The $1,000 CPM

Advertising is a kinda shitty model. It’s very exciting that we’re moving beyond it.

Sometime in the last year, my YouTube videos received their billionth view. At the average YouTube ad rate of $2 per thousand views (a $2 CPM), that’s around $2 million in revenue from advertising over the last eight years. Not bad!

To be fair, YouTube would have taken 45% of that money,
so really I’m only down $53,000,000.

I’m also in the bizarre position of being able to describe my feelings about this with a reaction GIF that is, in fact, me.

This Is Not Actually Impossible

Imagine that you would like to consume a piece of content, but in between you and that content is a paywall. They’re asking $15 for one person to view the content one time. While a YouTube video might net you $2 per thousand viewers, this fantasy world I’ve just described will net you $15,000 per thousand impressions…A $15,000 CPM!

Plus $85 for a small popcorn. $86 for the mega-jumbo size!

Before We Get Too Much Deeper

I want to point out the tremendous variety and quality of content that has been created within this extremely limited economic model. YouTube has helped people create at least three massive genres of cheap-to-produce, high-quality content that viewers really, really love. Video game ‘Let’s Plays’, style tutorials, and direct-to-camera monologues (which we in the biz call ‘Vlogs’) all fill those requirements and all score billions of views per month.

Felix Kjellberg, arguably the most successful YouTuber of all time, is of course known for his vlogs and ‘let’s plays’, but he’s dabbled in style as well.
I was the executive producer for the Lizzie Bennet Diaries which won an Emmy. I’m even more proud of the fact that it is one of the only narrative projects in online video to ever turn a profit, mostly because we did it on a shoestring.

People Have to Pay

Not all people, and not a ton of money, but some people.

The first thing to remember is that a $1,000 CPM (that seemingly unachievable figure) is just every viewer paying an average of $1 per piece of content. That’s not crazy; it’s iTunes.

$600,000,000 of Time… Good Lord, Sometimes I Feel Like Apologizing.

By the way…thank you to these 4300 people because…wow
Twitch reportedly takes about 60% of revenue from both advertising and subscriptions.
Creators need to create small squadrons of enthusiastic Frys instead of a giant armies of unfulfilled Benders.

Does “Just Ask” Really Work?

By this definition, “Just Ask” is not radical or revolutionary.

This couldn’t be further from the truth.
Fractured fame has the potential to be massively relevant.

That being said, there are other ways to get people to pay aside from just asking. Netflix, Hulu, and Amazon have proved that forced paywalls can work as long as the value proposition is HUGE. Meanwhile, agents, executives, and creators are all casting about for ways to create products that audiences feel comfortable paying for.

The VGHS IndieGoGo campaign hit almost $900,000, but after fulfilling all the perks, creators often only take home around 2/3rds of what they make. For a high budget production like VGHS, that leaves a lot of money to be raised elsewhere.
I spotted this at Barnes and Noble’s this weekend…I’m good friends with about a third of these people / cats.

I Swear I’m Wrapping Up Now

I’ll be honest. I’m a little bummed that advertising didn’t explode on YouTube like I expected it to. People make a lot of guesses about why this is, but I can tell you for sure that it’s not because “there’s too much inventory.” This is a crazy idea considering the huge amount of inventory on TV (far more than on YouTube) that TV has no trouble filling up.

Novelist, YouTuber, Science Communicator, Community Organizer, Educational Media Creator

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