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Monetizing YouTube: How YouTubers Make Their Money
Updated: Oct 10, 2017 / Article by: Azreen Azmi
How does making money off your passion sounds to you? Pretty good right?
Well, what if you can do it in the comforts of your home? No bosses to report to, no deadlines to chase, and no fixed working hours.
Sounds like a dream job!
For most people, that is what a career as a YouTuber seem to encompass. Just sit down in front of a camera and do videos about eating food, doing makeup tutorials, or just playing video games and you’ll be making money from all the views you get.
Here’s the thing, being a YouTuber is not as easy as it looks, and if you’re thinking of jumping into the world of YouTubing, there are two big questions that you need to be aware of:
How much money does a YouTuber make?
Should you do it?
With that in mind, let delve into the inner workings of a YouTuber and figure out whether being a content creator on YouTube is worth it.
How Much Do YouTube’s Top Earners Make?
Before we get down to the nitty gritty of making money as a YouTuber, let’s take a look at some of the biggest YouTubers around and figure out how much they make exactly.
A research by New Media Rockstars sheds some light on how much the big channels on YouTube earns and a number of them can earn a substantial profit off of their videos and subscribers. One such YouTuber is PewDiePie (Felix Kjellberg), who commands over 500 million subscribers on his channel with an average 1.5 million views per video.
Being the number one subscribed channel in YouTube, PewDiePie easily earns over $12 million annually from all his endeavors and beyond. Another channel, the gaming and entertainment-centric Rooster Teeth Company, earns $13 Million annually, while smaller channels such as Nigahiga and Epic Meal Time earns an annual $2.9 million and $3.1 million respectively.
Generally, if you’re a consistent content creator on YouTube, you can make a pretty decent living on the platform through your videos.
How Do YouTuber Make Their Money?
Now that you’re familiar with who are the big earners in YouTube, let’s take a look at how exactly they make their money and how it can apply to you. Basically, there are two main ways to earn on YouTube and they are:
YouTube ads and partnership programs
Sponsors and external revenues
If you’re deadset on using YouTube as your platform, you should probably make sure that you have a YouTube account that’s set up to make money.
1- Built-in YouTube Monetization /
Let’s say you’ve already got a channel set up and have uploaded a few videos, you can immediately start earning on YouTube by turning on the enable monetization for your account and signing up for Google Adsense.
Turning on monetization on your account basically allows you to earn money from your original content by ads that are placed on your videos when it’s being viewed. While as the Google Adsense is to help you set up payment information and to allow Google to put ads on your videos, which is where you’ll earn the bulk of your actual YouTube money.
Finally, you’ll need to apply for a YouTube Partnership program program which will give you a few benefits on your account, such as analytic tools, advanced editing tools, and the ability to upload videos longer than 15 minutes. In order to become a YouTube Partner, you’ll need to have 10,000 public views on your channel (i.e. 1,000 views on 10 videos) and be reviewed by YouTube to be a certified YouTube Partner.
Once you’ve got all that done, we can finally jump into the actual numbers of how much you can earn via YouTube.
Advertisements are the backbone of every established YouTuber and odds are, you’ve come across them. The ad clips in the beginning of a video or a pop-up ad at the bottom of video is how every YouTuber makes money from their videos.
Once you start monetizing your videos, you can choose how you want the ads to appear on your videos and how much revenue you’ll receive will depend on how your audience reacts to it. While it’s the most straightforward way to earn money on YouTube, it’s also the most complicated due to the way YouTube calculates it.
How are ad rates calculated?
YouTube counts impressions (when a viewer clicks on or watches your ads) and for every 1,000 impression, you’ll get roughly $7.50. The problem is how the impression are counted, as it is really dependent on how engaged your audiences are. If a viewer decides to skip through the ads or use an ad-blocker, then you won’t get paid for the view. Because of that, high views doesn’t necessarily translate to a well-earning video. A video with 10,000 views might only have 3,000 thousand impressions, which roughly translates to only $22.50.
In order to maximize your profit on a video with ads, you’ll need to know which ads works best with which content. If it’s a short 3 minute video, a pop-up ad might be better than a 30 second clip. Using the YouTube Partner program, you should have access to an analytics page on YouTube to determine what works best for your audience.
Despite being the easiest to set up, earning money directly from YouTube is often not enough on its own, which why plenty of YouTubers are finding other ways to earn.
