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Unfortunately the estimated cost for the infrastructure was about 1$CPM http://www.techcrunch.com/2006/04/30/did-youtube-just-raise-another-25-million/ http://
by marcus 18y ago
Unfortunately the estimated cost for the infrastructure was about 1$CPM
http://www.techcrunch.com/2006/04/30/did-youtube-just-raise-another-25-million/ http://www.techcrunch.com/2006/04/30/did-youtube-just-raise-...
35M daily videos watched = 1000M monthly videos watched
monthly infrastructure cost was estimated to be 1M USD
Which means at 1$ CPM you are barely breaking even. And that is without any revenue sharing costs.
Perhaps Google had better economy of scale but I doubt its an order of magnitude better.
- brlewis 18y agoIn 2008, I'm impressed with any online video company barely breaking even. I figure today's ventures are just attempts to build a brand in anticipation of when costs come down and profitability is realistic.
- marcus 18y agoI just reran the numbers a bit through S3 calculator and came up with 780K per month at that traffic level, so costs are already dropping but still not a very big profit margin, and that is assuming you can put ads on all your videos and you get to keep the entire 1$ CPM. And if someone puts any ads on my family birthday videos I'll be irked.
- cstejerean 18y agoI assume Google can do this cheaper than your S3 calculations. Amazon still needs to make a profit on the hosting so I assume their actual cost of providing the service is much lower. I'm not sure exactly how much lower since I don't know Amazon's margins. Anyone care to take a guess?
- marcus 18y agoNot entirely sure Amazon makes a profit on S3. They might be offering it at a price lower than cost too, to establish themselves trusting costs to go down.
- mattmaroon 18y agoOr profiting from the storage and selling bandwidth at or near cost.
- patrickg-zill 18y agoHowever bandwidth and computers and disks (storage) keep dropping every year. So if they are breaking even now, in 12 months they will be making 10-20% .