In 2010, Daniel Middleton (DanTDM) created a YouTube channel and presumably wasn’t earning much money as a teenager. In 2017, he was the highest paid YouTube star earning $16.5 million. Many other YouTubers including Felix Kjellberg (PewDiePie) and Lilly Singh have made millions. Suffice it to say that uploading videos to YouTube can be an excellent way to earn a living.
Thousands of people earn money on YouTube because it’s a high traffic platform. It’s the second most visited website and search engine globally after Google. YouTube and Google are owned by the same company. As a top online destination, YouTube boasts several impressive statistics:
- YouTube has over a billion users—almost one-third of all people on the Internet—and each day those users watch a billion hours of video, generating billions of views.
- YouTube (and even YouTube on mobile alone) reaches more 18-34 and 18-49 year-olds than any cable network in the US.
- YouTube has launched local versions in more than 88 countries.
- You can navigate YouTube in a total of 76 different languages (covering 95% of the Internet population).
- If YouTube were a standalone company, it would be worth $160 billion.
- The number of channels earning more than $100,000 was up over 40% year over year.
How a person makes money on YouTube depends if he or she is a YouTuber or a casual user of the platform. YouTubers are frequent users of YouTube, especially individuals who produce and appear in videos on the site. Also, they dedicate most of their working hours to creating and promoting their content. A casual user, like me, uploads videos periodically. For example, I upload videos once or twice monthly to grow my online brand and drive traffic to my website. YouTube is not my primary focus or source of income.
YouTubers and non-YouTubers will take different approaches to monetizing their channels. Revenue can be made directly on YouTube, for example, ad revenue, and offsite, for instance, an ebook. In discussing how people earn money, I’ll use “YouTubers” as a catchall term for both frequent and infrequent users.
To monetize your content, you must own all the necessary rights to commercially use all visuals and audio elements, whether they belong to you or someone else. YouTube provides guidelines for content you created and didn’t create.
How YouTubers Make Money
- YouTube Partner Program
- Google Preferred Program
- Super Chats
- Sponsorship and Channel Membership
- Merchandise and Teespring
- Paid Product Placements and Endorsements
- Product and Merchandise Sales
- Digital Media Sales
- Affiliate Marketing
- Membership and Content Subscription Fees
- Programming Partnerships
- Live Events
YouTube Partner Program (Ad Revenue)
The most common way YouTubers make money is through ad revenue. Ad revenue is managed through YouTube’s Partner Program and paid through AdSense. The YouTube Partner Program (YPP) lets creators monetize their content on YouTube. Users can earn money from advertisements served on their videos and from YouTube Red subscribers watching their content. A channel must reach 4,000 watch hours in the previous 12 months and 1,000 subscribers to join YPP. Users can leave YPP anytime by disabling the monetization feature in their dashboards.
How to join YPP:
- Sign in to YouTube.
- In the top right, select your account icon > Creator Studio.
- In the left menu, select Channel > Status and features.
- Under “Monetization,” click Enable.
- Follow the on-screen steps to accept the YouTube Partner Program terms.
Once a channel joins YPP, it must be linked to an approved AdSense account. AdSense facilitates payments to content creators like YouTubers and bloggers once a month. YouTube pays 55 percent of ad revenue to creators. Revenue details are in your YPP terms.
Google Preferred Program (Ad Revenue)
Google Preferred is a premium advertising program that aggregates the top 2 to 5 percent of YouTube content targeting users between 18 and 34. Unlike YPP, creators cannot apply to the Google Preferred Program (GPP). It’s an invitation-only program. The revenue share for GPP is a secret since creators can sometimes negotiate better splits. High viewership channels such as IGN, The Verge, SciShow, and itsJudysLife participate in GPP.
Super Chat allows viewers to purchase chat messages in live streams. Creators receive 70 percent of chat revenues. Revenue details are in the Commerce Product addendum. To be eligible for Super Chat, you must meet these requirements:
- Channel is enabled for live streaming
- Channel is monetized
- Channel has over 1,000 subscribers
- You are over 18
- You are in one of the available locations
Super chat revenue is paid through AdSense and reporting is available in the Creator Studio on the Transaction Revenue Report tab.
Sponsorship and Channel Membership
YouTube is rolling out a sponsorship feature to some channels. Sponsorships allow viewers to sponsor YouTubers through monthly recurring payments for sponsor-only benefits like badges, emoji, and perks. Eligibility requirements include:
- Channel has more than 100,000 subscribers
- Channel is in the YouTube Partner Program
- You are over 18 years old
- You are in one of the available locations
- You (and your MCN, if applicable) have agreed to and are complying with Youtube’s terms and policies (including the applicable Commerce Product Addendum) and have zero live strikes
Merchandise and Teespring
YouTubers have been earning money from merchandise sales for years, but creators had to direct traffic offsite for sales. Now, creators can sell to fans directly. In a space directly below a video, creators with more than 10,000 subscribers can offer merchandise like tee-shirts, hats, phone cases, or any one of over 20 different items that make sense for their channels. Also, eligible creators can link their Teespring stores to their YouTube channels to promote their official merchandise
Paid Product Placements and Endorsements
Just like product placements in movies and endorsements by professional athletes, YouTubers can earn money in these ways as well. According to YouTube,
You may include paid product placements, endorsements, or other content that requires disclosure to viewers (“Paid Promotion”) in your video content. If you do, we require you to notify YouTube by checking the “video contains paid promotion” box in your advanced settings.
Paid product placements are pieces of content that are created for a third party in exchange for compensation or where that third party’s brand, message, or product is integrated directly into the creator’s material.
