The Clicker: YouTube as viewed by "network math"

Every week Stephen Speicher contributes The Clicker, an opinion column on entertainment and technology:

In last week's The Clicker we suggested adding advertising to YouTube's streams in an effort to help alleviate what could soon become the crushing burden of their success.

In this, the final installment in the YouTube trilogy, we ask the question "What if YouTube were treated like a broadcast network?" That is to say, what would happen if we used some (very) basic and simplified television economics to look at YouTube's success? The results might just explain why VCs are circling high over video startups.

First, there's a disclaimer: wild assumptions will be used. Whenever possible there will be an explanation, but not always. Take these numbers and suggestions with a grain of salt. They're meant to demonstrate the enormous potential of micro-content. They're not intended to be a legitimate roadmap to success. In short, it would be ridiculous to take them too seriously.

Don't think that it's right to compare an upstart web company to media giants like NBC, CBS, and ABC? Perhaps not, but it's fun and who knows – perhaps YouTube will fare better than you think.

Let's start with the same example we used last week, Judson Laipply's "Evolution of Dance." As of this writing the clip has now been watched over 15 million times. For those keeping track at home, 15 million eyeballs (err... 30 million eyeballs) is enough to best all but one of last week's sitcoms -- the sole survivor being the "Will and Grace" series finale which drew a Nielsen-estimated 18.4 million viewers.

"But the Sitcom is dead," you explain. That might be true, but "Lost" sure isn't. J.J. Abrams' wildly-successful drama has been the geek favorite for almost two years. How did it do when compared with a dude dancing? Not so well; "Evolution of Dance" has now been watched more times than last week's episode of Lost (14.6 million viewers last week).

At this point some of you might be muttering to yourselves, "That's not a fair comparison. You're counting the total times "Evolution of Dance" has been watched. It's had months to hit those numbers." OK – that's true. Some might argue that, when all is said and done, that might not matter, but for argument's sake let's give in on that point.

Instead, let's use only one week's worth of data. At this point last week "Evolution of Dance" had been watched a mere nine million times. That means the clip has accumulated 6+ million views this week alone. How does 6+ million views compare to network programming? Well, most weeks this would top comedy favorites like "The Office" and "My Name is Earl." Likewise, it would prove to be kryptonite to the WB's Smallville. Heck, 6+ million views is the pinnacle of success for WB shows.

The problem, of course, with this line of thinking is the length of the clips. If you make the assumption that the average YouTube view is 3-4 minutes long ("Evolution of Dance" is actually 6 minutes long), you'd have to stream a whole lot more clips to come close to the networks with a three-hour primetime (e.g. NBC, ABC, etc.). However, the WB might just be within YouTube's grasp. Let's dive further.

In order to properly compare YouTube to The WB, we'll need to invent a new metric. We'll call it "Eyeball Minutes" or EMs for short. YouTube EMs are fairly easy to calculate. 40 million streams each in the neighborhood of 3.5 minutes comes to 140 million EMs per day.

EMs for the WB are harder to track down, but we'll take a stab at it. Let's assume that, on average, the WB attracts 3.5 million viewers for its 2 hour primetime lineup. We'll also assume that each show has the standard 45 minutes per hour of content. That means the WB's EMs equate to 315 per night.

So, perhaps YouTube isn't quite there in terms of viewership, but it's growing. Besides -- the WB had a decade head start.

Just for fun let's do one other comparison. Let's look at ad revenue:

Again we will use "Evolution of Dance" as a comparison. If you still don't think that micro-content could be a macro business, consider the following. Six minutes of network content would be accompanied by 1 minute and 30 seconds of advertising. For a show with 15 million viewers, expect an ad rate in the neighborhood of 200k per 30 second slot. That's right; "Evolution of Dance" would garner 600k dollars in ad revenue if calculated with basic "network math."

Don't get me wrong; nobody expects advertisers to pay anywhere close to these numbers for an ad on YouTube (yet). Despite the extremely captive audience and the ability to pinpoint ads to a degree that would be unthinkable for broadcast television, it's (still) a pipedream. However, if micro-content could generate even just a fraction of the broadcast ad revenue, we're talking big money.

How much money? Well, if YouTube was able to apply the same fuzzy "broadcast math" (as we did with the above "Evolution Of Dance" clip) to the entirety of its traffic, it would net them a cool $340 Million per year in revenue, and, heck, they're still growing.

If you have comments or suggestions for future columns feel free to drop me a line at theclicker@theevilempire.com.