But what about the cost of servers, bandwith etc? I think it might be in the range of  $750 million per year to as high as $1.5 Bn plus ( we will never know as Google never reveals cost of running youtube, and Google has invested heavily in this space ). I feel Youtube as a standalone business  MAY NOT be as profitable a biz as Search and might never be since barely 10% of its content is actually monetizable. But for Google, with $30 Billion revenues, Youtube losses( even if money lost is as high as say $500 million per year) is chump change considering the strategic advantage it gives visavis competition. (Microsoft online businesses lost way more last 10 years). Youtube subsidy by Google has created a monopoly which has effectively destroyed all independent video ad network business plans.
Understand this, Certain KeyWords Pay More than Others.  Advertisers will pay more for the keyword, “home mortgage” (CPC $17.63) than “cheap phone cases” (CPC $1.38) because the end return is a lot higher.  If someone ends up closing on a home loan that could make them upwards of $5,000+, whereas the end return on a cheap phone case would only be $15.  Would you rather get paid from a phone case video that gets a million views with a CTR of 0.01% or a home mortgage video that only gets 10,000 views with a CTR of 0.08% ?  Consider the scenarios below with the given keywords and their cost per clicks.
YouTube Premium (formerly YouTube Red) is YouTube's premium subscription service. It offers advertising-free streaming, access to exclusive content, background and offline video playback on mobile devices, and access to the Google Play Music "All Access" service.[206] YouTube Premium was originally announced on November 12, 2014, as "Music Key", a subscription music streaming service, and was intended to integrate with and replace the existing Google Play Music "All Access" service.[207][208][209] On October 28, 2015, the service was relaunched as YouTube Red, offering ad-free streaming of all videos, as well as access to exclusive original content.[210][211][212] As of November 2016, the service has 1.5 million subscribers, with a further million on a free-trial basis.[213] As of June 2017, the first season of YouTube Red Originals had gotten 250 million views in total.[214]
In March 2010, YouTube began free streaming of certain content, including 60 cricket matches of the Indian Premier League. According to YouTube, this was the first worldwide free online broadcast of a major sporting event.[39] On March 31, 2010, the YouTube website launched a new design, with the aim of simplifying the interface and increasing the time users spend on the site. Google product manager Shiva Rajaraman commented: "We really felt like we needed to step back and remove the clutter."[40] In May 2010, YouTube videos were watched more than two billion times per day.[41][42][43] This increased to three billion in May 2011,[44][45][46] and four billion in January 2012.[23][47] In February 2017, one billion hours of YouTube was watched every day.[48][49][50]
But what about the cost of servers, bandwith etc? I think it might be in the range of  $750 million per year to as high as $1.5 Bn plus ( we will never know as Google never reveals cost of running youtube, and Google has invested heavily in this space ). I feel Youtube as a standalone business  MAY NOT be as profitable a biz as Search and might never be since barely 10% of its content is actually monetizable. But for Google, with $30 Billion revenues, Youtube losses( even if money lost is as high as say $500 million per year) is chump change considering the strategic advantage it gives visavis competition. (Microsoft online businesses lost way more last 10 years). Youtube subsidy by Google has created a monopoly which has effectively destroyed all independent video ad network business plans.
Of course, influencers have their own interests to look out for, too. “The process of creating a brand campaign is holistic, and the cost is not standard,” says Natalie Alzate, the woman behind NataliesOutlet, a YouTube channel with almost 6 million followers. “My manager, agent, and attorney work hard to ensure that each campaign is a success, which is measured by whether the fans respond to it as well they do to non-sponsored content.”
Merchandise has become an increasingly important revenue stream for these top digital stars, almost all of whom (No. 1 being a notable exception) are in their 20s and 30s. Each of the 10 on our list now has a line of merchandise, whose blossoming sales help account for that 42% income increase from a year ago. “I’ve built this huge community, and we’ve made a lot of people laugh,” says Fischbach, who sees Cloak as the first step toward an empire built on assets more tangible than video uploads. For now, though, all those gaming clips serve as a force multiplier for the man known as Markiplier. Like any savvy businessman, he’s thinking ahead. “I’m not going to be able to make videos on YouTube forever,” he says. “I need to plan for the future.” 

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