If you don’t have efficient monetisation skills you will fail drastically in the content creation game. You need a strong strategy that does not depend primarily on advertisers period.
The Reality Check: Most YouTubers Don’t Make Six Figures a Year, and Here’s Why
The allure of YouTube stardom has captivated the dreams of many aspiring content creators. The promise of fame, fortune, and six-figure incomes has made the platform seem like a goldmine. However, the truth is far from the glamorous image painted by a few successful YouTubers. In this eye-opening blog post, we’re going to delve into the reality that most YouTubers don’t make six figures a year. We’ll explore the reasons why YouTube income is nearly non-existent for the majority and highlight the importance of efficient monetization skills outside of YouTube for sustainable success.
The Illusion of YouTube Income:
While there are a select few YouTubers who have indeed achieved financial success, they represent a minuscule fraction of the platform’s vast creator community. The reality is that the majority of YouTubers struggle to generate significant income solely from their YouTube channels. The ad revenue generated from YouTube ads is often not enough to sustain a comfortable living, let alone reach six-figure earnings. Many creators find themselves caught in a cycle of high production costs, diminishing ad rates, and an oversaturated market that makes it increasingly challenging to stand out and monetize their content effectively.
The Importance of Diversification:
To truly thrive as a content creator, it’s crucial to recognize that YouTube alone is not a guaranteed path to financial success. Building a sustainable income requires diversification beyond the platform. Savvy YouTubers understand the need to develop additional revenue streams, such as brand partnerships, sponsorships, merchandise sales, online courses, consulting services, and even launching their own products. By expanding their reach and exploring avenues beyond YouTube, creators can tap into a wider audience and create multiple income streams that can collectively contribute to their financial goals.
The Value of Monetization Skills:
Having efficient monetization skills outside of YouTube is a vital component of long-term success for content creators. It’s not enough to simply create engaging videos; understanding the business side of content creation is equally essential. YouTubers need to develop marketing expertise, negotiate deals, and master the art of building a personal brand. This includes honing skills in social media management, SEO optimization, email marketing, and content strategy. By becoming well-versed in these areas, creators can leverage their influence and monetize their content more effectively, ultimately increasing their chances of achieving significant earnings.
The Myth of Overnight Success:
One of the most common misconceptions surrounding YouTube is the belief in overnight success. The truth is that building a successful channel takes time, dedication, and persistence. Most of the YouTubers who do manage to earn substantial incomes have invested years into their craft, consistently producing quality content, and adapting to the ever-changing landscape of online media. It’s important for aspiring creators to set realistic expectations and understand that achieving financial success on YouTube is not a guaranteed outcome but rather a result of hard work, resilience, and a bit of luck.
While the dream of becoming a six-figure earning YouTuber is undoubtedly enticing, it’s essential to face the reality that most content creators don’t achieve such financial success. YouTube income alone is often inadequate to sustain a comfortable living for the majority of YouTubers. Instead, diversification and efficient monetization skills outside of YouTube are crucial for long-term sustainability and growth. By expanding revenue streams and honing business acumen, content creators can increase their chances of reaching their financial goals while pursuing their passion for content creation. Remember, success on YouTube is not an overnight journey but a gradual process that requires determination, adaptability, and a willingness to explore beyond the confines of the platform.
“How much money do YouTubers make?”
We get this question a lot. The answer always surprises people: not much.
Contrary to what the internet trolls in YouTube’s comment section will tell you, making YouTube videos is not as lucrative as you might think. Our fans from Simple Pickup think we own expensive cars, luxurious yachts, and private jets. The truth is far from it.
The thing is, though, it’s hard to fault them for thinking so brazenly. If you do a quick Google search, there are reams of articles advertising false information – such as the fact that YouTubers have a RPM as high as $8 (for the advertising no0bs out there, this means we earn $8 per 1000 video views). That’s just plain wrong.
Although there are rare exceptions, the vast majority of YouTube creators are receiving RPMs between $1.50 to $3.00. But that isn’t even the entire story – that number just counts monetizable views. Not all your views on YouTube are monetizable. For example: if someone views a video with an ad blocker enabled, that’s a non-monetizable view – and thus wouldn’t count towards your earnings. (An ad blocker is just one example – there are many other different ways a view can be non-monetizable.)
