Derral Eves - The YouTube Formula

That decision to pivot led to YouTube becoming the most powerful video platform in the world and disrupted the entertainment industry as we knew it. It was a game changer in video entertainment, taking creation from the hands of the few to the hands of everyone, if they so desired. With access to a recording device and an Internet connection, anyone could broadcast a video to the entire world! This is the norm today, but think about how monumental it was in the beginning. Big businesses and brands started to pay attention, changing their content creation and advertising strategies. With power shifting to the regular joes, brands seized on the opportunity to sponsor creators who had a unique, organic viewership. Big business had never had this kind of competition before, and it was a force to be reckoned with.

The website continued to grow quickly. Google saw the early potential of the site, and they acquired YouTube in 2006 for $1.65 billion. Today, more than one‐third of all Internet mobile traffic comes from YouTube traffic. There are more than a billion combined hours watched on YouTube every day, and almost two billion logged‐in users visit the site every month. Nearly 100 countries have local versions of the platform available to them.

Do you think all of this would have happened if the guys had ignored the data feedback, deciding to stick to their original plan, and insisting that YouTube had to be a dating website? They had tried the dating website, and it had failed. So they focused on the problem, analyzed what was working and why, and they adjusted their strategies to support more of that.

YouTube's origin story is the ultimate meta‐example of how to try, fail, analyze, and adjust to succeed on YouTube. This formula is the YouTube Formula. Understanding its history will help you as a creator or business understand how to utilize the formula for your own success. You have to analyze what's working and what's not, and make changes accordingly. This is the premise on which the whole book is built. If you can grasp this “big idea” foundational formula, you're starting out on the right foot, and you're ready to learn the step‐by‐step tweaks that make all the difference in the wide world of YouTube.

In Part I, I break down the algorithm so you know exactly how the YouTube platform works in order to become a part of it. In Part II, I open your eyes to the endless opportunities available on YouTube—opportunities for exposure, artistry, collaboration, sponsorship, merchandising, and business ownership. I tell you how all different kinds of creators and businesses have seized on these opportunities and gone beyond “making a living” from YouTube. There is so much money to be made in so many ways on YouTube, but even more, there is so much power in influence. I can show you how your influence can make a big difference.

In Part III, I dissect the YouTube Formula for content planning, creation, execution, distribution, analysis, and adjustment. I teach you how to find your audience, speak to them, and convert them into your own loyal community. I teach you the importance of traffic sources so you know where the viewers come from and how you can get your content seen. I help you read metrics graphs so you can recognize data patterns. Your YouTube success depends on developing these skills, so get ready to learn and embrace them.

I've helped countless YouTube channels tap into growth opportunities they could not see on their own. And I've helped creators and brands learn the steps to get views, make money, and build businesses. If you follow the Formula and open your mind to the opportunities I am going to show you, you can get the results you've always wanted on YouTube.

In order for us to understand how YouTube really works, first we need to look at how it operates as a digital ecosystem. A digital ecosystem works much like a natural ecosystem: there are a lot of moving parts, and all of those parts affect the organization as a whole. Grade‐school science taught us about energy flow in a natural ecosystem; photosynthesis, plants and animals, decomposition, and nutrient conversion are all part of the cycle. Every factor in the chain has its job to do, and if it doesn't work right, it affects the entire operation.

YouTube's ecosystem also has a flow and cycle, and its contributors affect the whole, for better or for worse. This digital ecosystem includes the creator, the viewer, the advertiser/brand, copyright holders, multichannel networks (MCNs), and YouTube itself.

Here's a quick summary of how the YouTube ecosystem works: creators make videos and upload them to YouTube. Brands pay YouTube to run advertising alongside uploaded content, either before or during a video. When a channel meets the ad sharing program requirements, it gets a cut of the money from the ads running on their content. Brands also connect with creators who they think will be able to increase brand awareness and/or their bottom line. This influencer marketing is a huge part of YouTube's ecosystem. The viewers come to interact with content, creators, and communities. They watch, subscribe, comment, like and dislike, save, and share. YouTube as a website is the host of the ecosystem, but as a company, it's a part of the ecosystem. YouTube the company has to make sure everyone in the ecosystem is satisfied. They field complaints and legalities. They ultimately make the rules, but the rules evolve over time based on feedback from the ecosystem and what needs to be addressed. MCNs played an important role in the beginning of YouTube, connecting brands with creators and managing other elements of the creator experience. They also helped try to problem‐solve because YouTube didn't have the creator support at the time. Creators don't have to work with MCNs; they can manage their own channels and deal directly with brands or work with agencies to connect with brands. Finally, copyright holders want their original work attributed to them without being stolen or copied. They want to keep any financial benefit from that content coming back to their original content.

To be a part of this digital ecosystem, understand the role each contributor plays, especially the role you intend to occupy. For example, if you are a creator, become familiar with YouTube's guidelines so your content can get monetized and stay monetized. Don't steal or copy someone else's content, but if you intend to use clips of scenes or songs or any other copyrighted material, know how to go about it legally. Your content's success depends on your understanding your role in the ecosystem. Your YouTube experience should be more than starting a channel and uploading videos. In fact, if this is your methodology, your video will never reach viewers. YouTube rewards original content that's made for a specific audience, so if you learn the system and follow the rules, your videos have a greater chance of being seen.

The first consideration in the ecosystem should be the viewer. If nobody is coming around to watch, the rest of the ecosystem is dead in the water. When YouTube was new, the viewers were a fairly specific demographic because the content was fairly specific. People were uploading personal videos to share with their friends and family, so there was an audience there, but where the viewership really had the potential to grow pushed in the entertainment direction. People were uploading clips from TV shows, movies, comedy bits, and the like. Viewers were also coming to find clips from popular culture and the news. It was easy to upload this stuff, and it was easy for the viewers to find.

From 2005 to early 2007, YouTube users had been uploading content generally unregulated and unsupervised. This included a lot of original content, sure, but it also included protected content that had been created by another person or company. Obviously, this was a direct infringement to the copyright holder of that content.