2- Banking on Beyond YouTube
As it stands now, earning solely on YouTube is getting a lot harder and for that reason, it’s not uncommon to see YouTuber going beyond YouTube to make their earnings. At the moment, the three big ways are: sponsorship and product placements, selling of own merchandise, and crowdfunding.
Big name YouTubers such as Angry Joe and Jenna Marbles rely on a combination of all three to make what they earn. These are often the bulk of how YouTubers make their annual earnings.
Product placements / Sponsorship
If you have amassed a sizable amount of followers, odds are there will be companies who are interested in sponsoring you in exchange for you mentioning their products or services. These sponsorship are often on a commission or per-sale basis where you’ll get paid based on how many viewers clicks on your sponsored links. It’s important to note however, that if you do a sponsored video, you’ll have to notify it on your YouTube account.
Selling your own merchandise
If you have established your brand and have enough loyal followers, you could start selling your own merchandise by linking it on your videos. Setting up your own website is a quick and simple process and the type of merchandise/services you may offer can vary, as long as it relates to your audience. Smosh, for example, emphasizes a lot on merchandising and probably makes a sizable amount of money from their online store.
3- The Power of Crowdfunding
A recent trend among content creators is the usage of crowdfunding and the two biggest crowdfunding platforms at the moment are Kickstarter and Patreon. The difference between the two is that the former is on a project-based funding while the other is a recurring type. Crowdfunding is an excellent way to set tiers to reward your followers in exchange for a substantial funding. A few examples of tier rewards are exclusive contents to paid members, personal one-on-one chats, and specialized merchandise.
With the changes that YouTube has made with its monetization policy, a lot of content creators and YouTubers have turn to its audiences to fund their work. Crowdfunding can be an incredible source of income if utilized properly, but you need to know which platform suits your audiences.
If the type of content you’re looking to create are one-offs (i.e. a feature film or a music album), Kickstarter is often the best place to start.
In Kickstarter, you set up a project page with the amount of money you need to complete your project. People then pledge to it and if you manage to reach your goals within the deadline, you’ll receive the funds. Kickstarter projects are more bigger in nature with some projects reaching millions of dollars in funding.
While Kickstarter caters to the big project fundings, Patreon is catered more towards smaller scale but ongoing content creations.
You’re more likely to find YouTubers call Patreon home as it can provide a more stable source of income compared to Kickstarter. Similar to Kickstarter, you set up a page with a funding goal on Patreon, the difference is that the goal is a monthly basis funding instead of a one-off. YouTubers and content creators such as Jim Sterling and Red Letter Media are great examples of successful Patreon pages with earnings of over $12,000 and $19,000 respectively, every month.
Becoming A YouTuber
Is This For You?
By now, you should have an idea of how much a successful YouTuber makes and how they go about making it. A majority of the big YouTubers started out doing content on topics and areas that they are passionate about and have the passion to continue making that content.
Knowing what you’re passionate about and being an expert in that field will help you get started, but ultimately, it will depend on much time and effort are you willing to put in growing your channel.
It’s easy to assume that as a YouTubers, all you have to do is be entertaining on camera. But the fact of the matter is, being a YouTuber means working beyond the camera to plan and research your content, finding ways to monetize it efficiently, and making sure you have enough money at the end of the day.
Using YouTube as a Stepping Stone
For every PewDiePie success story, there are hundreds other YouTubers who are still trying to make it in YouTube and are barely surviving. Which is why content creators have decided to not rely solely on YouTube as their platform of distribution.
Twitch is a prime example of a platform that allows you to stream your content to audiences while receiving tips and donations from viewers. Using YouTube to transition into a different career is also a popular trend with plenty of YouTubers making into movies, television, and broadcasting.
Being a YouTuber is About Passion
Making big money out of being a YouTuber might sound tantalizing, and it is, but ultimately, what compels most YouTubers to continue making content is not the money. It’s the joy of making content for others.
Being YouTuber means you’re not always looking to make a video with a million views and getting that big subscription numbers. Being a YouTuber is about channeling your passion and creative and making it into a content that people enjoy.
So what you’re waiting for? Start making those videos!
About Azreen Azmi
Azreen Azmi is a writer with a penchant for writing about content marketing and technology. From YouTube to Twitch, he tries to keep in touch with latest in content creation and finding out the best way to market your brand.