Let me share a story with you about monetization. One of our awesome channels, SimplePickup, accumulated around 14 million views in the last 30 days. You would think that a channel with as many views as an episode of Walking Dead would make at least $100,000 right? (Fun fact – that’s how much Andrew Lincoln gets paid PER EPISODE.)
Wrong. $100,000 is nowhere near the actual number. Simple Pickup’s channel had 14 million views, true…but only about 4.5 million of those views were actually monetizable. Those 4.5 million generated $15,495 for us from YouTube ads. And then, after YouTube takes its cut (45% of total revenue), the channel is left with… $8,522. That’s an effective monetizable-view RPM of $1.89, and, if you count all views, a paltry RPM of $0.85.
Here’s where you might be thinking: $8,522 is a great amount to be making…you’re pocketing almost $100,000 per year! And no doubt, this is a great salary. But to earn it, you’d have to consistently get over 10 million views every month – and do it all yourself, without splitting any of the revenue between your other founders, producers, the people who help edit and film (and don’t forget equipment costs!) Not only is getting 10+ million views a month difficult, most popular YouTubers have a small team working with them – the money goes to multiple places.
And if you’re a smaller YouTuber, with only 100,000 subscribers and a million views per month? You’re looking at $1,000 a month – enough for monthly rent in Los Angeles, but nothing for food, health care, a car, a dog…
Ad revenue is not sustainable. That’s why the bulk of content creators, from the get go, look toward other avenues to make money. Here are some of the most common ways:
Brand Integrations
Year over year, more and more dollars flow into digital advertising. Companies of all sizes are looking to digital content creators to help them advertise their products and bring awareness to their brand. The level of investment varies. It could be something as simple as, “check out XYZ company because they’re really awesome!” to an entire 5 minute video, with strategic product placement across the entire segment. These deals range anywhere from $10,000 to $100,000 depending on the brand, the channel size, and the type of video integration.
The problem with brand integrations is that companies with that much money to throw around will rarely look at a channel unless they’re getting millions of views per video. Think about it: why would Coca-Cola bother with 10 channels that each have 500k views, when they can deal with one channel that gets 5 million views? It saves them the logistical and creative effort of dealing with 10 different personalities, which translates to time and money saved. The top dogs are the only ones who matter. Because of this dynamic, the vast majority of brands will only work with the top 1% of channels (those who are consistently reaching millions of views per month). 1% might not sound like much, but YouTube currently has over 1 million channels monetizing from the partner program, so 1% means that big brands have over 10,000 channels to choose from. This leaves the other 99% of channels to fight for the smaller brands who are willing to do the lower $500 to $5,000 deals.
Movie, TV, and Book Deals
This is the sexiest source of income for digital media content creators. People have become enamored with the success stories of YouTubers moving onto bigger, brighter roles in traditional media: The Fine Brothers with their show on Nickelodeon, Grace Helbig hosting a talk show on E!, John Greene writing a New York Times best-seller and turning it into a movie…the list goes on. But don’t be fooled. Accomplishing this is extraordinarily difficult. To take an example from our backyard, Simple Pickup has been pitching TV shows for the last 3 years and we’ve had meetings with almost every single cable network in existence (e.g. MTV, USA, VH1, etc). Even with over 2 million subscribers, we haven’t even gotten close to shooting a pilot. Like brand integrations, traditional media deals are usually only an option for the top 1% of channels. And even then, only a fraction of that 1% actually get deals that go through.
Merchandise
This is an often overlooked source of revenue generation. If done right, merch has huge potential. Currently, it makes up ~7% of Simple Pickup’s monthly income – and that’s just releasing one t-shirt per month. Other possibilities include sweaters, hats, mugs, sex toys…you name it, and there’s a distributor who can help create it for you (maybe not sex toys, but I wouldn’t be surprised if it existed). With platforms like District Lines and Teespring automating the entire process, you can create a t-shirt and start selling it faster than toilet paper at Burning Man.
