And most do it just to do it—to scratch the itch of creating things and being in front of an audience.
Making money from a YouTube channel probably isn’t the reason you’ll start one, but the opportunities to earn are a pleasant surprise once you realize how many of them there are.
New Media Rockstars estimates that top YouTubers earn in the millions, some even in the tens of millions. Revenue can fluctuate greatly depending on the premise of the channel.
Here are just some of their estimates and the number of subscribers these YouTubers have:
- EpicMealTime makes around $3.1 Million (7 million subscribers)
- Ray William Johnson sits at $4.2 Million (10 million subscribers)
- FunToyzCollector weighs in at a whopping $30.4 million (8 million subscribers)
However, YouTube channels on the smaller side can still be monetized. Your earning potential isn't determined solely by the number of subscribers and views you have, but also by the level of engagement you generate, the niche you cater to, and the revenue channels you explore. That's not to say subscriber count doesn't matter—check out our tips to get more subscribers on YouTube.
But before we get into how you can make money on YouTube, you’ll need to have a clear understanding of what your audience looks like first.
Understanding Your Audience Demographics
Building your own audience puts you in a great position to monetize in a variety of ways. But you’ll only be able to take full advantage of the opportunities you have if you understand the makeup of your audience.
For many YouTubers looking to monetize, the more niche your channel is, the better a position you’ll be in to work with brands looking to target specific audiences (more on that later).
Take a look at your audience's demographic information by clicking here.
You'll want to pay especially close attention to:
- Gender for the distribution of male and female, and if your audience skews one way.
- Age for the ranges that most of your audience members fall into.
- Geographic location for the countries or cities where your viewers are watching your videos and some brands might want to focus on.
- Watch Time: The overall engagement of your audience wihen watching your videos.
- A combinations of the above to paint a more accurate picture of your audience by looking at things like the number of male viewers you have in a specific age range.
With this demographic information at hand, you'll have a better understanding of your own audience and also be able to work better with brands. You can also use Social Blade to compare your own channel against others. For more on interpreting your YouTube analytics, be sure to check out this post.
Now, with that out of the way, we can start talking about the different ways you can actually make money.
How to Make Money on Youtube
Just like being an Instagram influencer or a blogger, your audience might unlock your earning potential, but it's the creation of multiple revenue streams that helps you actually make money.
Luckily, there are several ways you can money on Youtube:
- Become a YouTube Partner and make money from ads.
- Make money on YouTube by selling products or merchandise.
- Crowdfund your next creative project.
- Let your audience support your work through "fan funding".
- License your content to the media.
- Work with brands as an influencer or affiliate.
Let's take a deeper look at each one.
1. Become a YouTube Partner and Make Money From Ads
The first revenue stream you’ll likely explore is ads.
You'll need to set yourself up as a YouTube Partner, which is easily done in the Creator Studio section of your YouTube account by going to the Channel menu to verify your account and enable Monetization (click here to go there directly).
After you become a Partner, you'll need to have an AdSense account to opt into Google's advertising network to actually get paid and see ad revenue reports like the one below. If you don't have one, you can apply for one here.
Once that's done, you'll notice a green "$" next to your videos in the Video Manager, indicating whether it's been enabled for monetization, which you can click on to access the monetization settings for each video.
It's easy to set up, but advertising as a YouTube partner is far from being the most lucrative revenue stream you can create for yourself.
Why You Should Look Beyond Ads for Revenue
YouTube recently received a lot of backlash due to its decision to be more transparent about advertising on the platform and what qualifies as “advertiser-friendly” content. Essentially, many creators feared they would lose out on the ad revenue that helps support their channel due to the nature of their content.
According to YouTube, your content could get excluded from ads if it includes:
- Violence, including display of serious injury and events related to violent extremism
- Inappropriate language, including harassment, profanity and vulgar language
- Promotion of drugs and regulated substances, including selling, use and abuse of such items
- Controversial or sensitive subjects and events, including subjects related to war, political conflicts, natural disasters and tragedies, even if graphic imagery is not shown.
But the reality is that YouTube has been demonetizing content that it doesn't deem “advertiser-friendly” since 2012 via an automated process.
YouTubers were already losing out on ad revenue because their videos would at times be demonetized without warning and without their knowledge.
Now the situation is actually better, as creators are notified when this happens and can contest any videos that were mistakenly excluded from YouTube's advertising network.
Advertising might be a common means of generating passive income for creators, but the trade-off is that YouTube gets to keep around 45% share of ad revenue.
In short, YouTubers should explore other revenue streams to sustain their creative hobby.
So let’s do that.
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