From the outside, becoming a YouTuber seems like a pretty lucrative career move. Making lifestyle vlogs and beauty tutorials look easier and more fulfilling than a 9 – 5, and apparently pays pretty well, too.
How do YouTubers fund their lavish lifestyles? Many professional vloggers live in mansions and wear designer clothes. Clearly there is a way to make a lot of money through the platform.
Naturally, making successful videos is the first step to building a YouTube career. But what is the average payoff for a successful YouTube video? It doesn’t seem like views correlate directly with income.
Making money through YouTube is doable, but not necessarily easy. Let’s break down how much do YouTubers earn and how they do it.
The YouTube Rules
Before YouTube even considers cutting you a paycheck, your channel must meet a few criteria:
- Your channel must have at least 1,000 subscribers
- In the past year, you must have earned at least 4,000 hours of watch time
- You must have an Adsense account
- You must be over 18, or have your AdSense controlled by a guardian or other legal adult
- Your content must not violate YouTube’s content guidelines
Once you meet these criteria, your channel is eligible to enter the YouTube Partnership Program (YPP). This is the program through which you will receive all your money. You cannot earn money from YouTube or utilize any of their additional features unless you are a Partner.
It is important to note that YouTube will not send any money until you have earned over $100, so there may be a significant delay between starting your channel and receiving your first paycheck.
What Is Watch Time?
Both posted videos and live streams count towards your hours of watch time. Watch time does not mean the number of videos posted, but how many people watched them over and over. Don’t worry; you don’t have to create 4,000 hours of content in a year!
However, if you delete or disable any videos, their watch time will be subtracted from your total. This encourages content creators to keep their older content up, as it will still garner watch time.
Making Money As A YouTuber
There are a multitude of ways to earn money as a YouTuber. Ads and affiliate links are the most well-known methods, but many more opportunities present themselves as your channel gains traction.
Once a YouTuber has a consistent audience base, they can earn most of their money through sponsorships, donations, and paid platforms (like Patreon or paid channel subscriptions). Often, a successful YouTuber does not release content only on YouTube. Their career is supplemented by Twitch streaming, Patreon, or Instagram content.
The hardest part of becoming a well-paid YouTuber is building a consistent, enthusiastic audience. Ads and affiliate links are only lucrative if there are a lot of people clicking on them! This is why small channels don’t make as much money: not enough people are watching them yet.
However, once a YouTuber is consistently delivering good content to a large subscriber base, they can turn it into an empire.
Ads are the quickest and easiest way to earn money through YouTube. This does not mean that you will earn money quickly unless your channel earns many subscribers and views in a short amount of time. However, earning money through advertising is a great passive income.
In order to get paid for having an ad on your video, the viewer must either watch the entire ad or click on the link provided. Though Google does not disclose the exact amount that channels are paid for their ads, they earn around $18 for every 1,000 views. This means that every view earns the creator less than 25 cents.
To make sure that viewers watch the entire ad, YouTube allows content creators to place up to three “ad breaks” in the middle of their videos. This method earns creators more money than only including a skippable ad at the beginning of their videos.
Google has disclosed that they payout 68% of what they were given for ad space. If a company pays $100 to advertise on YouTube, $68 of that goes to the content creators.
CPM vs. CPC (And How To Utilize Them)
CPM stands for “cost per mille”. Mille is the Latin term for a thousand, so it tracks that CPM means the cost for every thousand views. Companies that buy ads in CPM do so because they don’t have to pay large amounts to advertise on less popular videos. It also means that you’ll only be paid if your video is watched thousands of times.
CPC stands for “cost per click”. It is exactly what it sounds like: companies pay the content creator every time a viewer clicks on an ad. Though CPC costs companies more at a time, ads generate fewer clicks than views on average.
Both methods can be similarly effective when paired with the right content. If you have a hobbyist channel, for instance, pairing with a company that produces hobby supplies on a CPC basis would be effective. If you don’t garner a huge amount of views but believe you can sell a product or service, choose CPC ads.
Conversely, if you think your video can earn huge amounts of views, CPM may serve you better. Using CPM YouTube is the best choice if you are familiar with SEO (search engine optimization) or have built a large audience.
Other YouTube Features
Aside from AdSense and the Partners Program, YouTube offers a few other ways that creators can earn money through the site.
Premium Channel memberships are offered to channels with 30,000 subscribers or more. Subscribers can pay a monthly fee to access content unavailable to the GenPop, similar to Twitch’s subscription model. The channel receives the majority of this money.
The merchandise shelf is available to channels with over 10,000 subscribers. It allows them to show off the branded content they offer, or any other merchandise related to the channel.
Super chat is available in certain countries but is a feature your subscribers can pay for in order to stand out during live chats. Subscribers pay to use channel-specific emojis and have their comments automatically sorted to the top of the chat. This may be a good revenue stream if you use the live video feature a lot.
Affiliate links are common with YouTubers whose content is focused around a product. Toy unboxers, beauty gurus, and hobbyists often fill their description boxes with affiliate links.
