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HOW TO MAKE MONEY ON YOUTUBE.

A guide to monetizing your followers.



It’s easier than you think to make a living doing what many would consider a dream job.


So how exactly do YouTubers make money and how does the YouTube business model work? You may think that the majority of a YouTuber’s income comes primarily from ad revenue but this isn't the whole story and depending on the niche it may not even cover the cost of production. So how else can you supplement income to break even and start making a profit? In a recent tweet the king of YouTube MrBeast showed that his most recent upload made $167,000+ despite costing over $3,000,000 to produce.

While this may appear to be a huge loss he will still ultimately turn a profit, but how? For starters the content posted on his main channel is in part funded by the revenue generated by his 4 alternate channels.


The content he posts on these channels has much lower costs to produce but they wouldn’t be able to generate profit without the exposure they gain from the content posted on his main channel.


By investing more into high budget content he is able to gain more exposure which he then leverages to develop 4 separate revenue generating entities BUT that's not all…


The videos posted on this channel also promote his merchandise and Feastables product line, making for a total of 6 separate revenue generating entities. This approach to the platform means that the $3m spent on producing a video is effectively advertising spend for other more profitable revenue streams all while providing amazing, high budget content to viewers.




Big YouTubers see their channels as not only a stream of revenue but also an advertising platform for other ventures, choosing to reinvest the revenue earned back into the channel to accelerate its growth and improve content.


Diversification is the key to longevity on YouTube, if you choose instead to use your revenue as a sole source of income your content will become stagnant and struggle to grow long term.

So you know how the business model works but how can you take advantage to start generating more revenue? Like any business your income is reliant on your customers, in this case your viewers. While monetizing those views can be incredibly lucrative it can take a considerable amount of time and concentrated effort to turn a profit. Relying solely on ad revenue will only get you so far and in many cases will barely cover the cost of producing content. You should instead treat ad revenue as part, if not all of your marking budget, reinvesting your earnings back into your channel to improve the quality of your content. On average YouTube pays out $1-$5 per 1000 views, meaning that the value of a single view can be as little as $0.01. Your goal is to increase the value of each view you get by diversifying your revenue generating opportunities.


To make your viewers more monetizable you need to increase their engagement with your brand over time. There are three tiers of viewer:

  • Casual viewer

  • Engaged viewer

  • Fan

By converting your casual viewers to fans you can slowly introduce them to more products and revenue streams that earn you more money.

This graph illustrates the various actions your viewers can take, how monetizable they are, how likely they are to occur and the level of engagement you need to of established for them to occur. The most lucrative of these actions is the purchase of products, followed closely by sponsor activations. Both of these actions involve the sale of a product or service to your fan base but viewers are very unlikely to partake in these actions if they are not fans of your channel. To engage your viewers they first need to enjoy your content. This means investing more into the quality of the videos you produce and providing value to the viewer in the forms of novelty, entertainment, information and education. If you can do this you are already winning but it will only get you so far.


You need to make your viewers feel involved in your content by building a community around your brand that can actively give input and form connections with others through their shared enjoyment of your content. This changes the nature of your content from passive observation to active participation, turning your brand into a movement or a club rather than solely a source of entertainment. If you want viewers to purchase your merchandise they need to obtain a benefit from openly expressing their enjoyment of your content in public. By attaching ideals to your brand you add value to it that can be expressed and shared with others, making the brand a representation of those ideals. As an example MrBeast is well know for his philanthropy, using the revenue he generates not only to create more top tier content but to benefit the lives of others in unique ways. This add immense value to his brand that sponsors and fans have every reason to attach themselves to. By taking this approach MrBeast is able to influence his audience to perform actions that not only generate revenue but also help others in the process. So how will you add value to your brand? What ideals do you believe in and what are you willing to sacrifice to implement them into your content? How will you use your content to build a community around those ideals and create a space where others can express themselves and participate in your creations?

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