YouTube: A Peek Inside

Article Featured Image

If you cover the online video space, there are case studies you want to write, and topics you want to tackle, technologies to benchmark, comments to conjecture, and services to muse on.

But no matter which way you try to explore the sector there is always one name which, in the last five years, has cropped up constantly as a reference point: That name is YouTube.

Just to illustrate this point, I ran a search on both and for the terms “YouTube” and the term “Netflix.” Totals: YouTube 632, Netflix 171. Sure, there is no science in those results, but the numbers do emphasise the frequency with which YouTube is referred to in our world.

YouTube’s technical developments have often caused great debate. We technicians always believe we would have “done it better” or “done it differently” had we been in the driving seat. But hey, hindsight is a wonderful thing, and frankly the only person in Europe who actually has any experience of engineering a service anything like this is in fact the man who does it and has been doing it since Google took over YouTube: Oliver Heckmann, YouTube’s European engineering director.

There is, quite simply, no one better qualified to comment on the engineering of YouTube, and we’re fortunate to have Heckmann keynoting Streaming Media Europe on Wednesday, 19 October.

While I pride myself on my own passion and experience in the sector, I felt genuinely privileged when Streaming Media editor and Streaming Media Europe conference chair Eric Schumacher-Rasmussen asked me to interview Heckmann for this article. The assignment: To create a preview article to “warm everyone up and get the juices flowing for Oliver’s keynote.”

First some background: Heckman has a degree is in business economics and electrical engineering, and he has a Ph.D. in computer sciences. After his qualifications he continued working on R&D at Technische Universitat Darmstadt in Germany. Google picked up on him and approached him—twice, actually—and on the second occasion he accepted a role with them. Perhaps the fates were involved, since he mentioned that the day he accepted the job at Google, at the end of 2006, was also the day Google acquired YouTube!

Anyone who has been involved with Google will be aware that the organisational structure is quite…well…“organic,” and so although he started with the Gmail group he soon found himself closely involved with the YouTube side of the business. Initially he worked on lower layer technologies looking at internet service provider and quality of service issues, but he soon found himself involved with a broad range of engineering issues ranging from consumer-facing technologies to uploading and monetisation.

I asked him what he thought the biggest change he has had to respond to so far has been, and while I was expecting this to be a technology or regulatory change, his response surprised me: Initially the YouTube business was very focused on its consumer proposition and partnering with content providers in a broad sense, he said, but as soon as the financial crisis hit in 2008 they re-geared the teams to concentrate on monetization as the priority.

I asked if YouTube was profitable. ‘“Depending on the accounting rules you apply” is the official line, Oliver says. “With 2 billion daily monetisable views, the share of ad revenue increased year on year in 2009 and 2010.”

As they cracked the monetization models YouTube began to be effectively costless to run. A direct consequence was being able to increase the quality of service, and this is why the financial crisis had a fairly direct effect on YouTube being able to quickly introduce HD quality video.

Contrary to some popular myths YouTube uses its own content delivery network. While they initially used third party offerings, they quickly reached a scale where the effective way to operate was with their own CDN.

The traffic that this CDN handles is immense. The scale of YouTube is quite astounding, whichever way you look at it. Estimates from third parties hold YouTube responsible for anywhere from 9% - 10% of all internet traffic. Heckmann humbly says that the traffic volume varies wildly depending on where and how you measure it, but his general feeling was that it was typically around 5% to 6% of internet traffic, with the caveat that “the efficiency is all about where you place the edge caches.” The CDN is theoretically available to other parts of Google, but in practice it is mostly specific to YouTube, and sticks to HTTP/progressive download because, at scale, HTTP keeps the costs down.

With the scaling and monetization challenges addressed, I asked Heckmann about the complex challenges he currently faced. He reminded me of the 2007 incident where the government of Thailand requested that several clips that supposedly insulted that country’s king be taken down.

Censorship and Copyright Challenges

He talked to about how, if a user flags a YouTube clip, it will be viewed and approved or removed by a human operator within a few minutes. The human operator has to make an appropriate judgement there and then. While porn is relatively easy to define, knowing and defining what is an offence to the Thai people (who become irate if you offend or ridicule the king) is a very complex job. What is permissible here may not be there. Training operators to understand all these cultural aspects is a daunting task, but at least it is one which has some fairly fixed parameters, and it is just a matter of working out how to apply the rules on behalf of the publishers in such a way that it works for each part of the global audience.

This problem of censoring (or not), however, is straightforward compared to the problem of copyright. Copyright infringement is much more difficult to identify and act on. Using a technology called YouTube Content ID, content owners submit a reference file that gives identifying metadata to their video and music. YouTube can then more rapidly identify infringing uses and notify both the publishers of the infringing video and the owners of the infringed content.

Different content owners ask YouTube to respond in different ways. For example music owners are increasingly benefiting from the effective exposure that YouTube provides them, and it is not always true to say that a copyright owner is going to want the content taken down. In some cases, the content owner may want YouTube to help them monetise the infringing content.

Heckmann cited an Italian music publisher that was now making more revenue through its YouTube monetisation that it ever was through its real-world sales and licensing. If their content is spotted proliferating on YouTube using Content ID, then they may well approach the uploaders and explore monetisation deals, seeing this as an opportunity rather than a threat. 

YouTube’s Monetisation Models

YouTube has three key categories of monetisable video: individual, partner, and custom (actually, “custom” isn’t a formal category name but it is certainly true that some custom solutions are available).

The individual category really focuses on the monetization of a video that has gone viral. YouTube spots this very early as the hits score changes, and it become straightforward to contact the owner to offer ad supported monetization around their videos.

The second tier is formal partnership, where typically a publisher has a channel that attains a significant number of subscribers. At this point YouTube engages with the publisher to create a suitable monetisation package, with both parties sharing in the advertising revenue.

Lastly, there are partners such as studios and broadcasters who have the rights to well-known content and who wish to effectively use YouTube to handle their online publishing. These are custom partners who turn to YouTube for some key reasons, which hinge less on the flexibility and customisation that they may perhaps find with more focused online video platforms, and more on the 500 million to 2 billion daily users on the site whose eyeballs they can compete for. Channels 4 and 5 here in the U.K. have both recently engaged with YouTube in this way.

YouTube Live

Finally, I asked Heckmann about YouTube’s live betas. While the trials have been going well, he says it’s still a little too early for them to fix their strategy on live streaming. The events they have carried out have been successful, but YouTube isn’t sure yet if large-scale events are going to be the long-term focus, or if a self-serve/self-publishing model for smaller events is going to pan out.

One thing is for sure. YouTube remains the 800-pound gorilla in the online video sector, and while I have only scratched the surface in this interview, even that scratch has made me appreciate the impact that YouTube has had on not only the streaming industry, but also, at the other end of the workflow, an entire generation of video consumers.

Oliver Heckmann holds the wheel of a very interesting ship, and we hope you will join us at the Streaming Media Europe in London this October to hear more about the inner working of YouTube.

Streaming Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues
Related Articles

Streaming Media Europe Preview

With the addition of Connected Home and keynotes from YouTube and Virgin Media, this year's Streaming Media Europe promises to be bigger and better than ever

Connected Home 2011 Preview: Google TV, Samsung, and More

Hear leading content, consumer electronics, and standards experts discuss the challenges and opportunities involved with delivering online video to multiple devices in the home

YouTube Brings Over 1K Full-length Rental Movies to the U.K.

Announcement offers new and classic major studio releases for home and mobile streaming.

Italy's AGCOM Moves to Regulate YouTube, Other Video Sites

"YouTube is like a TV" statement may bode ill for user-generated content sites that operate in Italy