The largest video sharing website, YouTube, was founded in 2005 by two employees of PayPal, Chad Hurley, Jawed Karim and Steve Chen. It is the largest broadcasting channel where people not only share stuff, but they get to interact with each other. It has now been owned by Google Inc. Based in California, USA, YouTube has been able to gain the position of the most visited website which receives millions of clicks per minute.
Competition in the Industry
Within the industry, YouTube has many rivals like Vevo, Vimeo, YouKu Inc., Dwango Co. Ltd. But so far it has managed to keep the largest number of clientele than all of these combined. Vimeo has 100 million views per day and provides with quality entertainment however its free package let you see a limited number of videos unless you buy a premium account. YouTube has an advantage of being freely accessible to its users. (Votta, 2014)
Another rival is Dailymotion which is based in Paris and started around the same year as YouTube. However, due to lack of its originality, it has not been able to raise its status from being an alternative option to being the only option. (Votta, 2014)
Potential of New Entrants in the Industry
YouTube has established itself as a largest video hosting engine in a very short period of time. However, the technology of hosting videos has become so common on the internet that the barriers to entry in the market are quite low.
Moreover, due to the lack of restrictions on the type of posted content, some governments put a ban on YouTube for hosting offensive material which makes the company lose its business. It makes the existing rivals strong in that particular region and provides an open field for new potential competitors. However, due to the existence of proxy websites, YouTube manages to penetrate the bans. So the threat of new rivals in the market is low.
Power of Supplier
Since Google has bought YouTube, it has now become its only supplier. YouTube makes use of the Google’s technology and other facilities. It has colocation centers with Google Inc. (Waleed, 2016) Consequently it provides a lot of business to Google Inc. and holds more power in the supply chain.
YouTube despite being a large broadcasting website doesn’t work alone. It makes use of technologies from different companies to provide its best to the users. It uses TrueView for video advertisements which let viewers skip ads after five seconds. It utilizes Google huge databases to manage the data uploaded by its users. It is highly scalable. To better operate with its high traffic, YouTube uses LIGHTTPD which enhances the high performance for such hosts. Similarly, it depends on other software to function best. However, these suppliers depend on YouTube much more for their products to be utilized through a mostly visited hub of videos. (Waleed, 2016)
Bargaining Power of Buyer
YouTube provides the users with easier access to vast information and a platform to engage in social activities. So the power of the buyer is less. However, YouTube has a deeper market penetration and most of its content is posted by its consumers. So the power resting in the hands of its consumers is moderate. (Waleed, 2016)
Threat of Substitute Products or Services
Being a host of the channels, YouTube competes with the age old electronic devices like televisions with a disadvantage of having too many advertisements. YouTube earns it revenues through advertisements too but it is not at the expense of patience of its consumers. Also, the TV doesn’t nearly have enough genres of videos as the website and furthermore the access to such large library is free of cost. So YouTube is facing almost no threat from its substitutes. (Waleed, 2016)
Conclusion
YouTube hosts a thousand of short films, television episodes and hundreds of full-length movies. It has a massive collection of user-generated content which keeps on growing. It keeps people globally connected and provides them with ways of generating income.
With the network so large, YouTube bears a larger responsibility of providing the right content. For that purpose, YouTube has to devise some policies and implement them to ensure the protection of rights of its consumers.
Bibliography
• Votta, R. (2014, August 06). Meet the 5 companies trying to beat YouTube at its own game. Retrieved from The Daily Dot: https://www.dailydot.com/upstream/youtube-competitors-amazon-yahoo-comcast-vessel/
• Waleed, Z. (2016, January 27). YouTube: A case study. Retrieved from prezi.com: https://prezi.com/mhhs_fyqw2kn/youtube-a-case-study/