In this article, I reveal exactly how much money I’ve earned on YouTube after 1 year. I also break down the YouTube monetization model – to show how YouTube affords to pay its creators and provide advice for anyone that is looking to start a new YouTube channel.
(Watch the video version of this article here: YouTube Link)
I’ve been on YouTube for a year now — with my first upload on March 6th of 2020. And what started out as a hobby to feed my interest in personal finance, storytelling and video editing, has turned into a viable side hustle that earns me a little bit of income each month.
I’ve learned a lot in these past 12 months, and I’d love to share these learnings with anyone that is interested in the business of YouTube or becoming a YouTuber one day. So in this article, I’ll go over the business model of being a YouTuber and reveal exactly how much money a small YouTube channel like mine has made, over the course of one year.
So in this article, I’m going to cover 3 main topics:
- YouTube’s Monetization Structure — In other words, how YouTube affords to pay its content creators and what that process looks like.
- My Past Earnings — I’ll dive into my channel analytics to show you exactly how much I’ve made in the last 12 months of being on YouTube.
- YouTube Advice — And lastly, I’ll end with a few pieces of advice for anyone that is looking to start a YouTube channel —things I wish someone would have told me when I was first starting out.
YouTube’s Monetization Structure
YouTube’s main source of cashflow is it’s advertising revenue.
You know those annoying ads you see before, during and after your favorite YouTube videos?
Those are ad placements that YouTube sells to companies who then supply short commercials or banner ads that play during your favorite content. And how YouTube gets paid, is that for every ad that is run on a video, there is a CPM or cost per mille that is charged to the advertising company.
CPM means cost per 1,000 impressions. So if a company wanted their ad to be shown 2 million times, and the CPM cost for the audience segment they were targeting was $9 — they would end up paying roughly $18,000 for those 2 million impressions.
That is, of course, a very simplified explanation of the model — in practice there are other costs and parameters that go into it. But, once the ad impressions are paid for, the ad content starts surfacing within the ad placements set on your videos. So if you have 3 ad placements on your video, and each placement displays one ad — then if your video is played all the way through, you would have logged 3 separate ad impressions for your one video view.
And a certain percentage of the total ad cost that the company paid, for their ad placements, are given to you, the creator, based on the volume of ad impressions that have run on your video — that is, after YouTube takes their 45% cut.
Sounds simple right? Well, in order for these ad slots to be placed on your videos, you have to first enter into YouTube’s Partner Program — and there are a few entry requirements that you need to satisfy, in order to be enrolled.
You’ll need to have 1,000 subscribers on your channel, 4,000 hours of watch time across all of your videos and you’ll have to undergo a review process of the content you upload, to ensure that you don’t violate any of YouTube’s guidelines and policies. But once you’ve gone through this application process and have been approved — the monetization function will now be available for all of your content and you simply need to turn it on for the videos you want to run ads on. And YouTube will automatically track you CPM and ad impression counts for you — and remit to you, your portion of the ad revenue on a monthly basis.
My Past Earnings
So, now that you know how the business model of YouTube works, let’s take a look at how much I’ve earned on this platform, in the course of 1 year.
First, let’s take a quick look at the timeline of my YouTube journey.
I uploaded my first video explaining 401ks for beginners, on March 6th of 2020. And it took me about 4 months to reach my 1,000 subscribers count and the 4,000 watch hours I needed to be eligible for the YouTube Monetization program.
So, I got monetized at the end of July and in my first full month of monetization, I earned $711, from YouTube ad revenue alone. And I did this by publishing 19 videos that month and have had a total of 172,000 views across all of those videos with about 157,000 ad impressions that month — so almost one ad for every view.
And in the case of my content, my CPM across those 19 videos was an average of $7.88 — which means, that in aggregate, the advertisers that ran ads on my videos paid roughly $7.88 cents for every 1,000 ad impressions that were served to my viewers.
And at 157k ad impressions, YouTube earned roughly $1,241 off my channel — and after their cut of 45%, I was left with roughly $700 dollars of income for myself.
Now to be honest, $7.88 cents is not a high CPM — but at the volume of views and ad impressions I’ve had across those 19 videos, it really started to add up. And also as a side note — publishing 19 videos a month is tough, and probably more than what a normal beginning YouTuber might do. But I’ll talk more about why I did this, when I get to the third section of this article.
Now, let’s fast forward 8 months to present day — as of March 2021, I’ve published 92 videos, accrued over 8,400 subscribers, have logged over 650k views across my videos, with over 740k ad impressions, with an average CPM of almost $12.
And in total, that’s earned me just over $5,000 of income — over the course of these past 12 months.
Compared to the number of hours and the amount of effort I’ve put into this channel — that’s not a great ROI, but it’s at least something. And the beauty of this, is that it’s now transformed into a semi-passive source of income, where most of my daily earnings are now derived from videos I’ve created months ago.
It just goes to show, that YouTube can become a viable side hustle, if you’re willing to put in the work and are patient enough to stick with it, in the long term.
Now in the past 12 months, not only have I earned a bit of money, but I’ve also learned an lot about the platform itself and the business of YouTube.
And here are 3 things that I’d like to share, 3 pieces of advice for anyone looking to start on this journey.
A) Don’t wait. Just start — right now.
If you’ve ever been thinking about doing something like this — then the best time to start is always, right now.
I’ve always had an interest in film and documentaries — I loved how video could really help enhance the story telling aspect of a particular message or narrative.
But like 99% of all potential content creators out there, when I seriously started to contemplated joining the YouTube community, a couple years ago — I was filled with the same thoughts of doubt, worry and apprehension that everyone experiences.
