June 21, 2024
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How Do You Make Money on YouTube? The Creator’s Guide to Monetization

how do you make money on youtube

So you want to quit your day job and become a rich, famous YouTuber? Hey, crazier dreams have come true. After all, who would’ve thought goofy homemade videos could transform into a multi-billion dollar industry?

Yet here we are. An elite few like MrBeast and PewDiePie now easily earn 7-figures yearly vlogging about anything from gaming exploits to exotic travel adventures.

But wait – how exactly does one go from filming videos in their basement to raking in cold, hard YouTube cash from brands? What sorcery is this?

Well, turns out behind every YouTube fortune lies some simple, yet powerful monetization juju. Things like ad revenue, channel memberships, merch sales, and more.

Intrigued yet? Whether you’re just curious or serious about ditching your desk job for internet fame, I’ll break it all down in this guide. We’ll explore all the ways regular creators are earning incomes that rival A-list celebrities on YouTube.

The business of YouTube is real. Let’s dig in and uncover the secrets of this multi-billion dollar new media machine!

Overview: How YouTubers Actually Make Money

Overview How YouTubers Actually Make Money

Many people are surprised to learn just how much top YouTubers rake in. According to Forbes, the highest-paid YouTuber of 2022 was MrBeast, who earned $54 million largely from his outrageous stunt videos, brand sponsorships, and merchandise sales.

But even smaller channels can generate a healthy five-figure income through the right monetization methods:

  • Ad revenue: Earn money when viewers watch ads before or during your videos
  • Channel memberships: Fans pay a monthly fee for exclusive perks like bonus content
  • Super Chat & Super Stickers: Viewers pay to highlight their messages during live streams
  • YouTube Premium revenue: Get a share of subscription fees from Premium viewers watching your content
  • Affiliate marketing: Earn commissions promoting relevant products
  • Selling merchandise: Design branded merch for fans to purchase
  • Sponsorships: Get paid by brands to feature or review their products
  • Crowdfunding: Use sites like Patreon for fan-funding
  • Licensing content: Sell your popular videos to media companies or advertisers

But before you can access all of these money-making features, you’ll need to meet YouTube’s eligibility requirements for monetization.

Understanding YouTube’s Monetization Requirements

To unlock access to YouTube’s money-making tools, you’ll need to have an active channel in good standing. You’ll also need to meet the threshold to join the YouTube Partner Program (YPP).

This program gives YouTubers access to:

  • Ad revenue shares
  • YouTube Premium revenue shares
  • Super Chat & Super Stickers
  • Channel memberships
  • Merchandising
  • And more…

YouTube Partner Program Eligibility

To qualify for the YouTube Partner Program, you’ll need:

  • 1,000 subscribers
  • 4,000 valid public watch hours in the last 12 months
  • A linked AdSense account
  • Compliance with all YouTube monetization policies

The watch time requirement works out to around 240,000 minutes of viewing time on your channel over the previous year.

Once your channel hits these milestones and gets accepted into YPP, you can begin enabling your preferred monetization features.

Now let’s explore the main methods for making money on YouTube once you gain access to monetization.

Primary YouTube Monetization Strategies

Primary YouTube Monetization Strategies

1. YouTube Ad Revenue

One of the most popular ways YouTubers earn an income is through YouTube ads.

There are a few different types of YouTube ads you can enable once your channel gets approved for monetization:

  • Display ads: Appear beside or below videos
  • Overlay ads: Semi-transparent ads that play over videos
  • Skippable video ads: Short 5-15 second ads viewers can skip after 5 seconds
  • Non-skippable video ads: 15-30 second ads viewers must watch
  • Bumper ads: Unskippable 6 second ads

YouTube shares 55% of the ad revenue generated from views on your channel. Where ads appear and how often depends on your viewer demographics and watch time metrics.

YouTube’s algorithms optimize ad placement to maximize your earnings. The actual amount you make per view varies based on viewer geography, audience type, ad type, seasonality, and more. On average, top creators earn $3 to $5 per 1000 monetized views.

