YouTube’s March Towards Sophistication

With over 1 billion users, YouTube has held onto the top spot for video sharing on the Internet since its founding a decade ago. Since then, YouTube has steadily grown and matured, slowly but surely transitioning from a pure video-sharing website into a sophisticated video platform with diversified content and a corresponding monetization system.

Music has long been one of the most popular content categories on YouTube, and in fact, a mid-2012 Nielsen study reported that two-thirds of U.S. teens used YouTube as their primary choice for streaming music. Not surprisingly, YouTube has been building out its music business, beginning last February when it started promoting curated playlists in search results and culminating in YouTube Music Key, its own Spotify-like subscription-based music service in late November.

However, this newfound focus on music hasn’t stopped YouTube from diversifying its content. In fact, earlier this week, the company released a brand new family-friendly mobile app showcasing its kid-friendly content and easy parental controls. The movie rental feature it introduced back in 2011 has also been gaining traction lately, thanks to the online release of controversial movie The Interview. Moreover, it has been credited with revolutionizing modern journalism by reducing entry barriers and the video game industry by enabling streaming commentary.

YouTube is also developing a correspondingly sophisticated monetization system. Besides offering advertisers guarantees on views and chances to purchase Nielsen ratings, its unique Content ID system helps content creators and media owners monetize all videos containing copyrighted material, which accounts for over a third of the monetized views on YouTube. Recently, the company has been criticized for aggressively pushing its monetization system on users and allegedly strong-arming indie musicians into strict contracts, adding to the many growing pains for YouTube on its road to online video domination.