Striking writers with dreams of launching their own web studios should check out Web Video Report’s survey of web video ad rates. It sheds some light on how much money existing players are pulling in for advertising, and how much work it’ll take for newcomers to get there.
According to the survey, MySpace charges $25 CPM for a 15-second pre-roll ad, while MetaCafe charges $35 CPMs for a pre-roll. YouTube requires a flat-rate $50,000 spend within 90 days, at minimum. (We had previously reported that YouTube charges a $20 CPM for its overlay ads.)
These sites all have established audiences, obviously, so they can charge higher rates. A startup with no eyeballs will only pull in a fraction of what these sites charge (think cents, not dollars). And even then, they’ll only get a fraction of that because they’ll need to use an ad service until they get an audience big enough to justify their own sales force.
The writers may need to go through a few more drafts of their business plans before striking out on their own.