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How this YouTube Star makes money

YouTube owns video space: Bart Baker

Google may be still figuring out how to make YouTube profitable, but stars of the video site are cashing in.

Bart Baker, a YouTube star who is often referred to as "The King of Music Video Parodies", built a subscriber base of over 5.4 million since joining YouTube after college. Those parody videos are his primary source of income.

"The primary source that most YouTubers make money from is AdSense, so all of the ads that you see running when you're watching a YouTube video–we make money off of that," Baker said in an interview on CNBC's "Fast Money."

Google's program, Adsense, allows for content creators to receive cash from the ads that play before each video. Each ad is targeted toward the same audience that will be watching the original content itself in order to maximize every ad dollar spent.

In addition to Adsense, Baker said he receives money from iTunes and individual brand deals.

"Brands are recognizing the potential to work with people in my position who are getting millions of views daily," said Baker. "So that's something that's going to get bigger and bigger probably in the next few months."

Baker started making music video in his backyard on a green screen and now his videos have been viewed more than 1.3 billion times on YouTube.

"You have to get a lot of views for it to be lucrative but it's working for me," said Baker.

Triogem Asset Management CIO and "Fast Money" trader Tim Seymour sees plenty of value in YouTube for Google.

"I think people are not able to understand just how much this has become part of the fabric in both of the media world and the advertising world," said Seymour. "This is absolutely the strength of the stock. To me this is value."