YouTube's Online Video Revenue Potential

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	YouTube's Online Video Revenue Potential

Forbes Business

8-22-2007 3:54 PM

366 views

tags:

media, google, youtube, advertising, online video

Forbes Business says:

Some back-of-the-envelope calculations by Silicon Alley Insider, followed by a spirited exchange in the comment section. - Louis Hau

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/61c7cd06-d14e-4ee4-83e4-20e012b4a586/BDD0148F-E124-49A7-A1B3-AA14FEC23BC4/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.alleyinsider.com/2007/08/youtubes-video-.html" href="http://www.alleyinsider.com/2007/08/youtubes-video-.html" style="font-size: 11px;">www.alleyinsider.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.alleyinsider.com/2007/08/youtubes-video-.html"><P><U><STRONG>FIVE YEARS FROM NOW</STRONG></U></p> <P>We also ran scenarios using a far higher number of monthly streams (range: 10 billion to 50 billion), a greater percentage of ad penetration within videos (range: 50% to 70%), and a similar percentage of ads watched as in the above scenarios (range: 33% to 60%).  Here, the revenue is far more meaningful.  In the Conservative scenario, YouTube generates $200 million of revenue: nice, but nothing to write home about.  In the Aggressive scenario, however, the company generates $13 billion of revenue--closing in on Google's current revenue today.</P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.alleyinsider.com/2007/08/youtubes-video-.html">In short, YouTube's revenue won't likely be material to Google for at least a year or two and possibly more.  The impact on the <EM>bottom line</EM>, moreover, will probably be even less pronounced: Serving a video ad, even for Google, is far more expensive than serving a text link.  At a $20 CPM, the gross margin on such ads will likely be well below Google's current margins.</blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/BDD0148F-E124-49A7-A1B3-AA14FEC23BC4/blog/" title="blog or email this clip"><img src="http://content7.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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