Well it's basically just owning one or multiple servers which then request a specific youtube URL. It's not that easy because the server has to act like he's human (pretend a browser is being used, simulate the video is being watched,...). The requests are done through multiple proxies so YT can't tell they're all coming from the same computer.
This is just a very basic explanation of course.
Script + Server + Proxies = Free views
If you have ways to get all three summands of the above equation for very cheap, you can offer very cheap prices. 0.5/k is pretty damn cheap though, probably LQ, likely to drop. Where did you find this offer?