Published on November 3rd, 2012 | by vlajca
Gangnam Style: How much money did YouTube make?
It’s the South Korean viral pop sensation that has taken the world by storm.
Now one internet expert has estimated that Google-owned video-sharing site has already made a $51,925 profit from merely hosting the video and creaming off advertising revenue.Web engineer Amar Pradhu, who is not affiliated with the Silicon Valley-based search giant, made the estimate on Quora, the question-and-answer website.
He guesses that Google’s costs are similar to the charges for use of Amazon’s Cloudfront service, and makes his guess taking into account Amazon’s own profit margin for that business.Taking into account YouTube’s various resolutions and supported devices and browsers, there are at least 80 different files must be encoded, stored and streamed for the 4 minute 15 second Gangnam Style promo, he says.
The amount of space required ranges from 90MB/min for high definition videos to less than 1MB/min for the lowest resolution. Based on this the total amount of space required for holding all 80 different versions of the video at standard compression ratios is about 2.8GB.Spreading this storage with a triple redundancy across a maximum of 30 locations must then cost YouTube only about $2.20 – at an estimated cost of $0.025 for each GB.
Next Mr Pradhu works out the cost of streaming the encoded files, which at the time he made his calculations had been viewed around 530million times. Based on broadband and 3G network penetration rates, Mr Pradhu guesses that 63 per cent of users watch the videos in high resolution while the rest watch in lesser formats.
Based on that, he comes up with estimates of 24PB total bandwidth consumed to stream in high resolution and 2.19PB total bandwidth for low resolution screening. At a cost of $10,485 per petabyte to stream, that means the company has spend a total of $251,658.24 for streaming in high resolution and a further $22,963.81 for low resolution.
But that’s not the end of Google’s costs. The total that its YouTube business has spent hosting the static pages on which their videos are embedded also has to be taken account. Mr Pradhu says that a standard YouTube page weighs in at about 580kb, plus another 900kb for thumbnails and other static resources.
A lot of other variables like user login management and recommendations involve back end services, which means this costs more to serve up than purely streaming videos, so Mr Pradhu estimates that the cost to YouTube was about $0.03 per GB.Mr Pradhu’s revenue estimate for the song is based on the YouTube revenue sharing model for contributors. He estimates earnings average $0.46 per thousand views which, if YouTube takes 100 per cent, means it has raked in $348,285.
Mr Pradhu admits that his answer roughly estimates a huge number of variables, and he says he doubts that even Google itself could not give an accurate answer of the profit garnered from just one video.
‘The type and energy costs of the infrastructure are closely guarded trade secrets of Google as that is how they gain a competitive advantage,’ Mr Pradhu writes.
‘The networking gear purchase/sourcing/operation wars between Google, Facebook, and Amazon are stories of delight and are shaping the energy needs of these companies, and very little about these are public knowledge, which means we cannot determine an accurate number unless someone from Google does a lot of digging and makes the info public.’
With a total size of the pages distributed for Gangnam Style adding up to 724,609.37GB, he calculates the cost of the distribution of these pages at $21,738.28.