The best thing about making money on YouTube is, the sky’s the limit. You can even make as much as, or possibly more than, Ryan Kaji- a channel creator who earned $26 million from YouTube in 2019. And if you’re working with a group, perhaps you could follow the footsteps of the Dude Perfect channel, which generated $20 million on YouTube in 2019.
The trick here, for starters, is to find a suitable income stream on YouTube before putting in the work. And when it comes to that, the other great thing about this increasingly popular social platform is, there are multiple ways of making money on YouTube.
Now, to give you a critical headstart, this article explores the best (and proven) methods of earning money on Youtube.
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Top Ways of Making Money on YouTube in 2020
YouTube Partner Program
As the default income stream, the YouTube Partner Program happens to be the most popular method of earning money on YouTube. Once you join it, you get the chance to earn revenue from:
- YouTube Ads: Get paid every single time a viewer watches an overlay video or display ad.
- YouTube Premium: Get paid whenever a YouTube Premium subscriber watches your content.
- Super Chat and Super Stickers: YouTube allows you to charge your viewers to display their highlighted messages in live stream chats.
- Merchandise Shelf: You get to showcase and sell your branded merchandise directly from YouTube’s watch pages.
- Channel Memberships: YouTube gives you the privileges of charging your subscribers recurring membership fees.
It’s worth noting, however, that the YouTube Partner Program is not open to everyone. You can only be eligible if you:
- Have a valid Google Adsense account.
- Are at least 18 years old.
- Achieved at least 4,000 public watch hours within the preceding 12 months.
- Sign and agree to the program’s terms and conditions.
If you choose to try your luck with YouTube Ads, there are two principal approaches you could use to generate revenue- Cost Per Click (CPC), or Cost Per Mille (CPM).
CPC, for starters, earns you money on YouTube when your audience clicks on ads placed around your video watch pages. The whole system is powered by Google Adsense, which typically pays its partners 68% of the total CPC revenue.
Therefore, if your YouTube video pages manage to drive clicks worth $1,000, Google Adsense will pay you $680. And while Google charges its marketing clients varying rates, the average cost per click is usually between $1 and $2.
CPM, on the other hand, pays much less per impression, but cumulatively offers higher earnings than CPC. In this system, the YouTube ads are essentially embedded in your videos, and the subsequent earnings are worked out from the number of views.
But, YouTube doesn’t stop there. The payment figures are further evaluated based on – among other factors – video length, video quality, ad click volume, viewership region, etc.
All in all, though, Forbes places the average earnings at $5 – $18 for every 1,000 video views. So, in short, a million video hits on YouTube translates to about $5,000 in CPM ad earnings.
If you consistently publish high-quality content on YouTube, you’ll have an easy time building a solid following. Then, if you happen to surpass 30,0000 subscribers, the YouTube Partner Program will award you the channel membership option.
The ceiling for gaming channels, however, lies way lower. Such creators get the qualification privileges with only 10,000 subscribers.
Now, whichever group you belong to, you should find a Membership option on your YouTube admin panel. This is where you go when you need to restructure your channel’s membership framework. YouTube even allows you to set a corresponding membership fee of $0.99-$100 per month.
It’s worth noting, however, that you won’t ultimately keep all the spoils. As fees for making money on YouTube, the platform will automatically retain 30% of the earnings, leaving you with a 70% cut.
As your brand continues to establish itself on YouTube, you could take your revenue strategy up a notch with YouTube’s merchandising.
This system is as simple as it sounds. YouTube has partnered with renowned merchandising sites – like Teespring and Represent – to give you the benefit of creating and selling branded items from your “Merchandise Shelf”.
We’re talking about stuff like bracelets, books, cups, stickers, posters, bags, and t-shirts.
At the moment, however, the YouTube Merchandise Shelf is only open to YouTube Partner Program members based in the US and Europe. What’s more, you need to have a minimum of 10,000 subscribers.
If you choose to proceed, at least you get the freedom to set your product prices. But, in the end, you should expect the merchandising partners to retain a fixed rate for each item you sell.
When it comes to t-shirts, for instance, Teespring typically deducts a base rate of $10.22 from each sale. But then if you happen to sell 200-499 shirts, the rate slightly drops to $9.82- giving you the chance to make a higher profit markup.
So far, quite a number of YouTube channels have made a pretty penny from merchandise sales. PewDiePie, for example, has earned more than $6.8 million, while the likes of Dude Perfect have made profits exceeding $2.9 million.
Overall, Teespring reported an average success rate of 82% during its beta testing phase, which sampled even small YouTube channels. So, in a nutshell, you could say your chances here are fairly good.
External Revenue Streams on YouTube
Turns out that in addition to YouTube’s default partner programs, you could also make money from external streams. YouTube creators usually leverage their content for third-party deals involving:
- Influencer marketing.
- Affiliate marketing.
- Product placement.
Unlike what we’ve seen with the YouTube Partner Program, the external revenue streams are not governed by any rules. What you earn and how you earn it varies from one service contract to another.
Can You Make Money on YouTube?
Evidently, there are numerous reliable methods for making money on YouTube. And when you consider even the accompanying external streams, the possibilities here are endless.
But, while you try to capitalize on the opportunities, always keep in mind that it all begins with great content. High-quality videos will give you a solid foundation for generating income on YouTube.