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YouTube's Lowly CPM

When YouTube said it would start sharing revenue with its more successful producer partners, some thought the move would pave the way for a new media economy based on cheap production and equally cheap distribution. Well, as The Silicon Alley Insider and others report, even the most successful YouTube video producers won't be quitting their day jobs anytime soon if Google continues to pay producers a $0.80 per thousand viewers. Yikes.

In an interview with NewTeeVee, the producer of "Break a Leg" a popular YouTube video that garnered 2-million views, recently got a check for $1,600. A little math reveals a CPM of $0.80, and a little more math reveals that Google probably grossed about $2,133, of which it kept about $500 (Google gives its producers about 75% of gross revenue). More math: Apply that 0.25 CPM to YouTube's 3.4 billion videos streamed in January (according to comScore) and you get about $850,000 per month, or $10 million per year. As SAI's Henry Blodget says, "on a base of $20 billion of search and AdSense revenue, it's also immaterial."

Meanwhile, Google says it shelled out about one million dollars to its producer partners in the past four months, to whom, it must be said, must be a very long tail indeed.

Read the whole story at Silicon Alley Insider »

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