Your method two is correct.
In january, one half of the revenue was generated by video X, since half of the total watch time was spent looking at video X. This means that video X earned `100`, half of the total amount.
In february, the video earned one quarter of the total amount, meaning it earned `125`, making a total of `225`.
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But why does the first method return different results? Well, in the first method, you make the mistake of making the january watch-time minutes equally valuable as the february ones. For example, in january, each minute watched generated a revenue of `4`, while in february, it only generated a revenue of `2.5`. Therefore, saying that the video X was watched for a total of `75` minutes is correct, but saying that each of those minutes was worth `700 / 250` is not. Some of those minutes were worth `200/50`, the others were worth `500/200`.