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In part three of How YouTube Ate TV, Fast Companys oral history of YouTube, new parent Google confronts the messy issues standing in the way of the video streamer’s long-term viability. As Viacom sues over YouTube users unauthorized uploading of intellectual property, Google and YouTube engineers simultaneously build technology that will save the business. Called ContentID, it lets copyright holders remove their workor, better yet, leave it up and benefit from its monetization. YouTube also sets viewership goals that are even more wildly audacious than the ones its already achieved. First, though, Google has to convince even its own employees that buying the video-sharing service hadnt been a horrible mistake. Comments have been edited for length and clarity. Read more ‘How YouTube Ate TV’ Part one: YouTube failed as a dating site. This one change altered its fortunes forever Part two: Pit bulls, rats, and 2 circling sharks: The inside story of Google buying YouTube Shishir Mehrotra, YouTube chief product officer/CTO (20082014): The general perception inside Google was that [buying YouTube] was Googles first mistake. Every previous acquisition had worked out so well: Android and Google Maps, and even Google Docs was off to a reasonable start. But this one didnt seem like it was going anywhere.Matthew Darby, YouTube director of product management (2008present): I remember giving a talk to my team about, like, How the hell is YouTube going to make any money for Google? There was this odd thing going on in San Bruno and it was costing a great deal of money, because video is an expensive thing to serve. Mehrotra: About a month after I joined, we went to see Patrick Pichette, who was the CFO at the time. He had these three charts. The first said, here’s how much money YouTube is losing. It was hundreds of millions of dollars. The second said, here’s how much money YouTube loses per view. It was just under a penny. And the third chart showed viewership. It wasn’t just up and to the right, it was a straight line. He said, This is the worst business on the planet. Thankfully, [then-Google CEO Eric Schmidt] was in the room. He kind of laughed and said, No, no, nodon’t listen to Patrick. You guys have time. Go figure it out. But it was very clear that we were on a clock. Outside Google, media companies and marketers alike remained skeptical about partnering with YouTube. Viewers also werent wild about the prospect of marketing intruding on the experience. Michael Fricklas, general counsel, Viacom (20002017): Googles a big, responsible company, and the thought that it would be acquiring a site that we viewed as a pirate site was considered, at best, bad form. We thought big, responsible companies would behave in responsible ways.Chris Maxcy, YouTube VP of business development (20052013): [Media] companies that had been collaborative with us shifted and said, Now we cant [acquire] you, so were going to try to shut you down. Or Now you have a really, really large parent with lots of money. Its time for us to extract some.Amy Singer, YouTube development, partnerships, strategy executive (2010present): [Media companies] wanted to manage their distribution ecosystem, and so there wasnt a lot of reception to working with YouTube. Ian Hecox, cocreator (with Anthony Padilla) of the comedy duo Smosh: The Logitech deal [in 2009] was probably our first big brand deal. The audience hated that we did sponsored videos back then. Suzie Reider, YouTube CMO (20062013): There were marketers who saw it as such a creative marketing platform. I remember the first million-dollar program that we sold was a battle of the bands. We had a wireless company sponsor it. Some marketers were willing not only to use YouTube, but to embrace its spirit, such as the ones responsible for promoting the 2007 film Hairspray. Russell Schwartz, New Line Cinema president of theatrical marketing (2001-2007): When Nikki Blonsky was awarded the role of [Tracy Turnblad], she was working at a Baskin-Robbins on Long Island. We brought in a camera crew and told her, in front of all her peers, You’ve got the role. It was the most emotional thing I’d experienced. What better content do you need for YouTube than that? Once we realized the response to the piece we put up, we said, Well, this is a place we have to be. Reider: And then there were a lot of folks who were resistant to it.Tara Walpert Levy, Google ads director (20112021); VP, Americas at YouTube (2021present): It was my job to bridge Madison Avenue and Silicon Valley, to explain this new platform that looked and sounded like TV but had a lot of differences from TV. That was a hard pitch.Reider: Procter & Gamble and Unilever were saying, Were not touching it until you have the right brand safety mechanisms and control in place. How YouTube Shaped CultureGangnam Style, July 2012 In an early example of K-pops international appeal, rapper Psys music video both silly and hypnoticsurges right off YouTube to become an unavoidable cultural phenomenon. In March 2007, YouTube faced