Chandar met me and led me into a massive conference room. In addition to being the CEO, he composes music for ChuChu. He’s the public face of the company and, at 39, a few years younger than the other four founders, who each hold an equal stake. He sent a young man to get me a coffee, and then we sat down together with his friend B. M. Krishnan, a former accountant and a ChuChu co-founder who is now the company’s chief creative officer.
Of course, influencers have their own interests to look out for, too. “The process of creating a brand campaign is holistic, and the cost is not standard,” says Natalie Alzate, the woman behind NataliesOutlet, a YouTube channel with almost 6 million followers. “My manager, agent, and attorney work hard to ensure that each campaign is a success, which is measured by whether the fans respond to it as well they do to non-sponsored content.”
Absent substantive oversight by regulators, in the late 1960s the calls for change entered a new, more creative phase. A group calling itself Action for Children’s Television began advocating for specific changes to programming for young kids. The Corporation for Public Broadcasting was formed in 1968 with government dollars. At the same time, Children’s Television Workshop began producing Sesame Street, and the forerunner to PBS, National Educational Television, began distributing Mister Rogers’ Neighborhood. These shows were tremendously successful in creating genuinely educational television. By the time children’s programming got swept up into the growing cable industry, the big channels had learned a lot from the public model, which they incorporated into shows such as Dora the Explorer and Blue’s Clues.
And I don’t just mean that the Republican Party is led by the boss of a kleptocratic family business who presides over a scandal-ridden administration, that many of his closest advisers are facing prison time, that Donald Trump himself might have to stay in office just to avoid prosecution, that he could be exposed by the special counsel and the incoming House majority as the most corrupt president in American history. Richard Nixon’s administration was also riddled with criminality—but in 1973, the Republican Party of Hugh Scott, the Senate minority leader, and John Rhodes, the House minority leader, was still a normal organization. It played by the rules.
Link economics -- For years, people in media and tech proclaimed the link economy. The idea was that you'd give away material, welcome people to link to it, and those links would bring new audiences that you could then turn into customers. But there is a basic problem, in that very few people actually click links that require them to go to other sites. As the Journal pointed out, many people simply watch a video hosted on YouTube and embedded elsewhere and don't actually visit Google's site, reducing the ability to display ads.
YouTube ads provided a big percentage of the Segarses’ income during those early days, and worked well with their content. “Our workouts require strategically placed water breaks, which easily lends itself to monetization/ads that aren’t intrusive to the user experience,” says Segars. “People even joke about how relieved they are to see ads and get a quick minute to catch their breath.” Meanwhile, that revenue allowed them to adopt a no-sponsor policy. “It has cut out a lot of monetization opportunities, but our audience is well aware of our stance and appreciates it,” Segars continues. “We think that trust is an important part of building a brand.” As a result, they’ve roped in a loyal audience that’s now willing to pay for a variety of workout programs and meal plans for sale on the Fitness Blender website.
How does a video streaming service with one billion active users per month and $4 billion in revenue not turn a profit? Ask YouTube, which couldn't break free from breaking even in 2014, according to a new report. Sources tell the Wall Street Journal that Google's video unit posted $4 billion in revenue last year, up from $3 billion in 2013, and that while the service accounted for 6 percent of Google's overall sales, it contributed nothing to earnings.
As it became clear that ChuChu videos were being watched by millions of people on six continents, Krishnan and Chandar started branching out into original songs and nursery rhymes, which Krishnan has been writing for the past couple of years. Their content runs the gamut, from an adaptation of “Here We Go Round the Mulberry Bush,” dedicated to tree planting as a way to fight global warming, to “Banana Song” (“Na na na banana / long and curved banana”).
But there is something the company could do immediately to improve the situation. YouTube knows that I—and tens of millions of other people—have watched lots of videos made for toddlers, but it has never once recommended that I switch to YouTube Kids. Think of how hard Facebook works to push users from Instagram onto Facebook and vice versa. Why not try to get more families onto the YouTube Kids app? (Malik Ducard, YouTube’s global head of family and learning, said in a statement that YouTube has “worked hard to raise awareness of the YouTube Kids app through heavy promotion. These promos have helped drive our growth. Today, YouTube Kids has over 14 million weekly viewers and over 70 billion views.”)
After Krishnan rewrote a nursery rhyme, Chandar would then take the lyrics and compose music around them. The songs are simple, but if you hear them once, you will hear them for the rest of your life. Krishnan would storyboard the videos, imagining the sequence of shots, as befitting his youthful dream of becoming a movie director. ChuChu productions are essentially music videos for kids, sometimes featuring Tollywood dance moves that Chandar and Krishnan demonstrate for the animators.
The ChuChu guys didn’t set out to make educational programming. They were just making videos for fun. How were they to know they’d become a global force in children’s entertainment? As time went on and the staff expanded, the company created a teaching series, called Learning English Is Fun, and worked with a preschool company to develop an app, ChuChu School, that has an explicitly didactic purpose. But generally speaking, Chandar and Krishnan just wanted their videos to be wholesome—to deliver entertainment that perhaps provided kids with a dose of moral instruction.
In May 2011, 48 hours of new videos were uploaded to the site every minute, which increased to 60 hours every minute in January 2012, 100 hours every minute in May 2013, 300 hours every minute in November 2014, and 400 hours every minute in February 2017. As of January 2012, the site had 800 million unique users a month. It is estimated that in 2007 YouTube consumed as much bandwidth as the entire Internet in 2000. According to third-party web analytics providers, Alexa and SimilarWeb, YouTube is the second-most visited website in the world, as of December 2016; SimilarWeb also lists YouTube as the top TV and video website globally, attracting more than 15 billion visitors per month. In October 2006, YouTube moved to a new office in San Bruno, California.