Most people are aware that popular YouTube channels make money, but it’s not immediately obvious how. And there’s a reason for that: the answer isn’t straightforward.
There are several different ways for a YouTube channel to make money. There’s advertising, sure, but most channels have at least one other revenue source, and which ones used can vary.
Hank Green outlined this all a few years back.Here’s a look at these revenue sources, along with how much money they can potentially bring in.
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Advertising: The Primary Source of Revenue
YouTube is unique among social networks in that it shares advertising revenue with its users. If your tweets or Facebook posts regularly go viral, you get nothing from those sites, but if you build a consistent audience on YouTube, you can expect a cut of the ad revenue your videos generate.
It’s the first way most YouTuber channels make money, but how much does it add up to? Well, YouTube offers creators 55 percent of all advertising revenue. The actual dollar amount can vary wildly depending on the subject of the video, the demographics of the viewers, and the current demand for advertising. YouTube CGP Grey outlined things nicely in this video:
To summarize, every time you watch a YouTube video, Google holds an auction for the ad, matching things like your watch history and demographic information up with the content of the video, then finding out which advertiser is willing to pay the most to reach you at that precise moment.
Ad rates vary wildly depending on these factors, but 1,000 views generates, on average, about $2.50. About $1.38 of that goes to the YouTuber, at least according to Grey: YouTube doesn’t release official numbers on any of this.
This advertising revenue is probably the most reliable revenue stream for consistent YouTubers, but is really only enough to earn a living if you consistently get millions of views. Smaller YouTubers need to supplement this to make a livable wage.
Sponsorships and Brand Deals
If a channel has a big enough audience, companies will sometimes work with them directly, asking the creator to promote products and brands in the video itself. Sometimes this takes the form…
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