All about YouTube at five

1. Founded by former PayPal employees Chad Hurley, Steve Chen and Jawed Karim, YouTube began life in the early months of 2005.

The first video, entitled 'Me at the zoo', showed Karim at San Diego Zoo, and was uploaded at the end of April 2005. The next month the site launched its beta test.

2. Its audience growth has been astonishing since the start.

By July 2006 more than 65,000 videos were being uploaded a day. Quick to spot the site's potential, Google paid US$1.65 billion for it in October 2006. Since then, its running costs and revenues have not been split out from Google's figures. However, to coincide with its fifth birthday it announced that it was receiving two billion hits a day.

Its significance goes beyond traffic numbers; its shaky videos created new and unlikely heroes around the world. One of the earliest YouTube crazes was Hong Kong's Bus Uncle. Three million people watched the video, plus the user-generated remixes.

3. As well as user-generated content.

YouTube quickly became a source of copyrighted work, including pirate material. Music videos in particular have been a draw of the site.

"The first time You Tube actually shook me up was about three years ago when I created a playlist of music videos in my account and connected my laptop and Apple Speakers to my TV,"recalls Arun Kumar, Asia-Pacific head of digital for Mediabrands. "I watched two hours of uninterrupted music without seeing an ad or having to call a line and request a song. That's when I realised I had better learn about this stuff."

4. In 2007 and 2008 YouTube rolled out sites in traditional Chinese, Korean and Japanese.

Data from comScore Media Metrix found that in the year to April 2010, of the nine markets for which there is data, the slowest growth in unique visitors for the site was in Singapore, where visitor numbers jumped 21 per cent. The highest growth was in India, where despite low internet penetration and poor bandwidth, user numbers surged 59 per cent.

Japan is easily YouTube's biggest market in Asia. There the site had 34 million unique visitors in April. Second is India (15.6 million and third is Australia (6.9 million). Singaporeans are the most avid viewers. Figures from comScore's new Video Metrix service, which covers five markets, found Singaporean YouTube viewers watch more than 300 minutes each a month.

5. The big market that is missing, of course, is China.

YouTube has frequently been blocked by the government, handing an opportunity to local players such as Tudou and Youku. Last year it ran into trouble over a video purportedly showing soldiers beating Tibetan monks and other civilians. The site is not currently available in China.

6. The question that still hovers over YouTube, is how it will make money.

Many brands post videos to the site, and sometimes use it to copy-test their advertisements, but this does not involve a payment. Recently a Tiger Beer ad premiered on YouTube before it was launched on Singaporean TV.

Ken Mandel, regional VP of advertising sales and marketplace at Yahoo, points to a "typical" trend for all online video in Asia. "It is very nascent in terms of monetisation but growing tremendously in terms of audience usage. The advertising dollars always take longer to catch-up."

YouTube ads are sold by Google's sales team in Asia. "It's sold as part of a content network buy through AdWords, but I think using a search-like approach puts YouTube in a strait jacket. So effectively, YouTube is making money the same way search ads do albeit mostly on a CPM basis."

A further issue is advertisers' desire to appear next to professional, relevant content, rather than pirate material or poor user-generated content. For that reason, YouTube is keen to build its portfolio of long-form video, including TV shows and sport.

What it means for...

CONSUMERS
> YouTube's growth in Asia has expanded the repertoire of content available to the region's consumers considerably. It has become a key destination for viewing music videos from around the world. In Japan, a band called 294 secured a record deal after using YouTube to build a fan base.

> ˇFor some Asians, the site has proved a passport to fame. Bus Uncle became a celebrity in Hong Kong - though not everybody approved. A few months after he shot to fame, Chan was beaten up in a restaurant by three assailants.

ADVERTISERS
> YouTube has offered advertisers an easy way to extend the life of their TV ads. In some cases brands use YouTube to host extended versions of ads or complementary footage. The site also allows brands to copy-test.

> ˇThe idea of user-generated content was popularised by YouTube. Video upload contests are now a regular marketing tactic.

> ˇThe size of YouTube's audience and the amount of time people spend on it should make it a draw for online advertising. However, YouTube's development as an ad sales platform has been slow. Many advertisers have been wary of placing their content near pirate material or user-generated content. YouTube's bid to secure deals for professional content should bear fruit over time.

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This article was originally published in the 3 June 2010 issue of Media.