its greatest legal threat when media giant Viacom (now Paramount) sued it for $1 billion for copyright infringement by its users. But YouTube prevailed in 2013, establishing protections for itself and other online services yet to come. Zahavah Levine, YouTube general counsel, chief counsel (20062011): Viacom argued that YouTube was responsible for all of the copyright infringement of its users, who, it alleged, uploaded over 150,000 clips of Viacom-owned programming without authorization, which had collectively been viewed 1.5 billion times. This was itthe existential lawsuit we all knew was coming.Fricklas: We sent this notice saying, Take down our stuff. And [Google general counsel Kent Walker] sent a letter that said they had no responsibility. We decided we really had no choice but to bring litigation. Levine: It got worse. Shortly after Viacom sued, at least two class actions were filed against Google. One class represented sports leagues and music publishers, and the other represented all copyright holders in the world. Even as YouTub battled Viacom, it was developing Content ID, a fingerprinting technology designed to identify copyrighted material and allow owners to decide what to do with it. Robert Kyncl, YouTube chief business officer (20102022): During one of our first meetings, Eric Schmidt said, Can you figure out how to stop them from sending us paper? Meaning lawsuits. And instead, we send them paper. Meaning money.Levine: With Googles substantial resources and top talent, we developed the copyright management system that YouTube has in place today.Kyncl: The first step was getting [media companies] to embrace Content ID and use it to block content [from appearing on YouTube]. And then, Now that youve got the hang of this, how about tracking it, so you see whats happening with your IP? And then, This IP is doing well. How about turning on monetization? Many did and started to make money.Lyor Cohen, Warner Music Group CEO of recorded music (20042012); YouTube and Google global head of music (2016present): Content ID is the unsung hero of YouTube. It was absolutely the most brilliant and critical decision that our leadership has made. How YouTube Shaped CultureHot Ones, March 2015Rapper Tony Yayo chats with host Sean Evans while eating increasingly spicy wings, launching a show that will eventually host more than 300 guests, including Questlove, Conan OBrien, Billie Eilish, and Donald Duck. Fricklas: It’s a tough case to win in court that once they had Content ID in place, that [YouTube] was generating a lot of copyright damages. They could say, At least they’re not willful. So we narrowed our lawsuit to focus only on what happened up until Content ID. Mehrotra: The reason we won the case was that it turned out there were a bunch of Viacom marketing people uploading clips. They had figured out that it was a good way to drive attention to [Daily Show host] Jon Stewart.Levine: This just underscored that there is no way for YouTube to know who uploaded each video and whether they are authorized to do so. Viacom appealed, and the appeals court overturned a small part of the district courts decision, but affirmed most of it. The case was sent back to the district court, which again ruled in YouTubes favor, and the parties eventually settled.Fricklas: We needed to operate in the world of YouTube. Google was selling our adsthey had bought DoubleClick. They were buying movies from us for distribution on their devices. They were just so big we needed to normalize our relationship with them. How YouTube Shaped CultureBaby Shark Dance, June 2016Cartoon sharks, two live-action kids, and an earworm of a song add up to the mostwatched YouTube video of all time, at 16,524,112,698 views and counting. As YouTubes legal woes receded into the past, it could concentrate on building out its advertising-based business model. Reider: When were in the original offices with Chad and Steve, there was a lot of discussion about how we were never going to run pre-roll ads. Kyncl: Shishir did many things, but I would credit him with the most important thing, which was skippable ads. Mehrotra: I had written a paper. During the Super Bowl, the commercials are actually quite good. And you pause and you rewind and you watch them again. And I said, what if every commercial was good enough to pause and rewind and watch again? Why don’t you put a skip button on ads, and then when people don’t watch, don’t charge the advertiser and create an incentive to create better and better ads? Kyncl: Everybody was like, That’s stupid. Everybody will skip the ads. And he was like, No, not if you think of them as information, not an intrusion. And if you think of them as information. It means they have to be well targeted and you have to have a lot of them, different versions. It was a big moment. The focus on advertising led to goals that were on a whole new level of ambition. Kyncl: If you want to serve more ads, you need more impressions and more content. It was tied together. Mehrotra: By 2011, 2012, we didn’t have any competition anymore. Nobody quite