Since then, YouTube's name has become a bit of a misnomer. The moniker implies an early goal of empowering individuals to share their own videos, but as the site matured, it became an avenue for professionally produced content as well. TV networks and record labels saw it as a multi-channel distribution platform, with which they might engineer the kinds of viral trends that spring from the masses. Soon movie trailers and hit singles sat side-by-side with cover versions and cat videos. YouTube became a multi-functional tool: auditioning ground, promotional tool, political platform, news service. It became the route to stardom for Justin Bieber and PSY, the discovery point for Austin Mahone and Boyce Avenue.
And it became massively popular. Today, over a billion people visit YouTube each month; the company says its reach is larger than any cable network. Alexa currently ranks it as the third most popular site on the Web, behind Google search and Facebook; users spend an average of 18 minutes per day on the site. Google's acquisition of the company, for the now-bargain price of $1.65 billion in November 2006, led to a sophisticated ad strategy that brought real returns to publishers. More than a million advertisers use its platform today, and thousands reap at least $100,000 annually from the site.
Business Matters: What's Behind YouTube Music Service's Delays
Just as pro and amateur content coexist on the site, music label-owned clips sit somewhat uncomfortably alongside "ripped" video uploaded by individuals. (YouTube survived Viacom International's billion-dollar 2007 lawsuit alleging widespread copyright infringement, defending itself with the "safe harbor" provision of the Digital Millennium Copyright Act; the parties finally settled for undisclosed terms last month.) With both legal and dubious streams, YouTube is already one of the top music services on the Web; three quarters of young users between 12 and 24 use it for music each month. The company is believed to be exploring a paid music service that could be launched as soon as this year. Google already has contracts with the labels, but is thought to be fine-tuning the product before introducing it.
Turning free users into paying ones isn't easy; "freemium" streaming service Spotify's conversion rate is around 20%. For YouTube, the challenge may be even more difficult, as the site has been widely known as a place to hear free music for so long. (Think of MySpace in the late 2000s: It had plenty of free streams and an MP3 store, but very few buyers opened their wallets.) YouTube has already tested the waters with some paid offerings, including a pilot program for channel subscriptions beginning at 99 cents apiece and an a la carte movie-rental service. The company doesn't release stats concerning paid subscribers.
For music labels, YouTube is also an invaluable source of data that has become more useful over time. With the ability to gauge user behavior, corporate decisions -- say, which song to promote from a freshly-released album -- become easier. YouTube's features are also now increasingly integrated with Google+, its data-loving parent's social network.
It's telling that Jawed Karim has updated his description of "Me At The Zoo" to note that he's prohibited from commenting on his own video unless he obtains a Google+ account (above), which he doesn't want to do. It's emblematic of how different the site is today from its origins: What was once simply a place to share a few seconds of video from an afternoon exploring the animal kingdom has become one big piece of a very large, very interconnected media puzzle.