This is stunning.
Most advertising on YouTube is not monetizeable so this CPM is for the really good stuff! So with all of Google's market power, this is the best that could be done.
This suggests two things:
- There is absolutely no market value at all to user generated video. Zero. None. Nada. Actually there is a market value, but its negative.
- The only company in the world that might have had a chance to make money with YouTube can't, and so the 1.5 Billion dollar price Google paid for YouTube was an enormous overpayment. If anyone else had gotten their hands on it they would have shut it down by now.
It also raises the question, will Google just continue to run YouTube as a community charity? How long can this continue? Growth *will* flatten at Google at some point. That point may be now but none of us is quite sure. But in any case it will come at some point. And when that day comes, the chickens really may come home to roost.
Google will have to decide if they can withstand the market ire generated by shutting down or curtailing YouTube in some way, or if they can withstand subsidizing most of the world's video consumption indefinitely. I'm really not a short term thinker. But I just can't see a way to make user generated video worth anything to anybody in the near term. This usually wouldn't be a problem but in the case of video, waiting for the long term is really expensive.
Then again, perhaps Google's proprietary network and ISP transit agreements give them a low enough cost basis to uniquely position them to subsidize the world's video consumption without getting killed. I'd sure love to get some of that Google charity directly though!