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October 04, 2006

YouTube is Hugely Profitable - $63 million in Revenues, $45 million in profits

posted by MR WAVETHEORY at 10/04/2006 05:46:00 PM
Fortune magazine recently reported that YouTube is selling homepage placement for $175,000 per day. You got that right - it's per day. That home page costs mucho mulah. From that homepage ad alone, YouTube is making major profits.

In fact, extrapolating that to 365 days with simply multiplication, YouTube is making:


$175,000 X 365 = $63,875,000 million in annual revenues

Wow! YouTube is hugely profitable! So, how much is YouTube making in profits? Let's say the main costs are bandwidth and people. Bandwidth is rumored to be $1 million per month so $12 million in a year. People cost about $100,000 per employee and there are 60 employees so that is $6 million. So, there you have it.

$63 million Annual Revenues
-$12 million (bandwidth cost)
- $6 million (people)
--------------------------
$45 million profit

YouTube is making $45 million per year! Oops, I spilled the beans. The dirty secret is out. Big media company - eat your heart out! Maybe the figure is a bit high. After all, YouTube is probably spending millions on PR and public relations firms to get articles planted in every trade rag, but so what?

Why is YouTube so profitable? Oh, did I forget to mention that YouTube doesn't create content? Unlike ABC, NBC, and CBS, it doesn't pay actors, actresses, and doesn't have distribution costs except bandwidth. Why? Because you are making it for them. I wish I were in this business. It's about you, making content, so they can can make money. YouTube is making tons of money off You!
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2 Comments:

Blogger R2K said...

: )

7:15 PM  
Anonymous ash said...

It could be much, much more:

http://www.watchmojo.com/web/blog/?p=500

Enjoy...

6:45 PM  

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