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Alexis Ohanian tweeted the Hank Green Medium post on $1000 CPM, Twitch subscriptions, and future YouTube video monetization.

Stashed in: YouTube!, internet, economics, Mobile Ads!, advertising, Twitch!, Microentertainment, @alexisohanian

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People Have to Pay.

Not all people, and not a ton of money, but some people.

The first thing to remember is that a $1,000 CPM (that seemingly unachievable figure) is just every viewer paying an average of $1 per piece of content. That’s not crazy; it’s iTunes.

The other thing to remember (and that we so often forget) is that the ultimate value exchange in content is between creator and consumer of content (not creator of ads and consumer of ads). If someone watches something I’ve made, it’s because they consider it worth the four to twelve minutes it takes to watch it (and also worth the 5–30 seconds of ads beforehand).

The time they give is extremely valuable, and not just in the froofy community-building / personal validation way that’s important to me personally. It’s economically valuable, too. If we assume that a human’s free time is worth the U.S. minimum wage, then people have spent $600 million of their time with me. That’s not the kind of thing you can disrespect.

$600,000,000 of Time… Good Lord, Sometimes I Feel Like Apologizing.

If viewers are willing to spend $600,000,000 of time with me, why don’t we just make them pay a tiny fraction of that in dollars as well?

Well first, the internet is completely disinterested in paywalls. This makes sense. There’s pretty much an infinite amount of quality content online, especially when it comes to entertainment. Why would I pay for one thing when all the other things are free? Online creators also live and die by “discovery” (figuring out how to get new eyeballs on their content) and it’s pretty hard for content to get “discovered” if everyone (including Google’s algorithms) has to pay before they can see it.

This feels like a classically unsolvable problem. We need people to pay for content, but we can’t make them pay for content.

The solution we found is so strange and so antithetical to capitalism that I’m not quite comfortable suggesting that it’s a long-term, wide-ranging solution. But here it is: We just asked.

We kept all of our content on the internet for free for anyone, but if you want to pay, you can go to Patreon and give us however much you’d like per month. Crash Course brings in over $25,000 per month this way, making Patreon our biggest single source of revenue.

twitch monetization meme subscribers subscription imgur youtube

Twitch reportedly takes about 60% of revenue from both advertising and subscriptions. (recently acquired by Amazon for around a billion dollars) builds this monetization system into its platform. Any approved creator has a $5 subscription option that grants paying subscribers special privileges on that channel. Third party plugins have been built on top of the streaming platform’s system that allow people to take tips and shout-out supporters in real time on their stream.

With this system, Twitch has very quickly become a full-time job for a huge number of creators. YouTube also recently implemented a ‘tip’ feature, though as it’s not part of the traditional culture (and it relies on Google Wallet) no one really expects it to catch on.

Read the whole Medium post: https:[email protected]/the-1-000-cpm-f92717506a4b

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