knew why we were doing what we were doing. And somebody told this story, which I think is folklore, about a famous Coca-Cola board meeting where somebody said, Hey, are we just going to go back and forth with Pepsi at 60% share and 55% share, or is there something bigger were aiming for? Someone else said, How about we measure progress by percentage of the stomachthe liquid you drink that comes from our company? Darby: We had this goal that Shishir came up with. Mehrotra: At the end of the day it was my decision, but a group of us came up with it. We were doing a hundred million hours a day of watch time. It turned out television was about five and a half billion hours a day. We said, If we get to a billion hours a day, not only is it five times what Facebook is today, but its 10 times bigger than we are today. But its only 20% of television.John Harding, Google software engineer (20052007); YouTube engineering manager, director, VP (2007present): We did the math of, okay, if we were to serve a billion hours of YouTube every day, here is what that would look like in terms of network consumption. And then we had another graph: Heres what the internets total network capacity looks like over time. And at a certain point, those lines crossed, and we would be serving more traffic than the entire internet capacity was projected to be. And so, we had to go and say, Well, what do we need to build? Jake McGuire, YouTube software engineer (2006present): We knew that a lot of other teams at YouTubethe people making the features, the people getting the partnerswere going to have to do their part. I don’t think that we doubted it would happen. We just weren’t sure when.Mehrotra: When I left, in 2014, we had crossed the 400-million-hour line, but we were nowhere near a billion. I got a really nice call from the team when they hit it [in 2017]. Additional reporting by María José Gutiérrez Chávez, Yasmin Gagne, and Steven Melendez.
Category:
E-Commerce
Weve all heard the saying, When you change the incentives, you change the behavior, and most of us even believed it at some point. But with experience, you find that human behavior doesnt fit into such neat little boxes. People act the way they do for all kinds of reasons, some of them rational, some of them not. The truth is that incentives often backfire because of something called Goodharts law. Once we target something to incentivize, it ceases to be a good target. A classic example occurred when the British offered bounties for dead cobras in India. Instead of hunting cobras, people started breeding them which, needless to say, didnt solve the problem. Smart leaders understand that behavior is downstream of culture. There are norms that underlie behaviors, and those norms are encoded by rituals that guide everything from how you hire to how you promote, and how you determine compensation. Thats why you cant just tweak incentives. For meaningful change, you need to activate cultural triggers that shift norms from the inside out. The surface behaviors you see In 1984, Michael Dell launched his eponymous company from a college dorm room with a simple idea: bypass the reseller channel and sell customized computers directly to customers. The model gave Dell a clear cost advantage by eliminating dealer markupsand even more importantly, it allowed him to receive payment before paying suppliers This direct model was a simple idea and a clear competitive advantage, but none of the incumbent industry giants, such as Compaq and HP, managed to adopt it. It wasnt for lack of trying. The advantages of Dells model were well known, widely publicized, and seemingly straightforward to replicate. There were a number of efforts to replicate it. Theoretically, switching to a direct model shouldnt have been that difficult. If a college student like Dell could set it up in a dorm room, surely multibillion-dollar corporations could do the same. They could just easily tweak commissions so that salespeople would be incentivized to focus on selling directly to customers rather than resellers. Yet the real world isnt so simple. Consider all of the salespeople servicing retail and reseller accounts. Theyd spent years earning status within the organization by building those relationships. Its not just about financial incentives, but the identity and status conferred by the connections everybody worked so hard to build. Its not just salespeople either. Logistics would have to be completely redesigned. Longtime employees would have to sever relationships and build others, learn new skills, and do their jobs differently. Jobs are more than just transactions; theyre expressions of who we are and how we see ourselves. The norms that underlie those behaviors While Dells direct model was gaining dominance, the company that launched the PC revolution, IBM, was going through a crisis of its own. After decades of market leadership, it had become a faltering giant, losing competitiveness in the very industry it had pioneered. It wasnt until Lou Gerstner arrived as CEO in 1993 that the company began to reckon with the deeper