How A YouTuber Makes Money
Who would’ve thought, a mere decade after its launch, that people would be using YouTube as a means to make money. And make money they do: some of the world’s most popular YouTubers are currently earning more than big-wig CEOs (by opening up and playing with toys, nonetheless). But before you question your life choices, you should know that being a successful YouTuber is a lot harder than you think.
If you’re wondering how exactly someone can make money on a YouTuber salary, don’t worry, you’re not alone. Here’s an explainer on five different revenue streams for the average YouTuber.
#1 Ad revenue
You’re probably across this one: basically, when there’s an advertisement before a video, the creator of that video will receive a share in the revenue from the ad with YouTube. The amount that YouTubers make from these ads varies dramatically, starting from as low as $0.60 per 1000 views to as high as $7 per 1000 views, and it can depend on a number of factors.
For one, ads don’t play on all videos, but older videos can keep accumulating views (and ad revenue) over time. It can also depend on the amount of viewers who have ad blocking software installed or simply skip all ads after the five second window is up. Other factors including the genre of video, the type and price of ads, the percentage of views on mobile and desktop can affect a YouTuber’s ad revenue, as well as the actual click rate – mainly, how many people are actually clicking on the ad.
#2 Sponsorship, endorsements or product placement
Traditionally offered to bigger, more successful channels, advertisers can often pay YouTubers to create content about or including their product – similar to how Instagrammers might make money through sponsored posts. Fun fact: YouTubers are actually required by law to state whether the video has been sponsored – at some point in the video, it’s required you say something along the lines of “This video is brought to you by X…”
YouTubers with a growing following will often sell merchandise featuring logos, inside jokes or characters featured in their videos. Felix Kjellberg, also known by his username Pewdiepie, was the first YouTuber to reach 10 billion views on his game commentary channel. Since starting in 2010, the Swedish gamer currently makes millions of dollars thanks to his widely popular gaming videos, a career stream he supplements by selling themed merchandise online.
#4 External and related products
Author and YouTuber John Green speaks about this to Quora: “Many YouTubers are able to use their existing audiences as activation energy for other projects – from tours to music to makeup lines to books. Because many of these projects have better established business models (like, people generally expect to pay for books), this can also be a great business.”
Basically, a YouTuber who already has a growing audience of their own can often influence said audience into buying their own products. For John Green, who already has a significant fan base through his YouTube channel VlogBrothers which he runs alongside his brother Hank Green, he was able to garner an audience for his other creative pursuit. As he puts it: “It’s unlikely my novel The Fault In Our Stars would’ve been so successful without the activation energy provided by the viewers of our videos.”
YouTubers can make direct revenue from their fans through Kickstarter-type sites like Patreon. Patreon is a fan-funding site that allows for ongoing voluntary funding to allow viewers to support the creators they like, directly. This communal movement does have its flaws however – while this avenue does decrease the influence of advertisers on YouTube content, it can make creators directly answerable to their audiences, so if audiences don’t like the content that’s being produced, this might influence their desire to donate.
Also, the definition of someone who “needs” funding from the community is also questionable. Is someone with 50,000 subscribers worth supporting financially? What about someone with 300,000 subscribers? And what happens when audiences assume YouTubers are too successful to need financial assistance, but creators are too proud to tell them otherwise?
How much are we talking?
The actual amount that the average YouTuber makes varies substantially from person to person. Though no YouTubers are completely open about how much they make, there are some rumblings online about some of the highest paying stars: Pewdiepie apparently rakes in around US3-4 million every year; Brandon Campbell, a popular workout coach, has said he makes around US$1300 per month from over 600,000 views; and performer Olka Kay has reportedly earned around US$100,000 to $130,000 in the past three years.
Corporate sponsors rule everything – but not for very much longer
While the majority of YouTubers make the most of their money from advertisements, John Green believes this might soon change. “I think advertising is probably shrinking percentage-wise as a revenue source,” he says, adding that he thinks it’s “mostly good news”. He goes on to say: “I think advertising is an important part of funding our online experiences, but ultimately I’d argue the Internet is healthiest when serving the needs of its human users rather than the needs of its corporate sponsors.”
Rebecca Russo is a freelance writer, editor, community radio dabbler, occasional hiker and celebrity autobiography enthusiast. She has written for online publications including Junkee, AWOL, Fashion Journal and Tone Deaf. Find her online here.