How Much Money Can You Make on YouTube?

How Much Money Can You Make on YouTube?
Contributor: Mike Winters

It’s weird to be envious of an eight-year old boy, but hard not to be when said child makes $US26 ($35) million annually from what started as a toy unboxing channel on YouTube. Maybe you’re thinking, “I can do that.” And while there’s sky-high potential for how much money creators can make on the world’s second most-visited site, most of them earn far more earthbound annual incomes. Here’s a look at how much you can make as a YouTuber.

Subscribers are important, but they’re not everything

Only a small percentage of YouTubers have a large number of subscribers: Out of 37 million accounts, just 22,000 have more than one million subscribers, according to Tubics, a marketing software company. The vast majority of successful creators belong to a “middle class” of accounts with 50k–500K subscribers, many of whom can’t live off of their YouTube earnings alone.

Subscribers are valuable because they’re more likely to consistently engage with your content and share it with others, but they aren’t the best metric for determining how much money they’re making. To get a more accurate sense of what creators are paid, you have to look at their “cost per mille,” otherwise known as cost per 1,000 impressions, or CPM.

Your CPM determines your pay rate

When you monetise your videos through Google’s Partner Program, you enable ad revenue sharing which is based on your CPM. Cost per 1,000 impressions is a metric that represents how much money advertisers are willing to spend for ads on your YouTube videos. But as Business Insider points out, no YouTube creator consistently has the same CPM, as advertisers pay different rates based on a variety of factors like geography, seasonality, and topic (typically, your CPM rate is higher for informative, business-focused content over personal vlogs, as an example).

CPM rates are a bit mysterious to YouTubers, and they can range wildly, but usually fall somewhere between $3 – $7 per thousand clicks. That means a CPM of $7 will earn you $7,000 from a video with a million views. Considering that the average YouTube video received only a few thousand views, and you’ll understand why it can be a challenge to make a steady income off of the site, even if you’re popular.

To really make money, you have to go beyond clicks

If you want to make millions of dollars on YouTube, the reality is that you need more than a lot of subscribers. The top YouTube accounts use their content as a springboard for other ways of generating revenue, which include:

Merchandise sales

YouTubers can make more money off of merch than they do from ads. If a creator has an engaged, loyal audience, their profits from selling mugs, T-shirts, coffee beans, totes, stationary, or online education videos will can be significant. According to Tubefilter:

An average month for [Jake] Paul is 200 million views, which puts his estimated monthly AdSense earnings between $US50,000 ($68,015) and $US800,000 ($1,088,240). His estimated [annual] merch income, on the other hand, is between $US820,810 ($1,116,548) and $US4,292,940 ($5,839,686)

Sponsored content

Content creators can get paid directly by sponsors for mentioning a specific company or product in their videos, typically a flat fee of a few hundred up to thousands of dollars. It’s not easy to get hard numbers on this, but the more popular you are, the more leverage you have. Influencers with at least 100,000 followers on YouTube can typically earn around $17,000 for a sponsored video, according to Forbes.

Free merchandise

Many YouTubers are sent a lot of free swag in the hopes they’ll review the products on their channels. It’s not easy to put a hard number on this as it’s not strictly income, but you can imagine how much a creator can save on expenses if they’re, say, running a makeup product review channel and all the products being reviewed are paid for by someone else.

Patreon

Patreon allows creators to make money from their most loyal subscribers in exchange for exclusive content and perks. You can easily make as much from Patreon as you do from ad revenue, but you’ll need to build up a large following before you see much upside. This blog post has a good breakdown of how a Patreon account can be used to increase your revenue above and beyond what you can make from YouTube ads.

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