Online Video Auteurs: Keep Your Day Jobs, Part 2

Perez Hilton tells TVWeek his videos on Google’s YouTube generated 25 million views over the past three months and netted him a whopping $5,000 in revenue. That’s a 20-cent CPM. (It’s an even lower net CPM for Google, by the way, assuming a payout ratio of more than 50%. So those counting on a near-term YouTube blast-off to drive Google’s growth should put that into their pipes and…).

Now, this is very hard to believe and Perez is mad at YouTube, so for the sake of argument, let’s hypothesize that Perez is either mistaken or full of it and his videos only generated 2.5 million views. That’s a $2 CPM. Let’s further hypothesize that YouTube will triple its net payouts over the next few months. That’s a $6 CPM.

No matter how you look at it, the message to professional online video producers from this data point is similar to that of our Revver video analysis: Keep your day jobs.

Meanwhile, when Google announced that it would start selling video ads on YouTube it said it was aiming for a $20 CPM. No doubt some of Perez’s videos are unfit for advertiser consumption, but the numbers here are still startlingly low. What gives?

See Also:
analysing YouTube’s Revenue Potential
Economics of Online Video: One Tough Business
Economics of Online Video 2: Unit Economics
Economics of Online Video 3: $5 Net CPM = Keep Day Job
Economics of Online Video 4: Revver P&L
Why Hulu is Screwed, 1
Why Hulu is Screwed 2: Bad Economics                                

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