Endorsements are pieces of content created for an advertiser or marketer that contain a message that consumers are likely to believe reflects the opinions, beliefs, or experiences of the content creator or endorser.
In most cases, high traffic YouTubers are approached by companies to place and endorse products. However, some creators initiate and pursue deals.
Product and Merchandise Sales (Offsite)
Many YouTubers leverage their channels to sell branded products and merchandise including apparel, accessories, and gifts. Setting up an online store is quick and painless with platforms like Shopify and WooCommerce. Print-on-demand marketplaces are an option too, for example, Merch by Amazon and Zazzle. However, online markets list tens of thousands of products and are very competitive, so they’re probably not the best places to send your viewers. If a viewer likes you and your brand, it’s better to keep them in your ecosystem to generate sales.
Digital Media Sales
Many YouTubers sell online courses and books. Online courses are a natural extension given that they comprise of videos. I’ve come across several travel vloggers who have developed courses with travel tips and insights. You can sell classes on e-learning marketplaces like CreativeLive, Skillshare, and Udemy or independently by using course creation software like Teachable and Thinkific. Sunny Lenarduzzi, for example, teaches Build a Fan Base on YouTube.
Publishing a book takes a lot more effort, and I recommend doing so if you have thousands of channel and email subscribers. DanTDM wrote a book called Trayaurus and the Enchanted Crystal, and Amy Landino published a book entitled Vlog Like a Boss.
Affiliate marketing is a performance-based marketing activity. An affiliate or publisher promotes a product or service online and is compensated for achieving a specific objective or action. A merchant or advertiser specifies the action, which is usually a valid sale. For example, a merchant will pay an affiliate a 30 percent sales commission. Some merchants create pay per lead programs where they pay affiliates for getting prospects. For instance, an advertiser pays one dollar for each person who establishes an account. Affiliates place unique URLs on their websites and online. For example, Jane signs up for Amazon Associates, Amazon’s affiliate platform, to promote products on Amazon. Jane will earn up to 10 percent for sales generated from her links.
YouTubers who dabble in affiliate marketing add affiliate links to their description and about sections. In their videos, they casually mention to “see” or “click” on links in their descriptions. Check out these posts for recurring and high paying affiliate programs. Most affiliates on YouTube don’t disclose their affiliates links, but they should as per FTC guidelines.
Like affiliate marketing, MagicLinks works with content creators by providing social commerce tools. They offer a free tool that helps you easily create product links to share with your fans across your social media presence.
Membership and Content Subscription Fees (Offsite)
A fantastic way to generate passive income is through membership subscriptions. Patreon is a popular membership platform that makes it easy for artists and creators to get paid. Fans pay creators subscription amounts of their choice in exchange for exclusive experiences and behind-the-scenes content. Over $350 million has been paid to creators, and an average patron pays more monthly than consumers pay for Netflix, Spotify, or Amazon Prime. Patreon has grown in recent months as many YouTubers experience demonetization and non-transparent tests conducted by YouTube. While Facebook and WordPress membership plugins are available, Patreon pays 90 percent of revenues to creators and does the heavy lifting. David Packman is successfully using Patreon to generate more than $6,000 a month.
YouTubers with large and loyal followings, those usually in the Google Preferred Program, are ripe for original programming deals with YouTube Red, Netflix, CNN, and media platforms. In 2016, YouTube star Casey Neistat inked a partnership with CNN worth $25 million. Brazilian vlogger and comedian Felipe Neto released a Netflix original comedy special, “My Life Makes No Sense,” in 2017.
A lesser-known revenue stream for YouTubers is that of live events such as tours, speaking engagements, and comedy gigs. For instance, DanTDM toured Australia.
Frequently Asked Questions
How much can you make on YouTube?
There are no limits to how much a YouTuber can make, which differs from most nine-to-five jobs. However, some video categories perform better than others. For example, comedy/skits, gaming, fashion, music, and tech are popular categories.
Millions of people flock to YouTube to be entertained. Regardless of the content, engaging videos and high production value can yield significant revenues. For instance, geography isn’t an exciting topic for most people. Knowing this, Paul Barbato infuses his geography-themed videos with flair, excitement, and comedy. His channel has surpassed 100 million views and is closing in on 1 million subscribers.
How much does YouTube pay you for 1 million views?
If a creator isn’t enrolled in YouTube monetization activities like YPP, the creator will earn nothing from his or her views. If the creator enables monetization with ads, 1 million views can generate between two to five thousand dollars for the creator. The AdSense revenue that a creator earns will vary depending on many factors including the types of ads running, kind of content, and average video length.
How many subscribers do you need to get paid?
Channel subscribers don’t factor into AdSense revenue, only YPP eligibility. However, channels that feature many subscribers have a social proof advantage. Social proof is a psychological phenomenon in which people rely on the feedback and actions of others to determine what is right and wrong in each situation. If someone sees many channel subscribers, it will give the person more incentive to subscribe.
How does YouTube pay?
Through AdSense, and depending on your payment address, the following payment options may be available:
- Electronic Funds Transfer (EFT),
- EFT via Single Euro Payments Area (SEPA),
- Wire Transfer, and
- Western Union Quick Cash
How do you earn money from YouTube without AdSense?
YouTubers can earn money without AdSense. They can make money from product sales, affiliate marketing, paid product placements and endorsements, membership fees, and live events. Also, many creators use YouTube to crowdfund.
Do you earn money through YouTube Red?
All your videos that appear on ad-supported YouTube will also be available without ads on YouTube Red. YouTube Red provides a secondary revenue stream for creators in addition to what they already earn through AdSense.