So why don’t all YouTube creators sell merch? A lot of them do. They just don’t do it well. The first reason why is because of crappy design. Many creators just slap on their name or logo – but if you do that, you’re appealing only to your hardcore fans, and leaving out the vast majority of your audience, who are more casual visitors to your channel. The second reason is that, while YouTubers are great content creators, they aren’t great marketers. The typical “call-to-action” for a merchandise campaign is usually just a throwaway line: “Hey, go buy my shirt!” There’s no hype. There’s no intrigue. There’s nothing that makes a casual fan think that he has to get it right now.
It’s not enough to think of your merchandising arm as an ancillary piece of the puzzle. If you want to do it well, it has to become a core competency. You have to learn how to sell your stuff. Creating great designs, and creating great marketing campaigns, is as much an art as creating the content itself.
Other Physical Products
Aside from t-shirts and sweaters, YouTube creators have been getting more and more creative with what they’re selling. Prankster VitalyZDTV made an iphone case emblazoned with the phrase, “put your number in my phone.” He’s one of the most underrated marketing savants in the YouTube community, and the iPhone case was a home run as soon as he made a video where he actually used the case to get a girl’s number.
Other examples of physical products span the entire gamut, from atoy that makes farting noises (Jack Vale) to a hugely lucrative makeup line (Michelle Phan). If you have lots of subscribers, creating unique physical products can be extremely lucrative. However, there are some pretty significant barriers to entry: you need a great idea, a team to help you negotiate it, and a sizable user base with rabid fans that will help you recoup the high fixed costs. All of this usually means that the average content creator can’t even get into the game.
Self-Distributed Digital Products
The last, but not least, is actually the creme de la creme of monetization strategies. There are myriad types of digital products: audio podcasts, feature length films, complete educational courses – what all of them have in common is that they are labeled as “premium” content that fans can pay for, if they want to receive something above and beyond the free content released on YouTube.
The history of content creators selling these products is fractured and start-stop-start at best. Louis CK was one of the first big stars to foray into this unknown territory, selling his comedy special for $5 on his own website and cutting out the middle men (production company, networks, etc) entirely. Grace Helbig launched her feature length movie, Camp Takota, and leveraged her massive YouTube audience. Though the actual revenue numbers were never released, many sources have said that the movie was an instant hit, making over $1 million in the first 24 hours. Simple Pickup sells a subscription service on dating tips and confidence building, and that subscription alone makes up over 80% of its total revenue.
A few reasons why digital products take the cake:
Creators are already good at making content, so they’re just leveraging what they already know.
There are very low fixed costs, and almost no variable costs. You’re just using the equipment you already have, and distribution is almost free (minus the platform rake, depending on the service).
Egalitarian access. Unlike brand deals and brand integrations, digital products are not limited to the top 1% – anyone can sell them, and revenue just slides up and down with audience size.
Stronger connection. When fans buy a digital product, they’re seeing the creator in it – a shirt at the end of the day is still just a shirt.
End-to-end control. You have complete creative freedom and flexibility to sell exactly what you want to sell, on your own schedule.
This begs the question: why aren’t all YouTubers taking advantage?
Here’s the biggest reason: they don’t know the potential digital goods has. Seriously. It’s not ignorance, but is a knowledge gap that has yet to be filled. Our friends in the YouTube space – the ones with huge followings, three to five times the size of our current channels – sometimes ask us about our revenue numbers. When we tell them that we’re making upwards of five to ten times more than them, their reaction is predictably the same:
“WTF?”
“Are you serious?”
“How is that possible?!”
The crest of adoption and acceptability has not reached the shores of YouTube – the majority don’t believe, at this point, that you could possibly quintuple your money, and start a thriving business, by simply selling premium content on top of free content. No matter how big or small your channel is, if you do it right, you can always expect to make at least 5x what you’re making on YouTube’s ad revenue split (and easily a lot more).
Then there’s one more problem: the right platform doesn’t exist. While there are existing solutions that allow creators to sell premium content, none of them are designed specifically for and with YouTube creators in mind. The features are cool, and the design is material, but nothing currently gets to the needs of the YouTube community.
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Source Vishal Bhriguvanshi
If you don’t have efficient monetisation skills you will fail drastically in the content creation game. You need a strong strategy that does not depend primarily on advertisers period
