This is the detailed PESTLE Analysis of YouTube of discover how political, economic, sociocultural, technological, environmental, and legal factors can influence the company’s operations and strategy.
Background and Introduction
YouTube is a video-sharing platform that was created in 2005 by three former PayPal employees: Chad Hurley, Steve Chen, and Jawed Karim. The platform quickly grew in popularity and was acquired by Google in 2006 for $1.65 billion.
YouTube allows users to upload, view, and share videos on a wide variety of topics, from entertainment and education to news and politics. The platform has also become a popular destination for creators, who can monetize their content through advertising and sponsorships.
Over the years, YouTube has introduced new features and tools to enhance the user experience, such as live streaming, virtual reality support, and a premium subscription service called YouTube Premium. The platform has also faced criticism and controversy for issues such as copyright infringement, misinformation, and harassment.
Despite these challenges, YouTube remains one of the most widely used and influential platforms on the internet, with over 2 billion monthly active users and over 1 billion hours of video watched every day. The platform has also become an important cultural and social phenomenon, with YouTube creators and communities shaping trends, conversations, and even political movements.
Company Information
| Attribute | Information |
|---|---|
| Company Name | YouTube, LLC |
| Founders | Chad Hurley, Steve Chen, and Jawed Karim |
| Year Founded | 2005 |
| Headquarters | San Bruno, California, USA |
| Industry | Video sharing |
| Products and Services | Online video platform for user-generated and professional content |
| Revenue | $19.77 billion (2019) |
| Net Income | Not publicly disclosed |
| Employees | Over 10,000 (as of 2021) |
| Parent Company | Google (acquired in 2006) |
| Users | Over 2 billion monthly active users (as of 2021) |
| Content | Over 1 billion hours of video watched daily |
| Monetization | Ad-supported model, with revenue shared with content creators through the YouTube Partner Program |
| Features | Live streaming, virtual reality support, premium subscription service (YouTube Premium), community features such as comments and social media integration |
| Controversies | Concerns over content moderation, copyright infringement, and misinformation, among other issues |
| Social Responsibility | Various initiatives to support creators, education, and social issues, such as the YouTube Learning Fund and the YouTube Giving program |
| Environmental Responsibility | Committed to achieving carbon neutrality by 2022 and 100% renewable energy by 2030 |
Political Factors
The political factors become a source of growth for an organization when they create favorable conditions for a business entity. On the other hand, when the political environment of a country is hostile and not supportive for business growth, generating high level of the sales and revenue becomes a challenging task for an organization. YouTube is a product owned by Google that is significantly affected by the political climate of a country. Along with that, the policies devised by the government about the display of content through information sharing and online streaming portals such as YouTube can also limit the revenues of the company.
For instance, the display of offensive content has resulted in the blockage of YouTube in some regions of the world, which has resulted in losses for the organization (Hook & Bokhari, 2015). Another area where the interplay between political component and YouTube seems apparent is the way YouTube is used as one of the social media tools for reaching the masses during political campaigns and influencing the political opinion and engagement of the public (McKinney & Rill, 2009).
Economic Factors
The economic forces of a domestic as well as international market shape the business growth prospects of an organization or an industry. The income of the people drives the use of internet and the purchase of internet packages. A downward trend in the economy leads to selection of internet packages that cover the necessary internet use, in such a case, the use of YouTube may be negatively affected as people may reduce the internet use for the purpose of entertainment. Recession doesn’t directly affect the profitability of the organization as it is not a manufacturer of any tangible product, however the buying behavior of the population changes, which has an impact on the consumption of internet. Another aspect of company operations that is adversely affected due to economic turbulence is the frequency of advertisements that displayed on its social media portal.
The budget allocated for advertising is adjusted according to the economic robustness of a company and the advertisement expenditure may be reduced to manage the cost of operations, thus reducing the profits that YouTube generates through advertisement (Google Inc., 2014). On the other hand, economic stability carried positive implications for YouTube as the company can gain benefit from the increased number of people from the population that become users of internet. The economic stability also brings in significant amount of profits in the domain of advertising as the companies seek to market their product through running the commercials on YouTube.
Social Factors
The variations in culture formulate an important part of YouTube as it’s a global brand, accessible to different people in various countries. The socially diverse workforce of the organization also indicates the way socio-cultural component can be a challenge for the organization. The content displayed on YouTube needs to be in accordance to the taste and preference of the viewers. The advertisements are also made in accordance to the preference of the target population.
YouTube as a part of social networking domain offers video sharing platform to the people, which is regulated as per the needs of the people. As noted earlier, YouTube has been used to influence the public in case of political orientation; a similar effect of the video sharing platform can be seen in the use of YouTube for managing social perception of the public.
Technological Factors
YouTube is a subsidiary managed by Google Inc. that serves as a dominant means of sharing of online content among users of internet. The management of YouTube operations is significantly dependent on the integration of high end technology that provides people with the quality experience. Google Inc. (2014) reflects the use of modern form of technology to make sure that YouTube is able to tackle the competitive pressure from its rival companies that are engaged in the regulation of video sharing platforms and social networking websites.
New forms of technologies keep on emerging and it is necessary for a business to recognize the technological advancements happening in the industry and take required measures to be a part of the technological development and growth.
Technology can be used to develop new forms of products as well as enhance the functions and features of the existing products. In case of YouTube, the use of technology can help in improving the quality of video sharing experience for the users as well as offering them greater degree of connectivity and ability to access the platform through various gadgets.
For instance, the improvements made in video technology can be attributed to the inclusion of HTML5 which offers the people ease of viewing the video content on their devices (Lardinois, 2015). The speed with which a video can be uploaded on the platform gains support through the high quality technology put in place by the management to facilitate its customers.
Environmental Factors
Ecological and environmental protection has gained a special focus by various organizations as the governments and general public stress the importance of environment protection and community support from the corporations. As mentioned before, YouTube is being operated by the parent company Google Inc. The socially responsible business practices of Google are also reflected in the management and operations of YouTube.
For instance the focus on clean energy and effort to protect the environment has been embraced by YouTube as well. Google is using YouTube for spreading the message of its environment protection policy to the public.
Legal Factors
The domain of online video sharing is exposed to the legal components of copyright laws and intellectual property regulations. Since YouTube is a video sharing set up which can be used by the public, there is a possibility that the members will end up loading the content that is a violation of copyright laws. In such cases, the management has to take swift action by removal of the content.
Another area where Google has to deal with legal matters pertaining to its subsidiary is the illegal download of content (Google Inc., 2014). The telecommunication companies and government can also place law based restrictions on YouTube.
References
Google Inc. (2014). Form 10-K. Retrieved from https://investor.google.com/pdf/20141231_google_10K.pdf
Hook, L. & Bokhari, F. (2015). Pakistan lifts 3-year ban on YouTube. Financial Times. Retrieved from http://www.ft.com/intl/cms/s/0/b878b146-be09-11e5-9fdb-87b8d15baec2.html#axzz3yWkQI5ra
Lardinois, F. (2015, January 27). YouTube Now Streams HTML5 Video By Default. Tech Crunch. Retrieved from http://techcrunch.com/2015/01/27/youtube-goes-html5-flash-is-now-deader/
McKinney, M. S., & Rill, L. A. (2009). Not your parents’ presidential debates: Examining the effects of the CNN/YouTube debates on young citizens’ civic engagement. Communication Studies, 60(4), 392-406.