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YouTube has over 1.3 billion users who watch 5 billion videos a day. That adds up to 3.25 billion hours of video watch-time a month. Plenty of video creators have already recognized the money-making potential with the platform and are cashing in on their videos.
YouTube generates anywhere from 16 to 25 billion dollars in annual revenue, largely from advertisements. With collective earnings that rival many Fortune 500 companies, many YouTubers have successfully walked the path to millionaire stardom. While there’s no guarantee you’ll end up a millionaire, putting your business on YouTube has plenty of benefits. Take a look at some of the most popular YouTube channels, followed by a guide on how you can start making money on YouTube.
YouTube affiliate marketing
Contrary to YouTube ads, affiliate marketing doesn’t require you to join the YouTube Partner Program or have a minimum threshold of subscribers or views (but obviously, you’ll need to have a community of viewers to make money). Affiliate marketing is when a brand pays you a commission on the sales generated from the traffic from your channel. This is usually tracked with a unique affiliate code or affiliate link. There are two ways to make money this way: 1) The brand pays you by the number of people who click your affiliate link or click-through rate (CTR) or 2) the brand gives you a direct percentage of the earnings from the products sold. The nice thing about affiliate marketing on YouTube is that it applies to practically every niche because so many companies have a program… including WeVideo!
A YouTube sponsorship is arguably the most difficult way to make money on YouTube, but also one of the most lucrative. You should have a sizeable following and influence in your niche before a company considers sponsoring you. The beauty of being sponsored on YouTube is that there’s no set structure like there is for YouTube ads. On the contrary, YouTubers and brands will create an agreement and decide the terms of reimbursement based on your niche and number of followers. Sites like Famebit are designed to help YouTubers match with appropriate brands looking to sponsor. The agreement might be an established payment in exchange for: a designated video promoting the brand, including a brand’s logo on your channel or exclusively using a brand’s product or service.
Tyler Blevins, better known by his gamer tag, “Ninja”, supposedly makes an estimated $500,000 a month through sponsorships with Red Bull and Microsoft. Ninja gained his popularity by streaming himself playing the popular battle royal video game, Fortnite, on YouTube and Twitch. The exact terms of agreement with his sponsors are unknown, but Blevins wears Red Bull apparel during his streams and uses a Microsoft PC for gaming, making the sponsorship very apparent.
It’s important to note that YouTube sponsorships can be somewhat risky for both parties involved. For the YouTuber, partnering with a big brand can put you at risk of losing authenticity or being viewed as a sell-out in the eyes of your followers. This can result in losing subscribers and views. Sponsorship can be risky for brands as well. For example, Disney had to pull their sponsorship of popular YouTube star, PewDiePie, for portraying offensive imagery in his YouTube videos. Brands can make the mistake of treating a YouTube influencer as a paid actor reciting set promotional lines rather than speaking on their own behalf. Therefore, it’s important to make sure both parties are aligned from the start.
YouTube fan funding
Another way to make money on YouTube is directly from your subscribers’ donations. YouTubers who are enrolled in YouTube’s Partner Program can quickly sign up for YouTube Super Chat (otherwise you’ll have to enroll). This allows viewers to pay a small one-time donation to have their comment pinned and highlighted at the top of the comments feed for up to five hours, depending on the amount paid. Super Chat is great for the live YouTube streamer who has an active channel community. Here’s how to sign up for YouTube’s Super Chat:
Another form of YouTube fan funding is a site called Patreon. Patreon allows you to set up a gated channel for paid members only. The monthly fee is decided when setting up your account and can be a great way to offer exclusive content to loyal subscribers.
YouTube channel merchandise
This last method is more about leveraging the YouTube channel to promote your business than making money passively. After your channel is sizeable enough to make money through some of the options listed above, it’s a great time to earn more income by promoting your own business or selling your own line of apparel. It’s worth noting that many of the top-grossing YouTube channels don’t make their money using just one method; they diversify and use a mix of methods to capitalize on their gains. Logan Paul, for instance, has YouTube ads on his videos, promotes affiliate companies and sponsorships, and also has his own line of merchandise called “Maverick”.
Like any investor, it’s wise to diversify your earning avenues. Just like making money on YouTube, getting started with video doesn’t have to be difficult. As video production and consumption continues to the growth of YouTube, there’s no better time than the present to get started creating awesome video content. Start with WeVideo today!
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