Here are some best practices to optimize your channel for better YouTube ad revenue:

  • Increase watch time: YouTube shares higher ad revenue with channels that keep viewers watching longer. Create binge-worthy content over 10 minutes long.
  • Improve click-through rates: YouTube rewards higher performing ads with better payouts. Make eye-catching thumbnails and intriguing titles.
  • Broaden your audience: Get more views from different demographics and geographies, especially North America and Europe.
  • Stay “advertiser-friendly”: Follow YouTube’s strict ad policies around copyright, offensive content, clickbait, and sensitive events. Brand safety is key.
  • Go live more: Live streams attract more Super Chats and premium ads with higher CPMs.
  • Make evergreen content: Upload actively and promote older popular videos to get residual ad views.

2. YouTube Channel Memberships

Channel memberships allow loyal fans to pay a monthly fee between $1-$100 for exclusive membership perks. Members might get:

  • Custom badges
  • Bonus videos
  • Behind-the-scenes footage
  • Members-only live streams
  • Shoutouts
  • Discounts on merch
  • And more…

The more exclusive value you offer, the more fans will be willing to pay. Popular YouTubers like Marques Brownlee offer up to 4 tiers of channel memberships, with higher tiers getting better perks.

You keep 70% of all channel membership revenue after app store fees.

3. YouTube Super Chat & Super Stickers

Super Chat and Super Stickers allow fans to pay to highlight their messages during live streams. Super Chats pin colorful comments to the top of the chatbox, while Super Stickers place animated stickers over the video stream.

Viewers can pay anywhere from $1 to $500+ to stand out during busy live streams. As the creator, you get to keep 70% of Super Chat and Super Sticker purchases, minus transaction fees.

Make sure to actively encourage Super Chats and read out messages you get. This makes fans more likely to pay again.

Now let’s look at some alternative ways to make money on YouTube beyond built-in monetization features.

Alternative YouTube Revenue Streams

1. YouTube Merchandising

YouTube lets creators design and sell branded merchandise right from their channel.

To set up a merch shelf, go to the “Merchandise” tab in YouTube Studio. Here you can:

  • Add t-shirt designs, mugs, phone cases and more
  • Choose products colors and variants
  • Set pricing and profit margins
  • Track sales and revenue

YouTube handles printing, processing, and shipping orders on demand. They take a revenue share between 15-30% on all YouTube merch sales.

Tips for making money selling YouTube merch:

  • Design merch fans will love wearing like hoodies and hats
  • Time specialty merch drops around video launches or channel milestones
  • Promote new merch in videos and channel banners

2. YouTube Affiliate Marketing

Affiliate marketing allows you to earn commissions by promoting relevant products to your audience.

To become a YouTube affiliate:

  • Sign up for affiliate programs that align with your niche. ShareASale and Amazon Associates are good starter programs.
  • Review products you actually use and recommend affiliates with authenticity.
  • Link to featured products in video descriptions with your unique affiliate codes.
  • Track clicks & conversions to optimize your affiliate strategy over time.

The more affiliates you partner with, the more ways you can monetize product mentions within your content.

3. Paid Brand Sponsorships & Integrations

Sponsored brand integrations represent big business in the influencer space. Brands will pay YouTube stars thousands to feature or review products in videos.

Rates vary greatly depending on viewership and production effort:

  • Quick shoutouts start around $100 per 100k viewers
  • Dedicated brand videos around $10 per 1000 viewers
  • Multi-video brand deals from $5k+

Make sure to clearly label sponsored content and comply with FTC disclosure guidelines. Be selective about the brands you work with to avoid jeopardizing audience trust.

Now let’s explore some newer media monetization opportunities for YouTube creators.

Leveraging New Media Opportunities

The internet media landscape is constantly evolving. Savvy YouTubers stay on top of emerging monetization opportunities and diversify their income streams.