cultural issues driving its decline. Irving Wladawsky-Berger, one of Gerstners chief lieutenants, would later explain what had gone wrong. At IBM we had lost sight of our values, he told me, and then continued: For example, there was a long tradition of IBM executives dressing formally in a suit and tie. Yet that wasnt a value, it was an early manifestation of a value. In the early days, many of IBMs customers were banks, so IBMs salespeople dressed to reflect their customers . . . IBM had always valued competitiveness, but we had started to compete with each other internally rather than working together to beat the competition. In a similar vein, when Paul ONeill took over aluminum giant Alcoa, he told reporters and analysts, If you want to understand how Alcoa is doing, you need to look at how we treat safety. If we bring our injury rates down, it wont be because of cheerleading or posters. It will be because the people at this company have agreed to become part of something important: theyve devoted themselves to creating a habit of excellence. In both cases, transformational leaders, ONeill at Alcoa and Gerstner at IBM, understood that the behaviors they were seeing were a function of norms, some explicit and some otherwise. Both also understood that if they were going to change those behaviors, they had to reshape the rituals that encoded those norms into the culture. Changing rituals to encode new norms Gerstner noticed when he arrived at IBM how the companys rituals reinforced internal rivalry. Instead of collaborating, business units often worked to undermine one anotherhoarding information and maneuvering for dominance. As he would later write in his memoir, Who Says Elephants Cant Dance: Huge staffs spent countless hours debating and managing transfer pricing terms between IBM units instead of facilitating a seamless transfer of products to customers. Staff units were duplicated at every level of the organization because no managers trusted cross-unit colleagues to carry out the work. Meetings to decide issues that cut across units were attended by throngs of people because everyone needed to be present to protect his or her turf. Gerstner understood that if he was going to change IBMs culture and turn the business around, he needed to dismantle the rituals that were reinforcing dysfunctional norms. Through company-wide emails and personal conversations, he made it clear that collaboration was now a core expectation. He even fired a number of senior executivespreviously regarded as untouchablewho were known for infighting. While Gerstner broke old rituals that encoded the infighting norms, ONeill focused on creating new ones. He introduced a simple but powerful rule: any time someone was injured on the job, the unit president had to inform him within 24 hours. But to achieve that, their vice presidents needed to be in constant communication with floor managers, which required them to create new rituals of their own. These rituals encoded new norms ofresponsiveness and transparency that were used to share information that went far beyond safety. Soon, company executives all over the world were actively sharing local market conditions, competitive intelligence, emerging problems, and best practices from across the organization. Gerstner and ONeill both achieved historic turnarounds at iconic companies because they understood how the cultural triggers of norms and rituals shape behaviors. Designing a performance culture Lou Gerstner, reflecting on his legendary turnaround at IBM, wrote, Culture isnt just one aspect of the game, it is the game. In the end, an organization is nothing more than the collective capacity of its people to create value . . . What does the culture reward and punishindividual achievement or team play, risk-taking or consensus building? Every culture encodes norms through rituals. How you hire, promote, produce budgets, and account for expenses and profits all involve ritualized processes. These reflect both explicit and implicit values that guide people on how theyre expected to act. Deliberately or not, leaders are constantly sending signals and people are constantly reading them. Its not uncommon for leaders to be unaware of the signals they are sending. Take stack ranking, which requires managers to rank employees by performance and eliminate the bottom 10%. It’s meant to encode norms of excellence. But often it does just the opposite, encouraging employees to undermine each other instead of collaborate together effectively. All too often, leaders try to shape behavior through incentives. But trying to bribe and bully your way to a performance culture is like closing the barn door after the horse has already bolted. To effectively shape behavior, you need to address the norms and rituals that underlie it. Incentives might enforce compliance, but they wont inspire passion or creativity. To build a true performance culture, it is not enough to simply plan and direct action; you have to inspire and empower belief. You do that by being deliberate and precise about how you design cultural triggers.
