Monetizing User-Generated Content

Fred analyzed the advertising-based monetization potential of YouTube, and came up with $150m.  His math looks like this:

Serving up 100m videos daily
80%are monetizable
$15 CPM for 10 sec pre-roll ad
After revenue sharing, $150m to YouTube annually
(There’s a further-detailed spreadsheet screenshot on Fred’s blog)

Jason Calacanis disagrees.  His figure is $20m and the disagreement is on the CPM rate. Jason thinks $2-3 CPM is more likely.

My guess would be between the two figures, probably closer to Fred’s numbers.  I think $2-3 CPM is too low – knowing what ad rates even in Turkey are, I think contextual ads on YouTube should be able to fetch more.  On the other hand, I have doubts about the % of monetizable content.  If I just filmed my daughter and uploaded the video to YouTube, I doubt my mother would be up to watching an ad before she sees footage of her granddaughter.

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