Online Video – Not Here Yet – How a Big Number isn’t really That Big

Comscore (via Allen Stern at CenterNetwork) reports that 11.5 billion videos were watched online in March in the U.S.  11.5 billion sounds like an awfully big number.  But it’s not.  At least not in terms of web scale.  Comscore itself estimates that total page views online are estimated in the trillions per month.  Heck even my company, Lookery, a demographic-based ad network that’s less then a year old delivered almost 3 billion ads in April. It’s estimated that MySpace and Facebook combined do more then 100 billion page views a month.

And Comscore which likely undercounts pages views by a factor of 2 to 3x is OVERstating videos.  In their stats, they estimate the AVERAGE online user watches 83 videos a month!  Seriously.  Personally I can’t believe that stat.  I’m as addicted to the Internet as the next guy and I watch maybe 30 videos a month.  Maybe.

So even if you take Comscore’s numbers at face value, 11.5 billion isn’t that big of a number when you look at the economic size of the video market.  Assuming a range of $1 to $5 cpm and 1 ad per video (any format, method, size, style doesn’t really matter), you’re looking at a TOTAL market size of just $11.5 million to $57.5 million for all online video.  That’s out of a total online ad market of about $2 billion a month.

My point isn’t to say online video won’t be or isn’t important.  It’s more a comment about the incredibly large scale required to build a large media business or market.  The media business is about a little off a whole heck of a lot.  That’s why ads are priced in cost per thousands.  And the need to have immense scale also explains why the media business gravitates towards consolidation but that’s a post for another day.  When videos viewed starts approaching trillions then we’ll be somewhere.

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5 Responses to Online Video – Not Here Yet – How a Big Number isn’t really That Big

  1. David Cancel says:

    Todd,

    Fantasticpost and right on the money. You should cross post on the Lookery blog.

    Its amazing to me how many people fail to do the simple math you did when sizing an opportunity.

  2. todd says:

    Thanks David – Good idea – I just cross posted it on the Lookery blog.

  3. Pingback: Lookery » Online Video - Not Here Yet - How a Big Number isn’t really That Big

  4. You’re probably an outlier like me — productive people. I also watch maybe 30 vids/month, but I also don’t go to YouTube to kill an hour or two every night. In contrast, between my wife and my daughter, our home computer runs through probably 150 videos per week.

    I think 11.5B is understating the actual. According to Quantcast, YouTube alone has 357M user visits/month. Alexa reports 17 pvs/visit which if you use 16 (subtract 1 I suppose for the front page) would mean that YouTube shows 5.7B vids/month. Add in all the other video sites (including, uh, porn?), and video widget distribution (blogs, myspace profiles, email, etc.) and I wouldn’t be surprised to see a number MUCH greater than 11.5B.

  5. Pingback: Sawickipedia » Blog Archive » Calling BS on Wall Street’s YouTube Revenue Estimates

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