Category:
E-Commerce
I think these hiring managers are playing in my face. Ive been on the hunt for a new gig for a large chunk of this year, and it feels like Ive seen it all. Ive watched some appealing job listings be pulled down within hours, while others sit stagnantly for months. Ive heard tales of scammers trying to dupe job seekers; legit employers advertising phantom roles to collect talent data and present an illusion of company growth. These days, the job market is feeling like the wild wild west out here and theres no catchy Will Smith bop to dance along to. Navigating that treachery is hard enough. But Ive managed on a few occasions to escape the black hole of applications and get some interest from potential employers. With those strides, the churn has become so exhausting that it has me desperate for a much-needed Bali getaway that I ironically need a job to afford. The slog of these intricate application processes is to blame. A popular meme once asked, What feels like begging but isnt? My answer is what I refer to as the corporate Hunger Gamesa process infamously associated with startup and tech culture in which youre put through rounds and rounds of interviews, tests, and various submissions. When you go through enough of these, which can take weeks at a time, its hard not to feel burned the hell out. A few months back, I threw my fedora in the ring for a marketing role where I clocked that my experience was a perfect fit. I cooked on that cover letter, calibrated my resumé just right to fend off the ATS filters, and said all the right things on the phone screen. But that was only the beginning. Next was the video entry, which involved awkwardly responding to a series of prompts like Tell me about a time you failed via self-recorded one-minute clips. If I wanted to do an audition tape, Id sign up for America’s Got Talent, but whatever. An IRL meeting with the hiring manager followed, then two panel interviews on Zoom, and an (unpaid) assessment that devoured a whole Saturday. Several weeks later, I made it to the final boss. But it didnt matter. After much consideration . . . they went with the other guy. Same as the last two applications, where I was on the unfortunate end of a really tough decision. Its giving always the bridesman, never the groom. After a few of these corporate decathlons, you start to feel it in your spirit. The rejections sting, sure, but its the grind that really takes its toll. Every time you toil away at a resumé revampor pull another weekend shift on a pro bono case studyyoure investing pieces of yourself. And when it doesnt pan out? Its hard not to take that L personally, word to His Airness. The job hunt has a way of chipping away at your confidence until you start questioning whether the skills youve sharpened for years are obsolete. Its a solitary experience. Telling your friends or family youre still looking sounds passive, like youve just been sitting on your sofa waiting for a gig to land in your lap. They dont see the spreadsheet of job trackers. The hours of prep for interviews that go nowhere. The facepalm moment when you realize the role you were excited about is paying $25,000 less than you deserve. Im not one for sob stories, though, so this definitely aint that. Put that violin back in its case. Ive managed to maintain my sanity by treating my mental health with as much discipline as my job search. Its the boundaries for me. Three applications per day, max, and then I shut the laptop. Short walks and gym time are booked in my schedule between those virtual calls. And sometimes, yes, sitting on the sectional on a Wednesday afternoon with Highest 2 Lowest playing on the TV is acceptable. Its all about pacing yourself so you dont crash (or crashout) before reaching the finish line. Searching for a new gig in this economy is not for the weak. Do what you can to secure your bag. And give yourself grace for the things you cant control: the hiring freeze you didnt know about, the manager who already had an internal candidate in mind, the flaky recruiter. Youve got something to offer, and its only a matter of time before someone armed with hiring power (and hopefully a signing bonus) recognizes that. The Only Black Guy in the Office is copublished with LEVELman.com.
Category:
E-Commerce
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