At an age where his peers are barely weaned off the bottle, Ryan Kaji is worth over $100m. 8-year old Ryan makes YouTube videos – where he unboxes toys – for a living and raked in $26m in 2019 alone. With over 26 million active subscribers on YouTube, this is one kid you can’t toy with.
He isn’t the only one. According to the Forbes annual lists, top earners from the video platform trailing the youngster include:
- Ryan Kaji – $26 million
- Dude Perfect – $20 million
- Anastasia Radzinskaya – $18 million
- Rhett and Link – $17.5 million
- Jeffree Star – $17 million
- Preston – $14 million
- PewDiePie tied with Markiplier – $13 million
- DanTDM – $12 million
- VanossGaming – $11.5 million
So how did they pile up so much cash? Can anyone replicate their successes?
How YouTube Works
Created in 2005 by three former PayPal employees, YouTube is an online-video-sharing platform. It hosts millions of videos uploaded by users on various subjects, ranging from the pointless to the entertaining to serious, educational stuff.
Widely popular, youtube boasts of a jaw-dropping 2billion users, spread across the planet, every month.
Most of the videos on the platform are free to view. However, there are some contents that users can only access through paid-subscription channels.
There’s also YouTube music, YouTubeTV, and YouTube premium – paid subscription services that offer you ad-free music streaming and video. Youtube also provides film rental services.
Purchased by Google in 2006, YouTube now has millions of users who view a staggering 1 billion hours of content daily. It’s the second most visited site in the world – right after Google. With the number of eyeballs on the site, it’s naturally a goldmine for advertisers. And this is how the company makes money.
YouTube is estimated to have made $15 billion in advertising revenues in 2019.
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How YouTubers Make Money
YouTube is nothing without the users who create the content – The YouTubers. And they are rewarded handsomely. Here are ways that YouTubers earn from their passion for video:
Sponsorships
Companies pay YouTubers with a sizable following to bring attention to their brands. The traditional media like radio and television is becoming less popular with the younger generation in favor of the internet. So companies often turn to YouTube influencers to create engaging video content that promotes their products and services.
Youtubers charge companies anywhere from $10 to $50 per 1000 views to promote their brand. However, you can only attract such sponsorship deals if you have a reasonably large following and user engagement.
As a newbie YouTuber, you may have to look for other ways of monetizing your YouTube screen time.
Advertising
Except you’re subscribed to YouTube Premium, annoying ads pop up all the time while you are on your favorite video. This is the primary revenue model on YouTube.
YouTube channels make money as you view the ad-infused videos. These ads are embedded in the videos through the YouTube AdSense Partnership program.
Youtube takes 45% of all ad revenues, leaving 55% with the channel producer. This could sum up to a tidy amount, especially if a large company places such ads in a high-traffic country like the US or UK.
You can earn between $3 and $10 for every 1,000 views your videos get. So if you can get 10,000 eyes on your video in a day, you could end up with $300. Not bad for a day’s work.
Affiliating
YouTubers create some excellent content in their niche featuring a product or service. Then hook up an affiliate link that sends interested viewers to buy on the product’s owner’s site.
The seller pays out a predetermined commission to the YouTuber for each sale made through them.
Affiliate programs help you seamlessly interface with the product owners and get your due commission for each successful sale initiated from your videos.
How much you make as an affiliate depends on the products you are promoting, the seller, and the viewer engagement. Typically, affiliate programs pay anywhere from 10% to 50% of revenue from each sale.
Merchandise
Selling merchandise – branded mugs, t-shirts, sneakers, etc. is another popular way to make money off youtube. But this is the sole preserve of superstar YouTubers. Those that have achieved near-celebrity status.
It would be tough to make money this way as a beginner. It would be best if you built a colossal following of adoring fans who can’t wait to lay their hands on your merch. This could take time.
Fan Donations
Some YouTubers have a highly engaged audience who connect to them on a deeper level. These fans keep the video creators going by donating money – often through a third-party service like Patreon.
Some YouTubers have been known to get as much as $40,000 monthly from fan support.
Paid Membership
In exchange for exclusive content, followers of some youtube channels pay a recurring membership subscription. Such content could include special videos, live chats, badges, and emojis.
You must have up to 30,000 subscribers to your channel to adopt this monetization model.
Factors That Affect How Much YouTubers Make
The more subscribers YouTubers have, the more cash they make, right? Well, not quite. It doesn’t always pan out that way.
Contrary to popular beliefs, what really matters when talking about how much YouTubers can earn is the number of views.
The essence of amassing many subscribers is to have a solid base of people who readily consume, share, and engage with your content once you publish.
Also, it is worthy to note that not all views are equal. The value of a view and it’s earning potential for a channel depend on many factors. These are the viewers’ age, gender, country, device type, and genre of video.
The earning prospects of a view also depend on whether the viewer uses a youTube premium or has an AdBlocker.
You’ll be wondering how a viewer’s age and demographics affect how much a YouTuber earns? Here’s how. Advertisers bid for ad space on YouTube videos. And they base their bids on these demographic-related criteria. For example, if an advertiser wants to reach people in the age band of 18 to 25 years, they will calculate how much they are willing to pay to get 1000 such viewers.
Based on this estimate, they’ll bid accordingly, with the highest bidder winning. That is how the viewer’s demographics impact youtube earnings.
How Much Do YouTubers Make?
From all these, one thing is clear. How much a YouTuber makes varies a lot. There are many factors at play here – their audience, video genre, niche, viewer demographics, etc. It’s not easy to give an absolute answer to the question.
But at least you now have an idea of the various monetization models on youTube and how video content creators get paid. You have also learned the factors that influence the earning potentials of a video view.
As you can see, it’s possible to make money from YouTube. But it is not easy money. There is a lot that goes into making videos and building an audience. It may take up to a year or more to start getting significant traction from YouTube. Most people quit after several months without seeing any income. That doesn’t make sense.
You shouldn’t expect to start making money right off of the bat. And just like any business, it pays to figure out what you enjoy doing and stick with it.
Creating video content in a niche you love will help you stay with it long enough to start making money.
Concentrate on being helpful with your content rather than on making money with it. When you pour your passion into your videos, people will begin to pay attention. You’ll start accumulating a highly engaged audience, and the money will indeed follow.
YouTubers can make anywhere between $1 to $50 per 1000 views. And some popular content creators’ annual income runs into millions.
How much you can make on youtube is subject to many factors, some of which are not so obvious to YouTubers. But the singular most important factor is the number of views your video gets. It’s a game of numbers. However, these views are not of equal value. Some of the factors that affect a view’s value include the viewers’ age, gender, country, device type, and type of video.
However, there are other monetization models on youtube: these include sponsorships, affiliate marketing, merchandise sales, and fan funding, among others.
Conclusion
Do you want to become a YouTuber? Maybe as a side hustle to supplement your income or simply to explore your creativity? It would help if you built an audience of engaged viewers who’ll lap up your content. It is not a get rich quick scheme. It helps to make great videos and post regularly. With some consistency, you’ll start seeing results in no distant time.
