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Case study on you tube

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  1. 1. Case Study on ? By: Sunil Kumar August 1, 2007
  2. 2. Youtube- Video sharing site. <ul><li>Founded by </li></ul><ul><ul><li>Ched Hurley (Left) </li></ul></ul><ul><ul><li>Steve Chen (middle) </li></ul></ul><ul><ul><li>Jawed Karim (right) </li></ul></ul>
  3. 3. Table of content <ul><li>Dates and figures. </li></ul><ul><li>Facts about youtube. </li></ul><ul><li>Factors which made youtube a hit. </li></ul><ul><li>Launch and Marketing strategy. </li></ul><ul><li>Exit analysis. </li></ul>
  4. 4. Dates and Figures. <ul><li>Founded on 14 th February, 2005. </li></ul><ul><li>Launched its product in May 2005. </li></ul><ul><li>Got their first funding of $3.5mn from sucoia capital in October 2005. </li></ul><ul><li>Got the second phase of funding of $8mn from sucoia capital in April 2006. </li></ul><ul><li>Acquired by google in $1.65bn in October 2006. </li></ul>
  5. 5. Facts about Youtube.. <ul><li>Fastest growing website in internet industry. </li></ul><ul><li>On average 100mn videos streamed per day. </li></ul><ul><li>65,000 videos are uploaded daily. </li></ul><ul><li>You tube has 45 terabytes = 45,000 GB of videos </li></ul><ul><li>More then 13 million new users every month. </li></ul><ul><li>An average user spends 30 min on you tube </li></ul>
  6. 6. Facts about Youtube.. (contd) <ul><li>58% of internet videos are watched on you tube. </li></ul><ul><li>4 th most visited site of the world. </li></ul><ul><li>Accounts for 10% of total internet traffic. </li></ul><ul><li>$1mn per month is the cost of bandwidth needs to support such a heavy traffic. </li></ul><ul><li>The total time people spent watching Youtube since it started till it was acquired was 9,305 years. </li></ul>
  7. 7. Key Issues in video sharing. <ul><li>Lack of viable storage platform </li></ul><ul><li>Mediocre watching experience. </li></ul><ul><li>Fragmented viewer experience. </li></ul><ul><li>Youtube - Right technology at the right time. </li></ul><ul><ul><li>Videos are encoded in flash format. </li></ul></ul><ul><ul><li>Tagging of videos made it more searchable. </li></ul></ul>
  8. 8. What are the other factors which made the company a big hit?
  9. 9. <ul><li>1.) Widget Marketing: </li></ul><ul><ul><ul><li>You tube allowed user to embed video on their own webpage or blog. </li></ul></ul></ul><ul><ul><ul><li>It was popular in social networking sites like MySpace which indirectly increased the page rank of videos in google search. </li></ul></ul></ul><ul><li>2.) Distribution of popular content: </li></ul><ul><ul><ul><li>Popular television clips and hard to find video clips. </li></ul></ul></ul><ul><ul><ul><li>Saturday Night Live </li></ul></ul></ul><ul><ul><ul><li>User uploaded copyright content. </li></ul></ul></ul><ul><ul><ul><li>No registration required and no player need to download. </li></ul></ul></ul>
  10. 10. <ul><li>3.) Right technology for the desired user experience: </li></ul><ul><ul><ul><li>Videos encoded in flash format. </li></ul></ul></ul><ul><li>4.) Environmental factors: </li></ul><ul><ul><ul><li>Bandwidth become cheaper, faster and ubiquitous. </li></ul></ul></ul><ul><ul><ul><li>Online social networks like myspace had already attained critical mass. </li></ul></ul></ul><ul><ul><ul><li>Video producing technology become more cheaper e.g digital camera, mobile phone with camera. </li></ul></ul></ul><ul><ul><ul><li>People seeking online entertainment source. </li></ul></ul></ul><ul><ul><ul><li>Platform side technology become cheaper. </li></ul></ul></ul>
  11. 11. Launch and Marketing strategy. <ul><li>Launched in May 2005: </li></ul><ul><ul><ul><li>Launched as video clone of </li></ul></ul></ul><ul><ul><ul><li>Targeted mainly young adult market. </li></ul></ul></ul><ul><li>Revamped in June 2006: </li></ul><ul><ul><ul><li>Creating a general purpose video sharing site. </li></ul></ul></ul><ul><ul><ul><li>Increasing number of views by offering related content. </li></ul></ul></ul><ul><ul><ul><li>Interaction between users. </li></ul></ul></ul><ul><ul><ul><li>Offering a video player which could embed on a site like myspace. </li></ul></ul></ul>
  12. 12. <ul><li>Promotional tactics which proved ineffective: </li></ul><ul><ul><ul><li>Advertisement on </li></ul></ul></ul><ul><ul><ul><li>Asked women model to upload their videos. </li></ul></ul></ul><ul><li>Tactics which actually helped to increase the user base: </li></ul><ul><ul><ul><li>Myspace :Although it blocked youtube once but had to allow it later. </li></ul></ul></ul><ul><ul><ul><li>Tsunami footage videos bought the largest traffic spikes. </li></ul></ul></ul><ul><ul><ul><li>Distributed i-pod nano for few months to attract users which results more then a million views per day. </li></ul></ul></ul><ul><ul><ul><li>Search engine optimization. </li></ul></ul></ul>
  13. 13. Exit Analysis <ul><li>You tube was acquired by Google in $1.6bn. </li></ul><ul><li>Sequoia, who invested $11.5mn in two phases has 30% stake in you tube which worth around $495mn. </li></ul><ul><li>ROI = 43x </li></ul><ul><li>Ched Harley (CEO) got $345.6mn </li></ul><ul><li>Steve Chen (CTO) got $326.2mn </li></ul><ul><li>Jawed Karim got $64.6mn </li></ul>
  14. 14. <ul><li>Was $1.6bn acquisition justified? </li></ul>
  15. 15. You tube potential revenue.
  16. 16. You tube is wildly profitable. <ul><li>$7.5mn/month revenue from ads. </li></ul><ul><li>= Nearly $100mn/year </li></ul><ul><li>Could go up to $400mn/year </li></ul><ul><li>Next target? </li></ul><ul><li>$75bn tv adv industry. </li></ul>
  17. 17. What else did youtube brings to google other then business? <ul><ul><li>Issues </li></ul></ul><ul><li>Copyright content distribution issue. </li></ul><ul><li>Viacom sued google for 1bn </li></ul><ul><li>Actions taken </li></ul><ul><li>Google has almost developed copyright content filtering system </li></ul><ul><li>Google removes the content after the owner claims for copyrighted content. </li></ul>
  18. 18. <ul><li>Thank you </li></ul>
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