infringement.

Not much has slowed YouTube since last May, when Chen debuted the
site's first video -- a clip of his cat, "Pajamas," pawing at a
dangling string - a few months after he and Hurley realized after a
dinner party that there was no easy way to share online video, the way
you can with photos.

In February, YouTube's 9 million U.S. visitors viewed 176 million
pages, compared with 38 million pages at Microsoft Corp.'s MSN Video
and 76 million at Google Video. (Last month, The Associated Press and
Microsoft launched an advertising-supported online video news network,
using Microsoft's technology.)

For now, the 25-employee YouTube is subsisting on $11.5 million
invested by Sequoia Capital, the same venture capital firm that helped
launch Google. Hurley and Chen hope to start selling video ads soon;
much like Google with its search engine, YouTube conceivably could
display ads hawking a product or service related to whatever video is
being watched.

But that might pressure the company to do more to block pornographic
videos. Though such clips violate YouTube's policy, the AP recently
found footage of strip-teasing women and of graphic sex scenes
promoting other porn sites. YouTube aggressively removes such
material after it receives complaints, but not before thousands watch.

Besides scaring off advertisers, YouTube's vulnerability to porn risks
infuriating parents, said Greg Kostello, chief executive of vMix, one
of the many video sites trying to catch up to YouTube. Unlike YouTube,
Kostello said, vMix uses filters to keep out pornography and other
inappropriate material.

"I can't imagine my kids coming to a site and seeing some of the porn
... that shows up on YouTube on an almost daily basis," said
Kostello, a former executive with Vivendi Universal. "And if you are
an advertiser, you aren't going to be happy if porn shows up by one of
your ads."

Hurley and Chen believe their community policing system is highly
effective, pointing to similar practices used by online auctioneer
eBay Inc. and Internet advertising service Craigslist. YouTube's
technology also blocks repeat offenders from posting videos.

Chen, 27, figures YouTube still has time to work out the kinks.

"It's kind of scary to think about," he said, "but it will probably be
another nine months before this idea really hits the mainstream."

Copyright 2006 The Associated Press.

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