“What if my videos aren’t that great?”
“What if no one watches my content?”
“What if people hate the things I have to share?”
Every single person on YouTube has faced these self-doubt questions and have eventually found a way to overcome them.
You see, in all reality, it’s true what they say…
You are your own worst critic.
As of last year, 2020, there were over 30 million channels on YouTube — with thousands of new ones popping up each day. And each day over 2 billion users log on to YouTube and consume over a billion hours of content per day.
With that many people on YouTube, chances are, 1% of all of the people that see your content, are just going to like you for who you are.
It’s just like in real life — most people meet around 9k-10k people in their lifetime.
Some of them just come in and out of you life, with no real impact to you.
Some of them become acquaintances — that play minor roles in your life story.
But a small percentage of them, around 1%–2% just like you for who you are and eventually end up become your close friends.
And that’s pretty close to how it works on YouTube — but on a much larger scale.
The majority of the people that visit your content on the platform, won’t really give you a second thought — they’ll watch your video once and then simply move on. But a small 1%–2% of them will find that they just like you for who you are and like your style.
They’ll become the basis for your subscribership.
Then, depending on the type of content you produce, another 1% or so, of your total visitors, will like what you have to say or what you showcase in your videos. And they will make up the remaining composition of your subscriber count.
So imagine that — 2 billion users logging onto YouTube each day, if just a tenth of those people discover your channel and if just 1% of those people hit the subscribe button, you’d have 2 million subscriber channel!
Of course, is not that simple, but the point is, no matter who you are and what content you have to share with the world, there is always that 1% that will want to listen to you — and YouTube is simply a journey to find those people and show them who you are.
So, if there is any self doubt or hesitation on your part about starting a YouTube channel, I would say — set those aside and just start, right now.
Trust me — that 1% of the YouTube population, your audience, is looking for you right now, they just haven’t found you yet.
B) YouTube is a long game of patience and perseverance.
The second piece of advice I have, is to make sure you understand that YouTube is a long game of patience and perseverance.
It will take you a good year or two to start making any real traction on this platform. It takes time but most importantly enough content for you to really start finding your 1% fan base on YouTube.
Remember when I said that I had published 19 videos the first month I was monetized on YouTube?
I did that because I knew that one of the most important things, when growing a new social channel like YouTube, is discoverability — and that translates most easily, to having more content.
Around the time I started my YouTube channel, I knew that there was a lot of hype and interest around the topic of government stimulus. And as I started researching this area, I realized that there was so much confusion and misinformation floating around online — and I wanted to help provide some clarity in this subject. I also knew that because this topic was so broad and because it encompassed so many factors of personal finance, government fiscal policy, and US economics — I knew that there would be enough subject material for me to create a lot of video content, almost one video every other day.
And that’s exactly what I did. I created those 19 videos that month to help provide meaningful information to my viewers, as well give myself as many chances as possible of being discovered — as I knew that every video I released was another chance for me to gain more impressions.
Additionally, building up a content repository on my channel — gave those people that were new viewers, those that have only seen one of my videos, a chance to explore other content I had on my channel. And seeing that I had a library of content waiting for them to consume, gave those viewers more of a reason to become a subscriber.
And since then, I’ve also broaden my topic base to include other personal finance subjects, as well as Tesla related content to appeal to an even wider audience — allowing that 1% out there to discover me and my content.
People always think the most important metric to look at when you are first starting out on YouTube is views or click-through rate or watch duration, etc. And while those are valuable, the most important metric you’ll want to maximize for, early on in your YouTube journey, is actually impressions.
You need to get exposure for your videos — they have to be given a chance to be seen.
Otherwise, it doesn’t really matter how many people click on your thumbnails or how long they watch your videos. You could have an amazing video, with a 50% click through rate, but if you only have 10 impressions — that’s still only 5 views.
So you need to get your content as much exposure and as many impressions as possible — and the easiest way to do that when you are first starting out, is just to have more content.
C) Focus on providing value.
Now, of course, that doesn’t mean you just throw out any kind of half-ass video out there, just to get more content on your channel.
You’ll want to make sure that you produce well-thought out pieces of content that add value to the viewer. And that last part is really the most important — providing value to your viewers.
People come to YouTube, generally, for one of 2 reasons.
The first reason, is for entertainment. There is a lot of great engaging content on this platform and it’s a really good place to see pretty cool, funny and just heartwarming stories online.
The second is for educational purposes.
Whether you come looking for personal finance information or Tesla related videos, like the ones you see on my channel or you want to catch up on the latest headlines, make a purchase decision or you just want to learn how to fix your leaky faucet — YouTube has perhaps the largest library of educational content out there.
So, you’ll want to make sure that no matter what type of video you create — you optimize to provide as much entertainment or educational value to your viewers as possible.
For me, being on YouTube has been thoroughly enjoyable. Sure, it’s hard work — and it’s extra work on top of my 9–5 and spending time with my family. But I love sharing my thoughts and perspectives with the world, and the fact that it provides me a small amount of passive income is just icing on the cake.
So if you’re somewhere in that limbo area, sitting on that fence between wanting to jump into YouTube and being apprehensive about taking the leap — I hope this article has provided you some inspiration/education, to help you make the decision that’s right for you.
**** Disclaimer *****
The content here is strictly the opinion of Daniel’s Brew and is for entertainment purposes only. It should not be considered professional financial, investment or career advice. Investing and career decisions are personal choices that each individual must make for themselves in accordance with their situation and long term plans. Daniel’s Brew will not be held liable for any outcome as a result of anyone following the opinions provided in this content.