1. YouTube Premium Revenue Sharing

YouTube Premium is YouTube’s ad-free subscription service. It offers an enhanced experience for viewers willing to pay a monthly fee.

As a creator, you get a cut of the Premium subscription revenue from fans that watch your content. YouTube pays creators $3-$5 per subscriber on average.

YouTube Premium payouts appear separately from your regular estimated revenue reports. Track this metric to optimize production based on what Premium viewers engage with most.

2. Licensing YouTube Videos

Once your channel hits over 10k subscribers, you can apply to license your original videos through YouTube’s licensing platform.

This allows media companies and advertisers to pay for rights to re-use, edit, translate or redistribute your popular YouTube videos off the platform.

Licensing increases exposure while diversifying your revenue mix beyond just ads. You set your own pricing and terms. YouTube takes a 15% cut of all transactions made through their portal.

3. Fan Funding Sites

Beyond built-in Super Chats in live streams, creators are increasingly leveraging external platforms like Patreon for fan funding.

Fans agree to pledge monthly donations in exchange for exclusive content and community access. Top YouTuber Philip DeFranco earns over $50k per month from his Patreon community alone.

Crowdfunding income helps offset YouTube’s fluctuating ad payments. Set exclusive tiers and rewards fans will value. Market it subtly within videos.

While third-party monetization can be lucrative, never forget the importance of building engaged viewership on YouTube itself.

Building and Engaging Your YouTube Audience

No matter what monetization methods you leverage, having an engaged audience is critical for earning sustainable YouTube revenue long-term.

Focus on regularly uploading quality content optimized for watch time. Interact with viewers in comments and live streams. Promote subscriber calls-to-action.

Cross-promote videos through playlists and YouTube cards to keep viewers watching more content. Funnel viewers towards your merch shelf, memberships page, or funding platforms once they become loyal fans.

The Importance of Social Media & Cross-Promotion

It’s equally vital to market your YouTube channel across social media platforms:

  • Share video links on Facebook & run lead generation ads
  • Post previews natively on TikTok to access its viral potential
  • Upload BTS and teasers on Instagram Reels & Stories
  • Leverage Twitter threads for engaging commentary

Use a multi-channel network approach, leveraging the unique strengths of each platform. Embed links back to drive traffic to your YouTube channel across all external promotions.

Optimizing Performance with YouTube Analytics

YouTube Studio provides a rich analytics backend to track your channel’s earnings and engagement.

Review metrics like:

  • Estimated revenue: Total earnings from all monetization sources
  • RPM: Revenue per 1000 video views from ads or Premium
  • Top videos: Best performing for watch time and revenue
  • Traffic sources: Where viewers discover your content
  • Audience geography: Best countries/cities by engagement
  • Real-time stats: Live view counts and chat messages

Compare how new videos perform against older evergreen content. Identify viewer drop-off rates. Tweak your content strategy based on these insights to maximize YouTube earnings.

Staying Current with YouTube’s Evolving Platform

YouTube frequently changes its policies, algorithms, and platform features. As a creator, you need to stay nimble.

Keep up with the latest updates:

  • Creator Insider channel: YouTube’s official creator news source
  • YouTube blog: Official notices on new products, policies, and updates
  • Creator conferences: Attend VidCon, Playlist Live or YouTube events
  • Industry publications: Follow sites like TubeFilter for insider intel
  • Creator forums: Stay on top of new experiments, issues and beta features

Continuously educate yourself. Adapt your monetization methods based on platform shifts. This agility will serve you well on YouTube’s ever-changing landscape.

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Wrapping Up: How to Succeed with YouTube Monetization

As you can see, making a full-time living off of YouTube involves wearing many hats. You need to create compelling content, build an engaged audience across platforms, leverage myriad monetization features, promote merchandise, secure brand sponsorships, and adapt to constant change.

But by diversifying your income streams, optimizing your channel performance, and providing value to your viewers, you can absolutely generate a healthy, sustainable living as a professional YouTuber.

Now get out there, start creating, and may your YouTube fortunes grow!