Affiliate links are not given out by YouTube or Google. The content creators partners with an outside company, usually related to their niche, to create a unique link to the company’s website. This link shows that the customer found it through the YouTuber’s channel.
If the customer purchases something from the website using that link, the content creator will receive 5-10% of the purchase. Affiliate links are lucrative, which makes it difficult to get for small channels. Some businesses hand out affiliate links like candy, while others like to maintain exclusivity.
Affiliate links also encourage the content creator to talk about a brand or company in their videos. This gives the brand nearly free advertising, as they only have to pay the creator if someone buys their product. Generally, more people watch a video than purchase something from the description box.
Sponsorships are similar to affiliate links, except the content creator is paid upfront. They’re also great for YouTubers who create niche content and are able to pair with brands that sell to those niches. Sponsorships are often paired with affiliate links but are more exclusive than the link alone.
When a content creator is sponsored by a company, they are paid to talk about the brand in one or multiple videos. Often the company will require that the YouTuber disclose their sponsorship within the first thirty seconds of the video to guarantee the brand name is heard. The content creator is discouraged from speaking negatively about the company and instead paid to sell their product.
Too many sponsorships, however, can put an audience off of a YouTuber. Many viewers tend to be critical of a channel “selling out”, and resent being advertised to in such an overt way. Audiences will also notice if a sponsorship is “off-brand” for the channel, like if a fitness YouTuber suddenly started featuring McDonald’s at the start of every video.
Carefully chosen sponsorships, however, are effective to audiences. Viewers react better to YouTubers who only choose to accept sponsorships from brands they truly support.
Donations And Paid Platforms
YouTube live videos have a feature where subscribers can donate money to YouTubers. This usually isn’t a creator’s main source of income but is a nice “tip” on top of other revenue. If the creator streams on Twitch as well, they likely earn donations through that platform as well.
Even if a creator uses YouTube as their primary platform, they may decide to move some of their content onto other sites. Platforms like Patreon and OnlyFans require that fans pay a monthly fee to see content, and most of the money goes toward the creator.
Many creators gravitate toward these paid platforms for higher-effort or NSFW content. They’re often a great outlet for creators who don’t want to violate YouTube’s (somewhat Draconian) content guidelines. Many creators also decide to release their YouTube videos a week early on Patreon as an incentive.
OnlyFans is also becoming more popular among YouTubers and content creators. Though most content on OnlyFans is 18+ and involves nudity, YouTubers like Tana Mongeau have created accounts. It also utilizes a tiered subscription model and can be a very lucrative income source.
The Top YouTubers By Subscribers
Interestingly, the YouTubers with the most subscribers are not necessarily the highest-paid. Here are the YouTubers with the most subscribers:
- T-Series (140 million)
- PewDiePie (104 million)
- Cocomelon Nursery Rhymes (83.5 million)
- SET India (73.2 million)
- 5-Minute Crafts (66.8 million)
The most subscribed-to channels all have one thing in common: they’re niche channels. T-Series is an Indian music and movie producer, Cocomelon only produces animated nursery rhyme compilations, and 5-Minute Crafts is exactly what it sounds like. Having a dedicated niche helps channels earn a high number of subscribers.
So, How Much Do YouTubers Earn?
By contrast, the highest-paid YouTubers have made a career largely from their own personas (or their child’s). These are the highest-paid YouTubers as of 2019:
- Ryan Kaji ($26 million)
- Dude Perfect ($20 million)
- Anastasia Radzinskaya ($18 million)
- Rhett and Link ($17.5 million)
- Jeffree Star ($17 million)
The fact that the highest-paid YouTuber is an eight-year-old with business-savvy parents demonstrates that the real money isn’t made through ads but through marketing and sponsorships. Anastasia Radzinskaya is another child YouTuber with manager parents, vlogging her life and gaining multiple brand deals in the process.
Even PewDiePie, despite being the second most-subscribed-to YouTuber, made half of what Ryan Kaji did in 2019. Being business-minded is a great boon in the YouTube industry. Great content can only get you so far.
At its core, being a YouTube content creator is more like running your own business than being an employee. Your success is completely derived from your content and your own marketing decisions.
Anyone Can Become A Well-Paid YouTuber
Of course, for every Ryan Kaji, there are a thousand other content creators who barely made their first $100 check. But understanding how YouTube works and all the different ways creators can earn money through the platform is critical. A YouTube career is inherently unconventional, but so is the earning process.
It takes more than a few enthusiastic subscribers; in fact, many YouTubers claim they didn’t really “succeed” until they had over a million subscribers. Creating great content is a given, but making real money through YouTube requires some business knowledge. But now you know how to succeed as a YouTuber, and are no longer asking yourself “how much do YouTubers earn?”
If you want to keep reading about the newest online business trends or unconventional ways to make money from home in 2020, feel free to flip through other blog posts on our site. Prepare yourself for a new and uncertain future by learning about how to conduct business online.