UGC-Show me the money

After a long period(which equals few months in web-age) of an expensive marriage with pre-nupt in place, Google finally tells Youtube – What the heck, where is the money? After all the implementations, plans, and expenses for pre-rolls, post-rolls, in-rolls, top-rolls, bottom-rolls, mobile-rolls, sue-rolls, contract-rolls, bandwidth-rolls, what Google can earn from the deal is everyones guess. Operations can’t practically run this way. So here comes the new plan- kill Revver, Metacafe, and other lesser mortals in the meantime by offering content creators share in the revenue.

While Youtube plans it out, lets look at how much a user can make from Youtube if and when the feature is implemented. Take the case of poster-child of UGC – Coke+mentos videos. A quick search on Youtube gets 400 results. Don’t know which video really came first, but Diet Coke+Mentos=Human experiment: EXTREME GRAPHIC CONTENT has 3.6 million views, Nobody’s Watching Diet Coke & Mentos has 2.8+ million views, and many more comfortably having more than 100K views. How much will Google/Youtube pay for each of those views? CPC or CPM or CPA? Lets assume CPM with a high rate of $1/1000 views. With that rate, Human experiment gets $3600 and Nobody’s watching gets $2800. I don’t think Google will shoot for $1 CPM rate. 25 cents/1000 views feels more like Google. Recalculating – Human Experiment gets $900 while Nobody’s watching gets $700.

What else? These highly successful user-created videos, can serve as excellent for inventory for Google Adsense. Google can negotiate between the company(Coke in this case) and the creators and drive more page views and $$s for all 3 involved. In-roll buy the product idea from VideoEgg will look attractive in this scenario but can potentially go against Google’s principle of automation.

Not bad for a video that has near 0 production cost. and this is just the direct way to make money. Count Revver, Metacafe,….you can earn much more at the end of the day.

Revenue for Google aside, I won’t write-off Revver, Metacafe…… If the site doesn’t work in US, follow the social networking lead and spread to other countries. You never know which idea clicks with which demographic. These startups already have team, infrastructure, content in place that can take them places. Bebo and Orkut are some of the best survivors to learn from.

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