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Lesson #5: Focus On Your Users Not Your Revenues
Article Overview: “If we wanted to, we could instantly turn this into $10 million in revenue per month by running pre-rolls [short video ads] on the videos,” says Chen. “But at the same time, we’re going to make sure that whatever revenue model we’ve built is going to be something that’s accepted by the users.”
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Free Download - Chad Hurley and Steve Chen Quotes By Chad Hurley Steve Chen |
Lesson #5: Focus On Your Users Not Your Revenues
“If we wanted to, we could instantly turn this into $10 million in revenue per month by running pre-rolls [short video ads] on the videos,” says Chen. “But at the same time, we’re going to make sure that whatever revenue model we’ve built is going to be something that’s accepted by the users.”
From day one of YouTube, Hurley and Chen have reaffirmed their commitment to creating the best possible experience for their users, even where that came at the expense of their revenues. They are not simply compassionate business men, out to making people happy instead of making a dollar. Instead, they see user satisfaction as necessary for long-term success.
“We’re building relationships with studios, networks, and labels because they’re looking for ways to reach new audiences, and we have a great platform and a great stage to make that happen,” says Hurley. To that end, he admits that the company is doing to “sell sponsorships and direct advertisements. But we are building a community, and we don’t want to bombard people with advertising.”
While YouTube has begun showing some ads, Hurley and Chen are constantly testing for new ways to do so that will be accepted among its online community. For instance, they have recently begun experimenting with how to target ads based on the video content that is being watched, along with the demographics of the viewer and their physical location. That is where YouTube’s parent company, Google, has come in handy. That way, say Hurley and Chen, their users will only see ads that are actually relevant to them.
YouTube is also testing the ability to show ads only to viewers who choose to watch them. As well, it recently announced a partnership with some of its most popular users, offering them some of the revenues from ads that are shown in their videos. “We’re really trying to develop something that works for our community,” says Hurley.
YouTube is becoming much more than just a site to visit when you are bored and want some entertainment. American presidential candidates have begun uploading their campaign videos online. Instructional videos have begun to pour through the system, teaching users about how to do everything from yoga to calculus. “This isn’t just about music videos,” says Hurley. “We want to entertain, inform and empower people with video around the world.”
Above all, says Hurley, YouTube is not about generating profits at any expense. “It’s about creating new market opportunities. Giving users new ways to be creative…We see our technology as a platform for other things.”
Many industry insiders have suggested that because of the many copyright litigations the company is now involved in, YouTube will in fact have a very short shelf life of no more than one more month or so. But, Hurley does not see it that way. Instead, because YouTube has always put its users’ priorities first, he believes the company is here to stay. “We’ve been around for awhile,” he says, “so it’s been a very long month for us.”
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