The most straightforward way to calculate expected earnings for a YouTube channel is through CPM (which stands for “cost per mille”). Mille is the latin word for “thousand,” so CPM is the cost an advertiser pays for 1,000 impressions or views.
As a YouTube content creator, you can make money from ads (more on that later). As a general rule, YouTube keeps 45% of the ad revenue. The 55% that you get is known as RPM, or revenue per mille.
While CPMs and RPMs vary significantly depending on factors like location and the topic of your content, Media Shark reports that the average CPM on YouTube in the U.S. is between $6 and $8, which means the average RPM is between $3.30 and $4.40.
We’ll round that to $4 RPM for our estimates.
At $4 RPM, you would need 100,000 views per month to make $400 in ad revenue. That number (100,000 views) sounds high, but as you add more videos to your channel and grow your subscriber base, you should be able to get more views.
Channels that have hundreds or thousands of videos can rack up views pretty quickly.
Here’s a chart that shows how much you would make (based on $4 RPMs) with different numbers of monthly views.
|RPM||Monthly Views||Ad Revenue|
This table should give you some idea of what’s possible on YouTube and how many video views you’ll need to get to earn a part-time or full-time income.
Keep in mind that this is based on advertising revenue alone. As you’ll see throughout this article, there are several other legit ways to make money on YouTube.
The Highest-Earning YouTube Content Creators
Most of the top-earning YouTube creators focus on funny and/or entertaining videos that target young audiences. Of course, YouTube channels of all types can earn significant income (starting one on a topic you’re passionate about is a great way to make money with your hobby), but the viral videos that target young audiences tend to generate the most views, which leads to the highest earnings.
In 2020, 9-year-old Ryan Kaji was the highest-earning YouTube star for the third year in a row.
His earnings for three recent years are:
- 2020: $29.5 million
- 2019: $26 million
- 2018: $22 million
Kaji’s channel Ryan’s World — which his parents launched with him at the age of 3 — gained popularity for videos unboxing and reviewing toys.
If you’ve been skeptical of the earning potential of YouTube, you’ll be hard pressed to find many other business opportunities that have been used to grow an estimated net worth of $32 million to $50 million before the age of 10.
In 2020, MrBeast and Dude Perfect ranked second and third on Forbes’ list of highest-earning YouTube stars. Both of these channels feature entertaining and funny videos like stunts and trick shots. MrBeast (real name Jimmy Donaldson) pulled in an estimated $24 million in 2020 as his popularity skyrocketed. Dude Perfect, a five-man group, brought in an estimated $23 million.
David Dobrik, ranked ninth on Forbes’ list, also focuses on entertainment and humor, but with a different approach than MrBeast and Dude Perfect. Dobrik publishes vlogs that show anything from David in an Iron Man jet pack to tips for hacking vending machines.
Gaming-focused content is another popular niche, with many creators earning seven figures a year. Markiplier (real name Mark Fischbach) was number five on Forbes’ list, and Preston Arsement came in at number six. Markiplier has amassed more than 30 million subscribers with a huge collection of videos that cover different video games. Arsement owns a few different gaming YouTube channels, but he initially gained popularity with Minecraft videos.
Here’s the full 2020 list of top earning YouTubers, according to Forbes (with links to their channels):
- Ryan Kaji: $29.5 million
- MrBeast (Jimmy Donalson): $24 million
- Dude Perfect: $23 million
- Rhett and Link: $20 million
- Markiplier (Mark Fischbach): $19.5 million
- Preston Arsement: $19 million
- Nastya (Anastasia Radzinskaya): $18.5 million
- Blippi (Stevin John): $17 million
- David Dobrik: $15.5 million
- Jeffree Star: $15 million
Earning Methods Beyond Ads
Many of the highest-paid YouTube stars have leveraged their popularity on YouTube to launch their own line of products or land licensing deals with major companies. For example, Kaji’s line includes thousands of Ryan’s World products that are available at Walmart, Target and other major retailers.
Likewise, Dude Perfect has worked with Nerf to create branded products that kids (and those who are young at heart) can use for their own trick shots at home.
Naturally, some YouTubers have also landed TV or movie deals as a result of their stardom. Part of Kaji’s massive earnings comes from a Nickelodeon series. In the past few years, a growing number of YouTube stars have also been cashing in by growing a following on other video platforms like TikTok, a trend that seems likely to continue.
Related: How to make money on TikTok.
Of course, the YouTubers mentioned above are the exception, not the norm. Many YouTube channels and video content creators make very little or nothing at all. For others, their YouTube channel provides supplementary income or a full-time income, even if it doesn’t lead to generational wealth.
As you can see, the earning potential is certainly outstanding if you’re able to hit it big as a YouTube star. But what’s more encouraging for average people like you and me is that, according to Forbes, 1 million YouTubers are making a six-figure income on the platform, and that number is predicted to grow exponentially.
Ways to Make Money on YouTube
Now that you’ve seen how much the top-earning YouTubers are making, you may be wondering where that money is coming from. There are several different ways to make money from a YouTube channel. Here are the leading options.
#1. Show Ads In Your Videos
The most popular and most straightforward way to make money on YouTube is through advertising revenue with the YouTube Partner Program. While there are many factors that impact how much you’ll earn, in general, getting more views of your videos will lead to more ad revenue.
Earning potential: A few hundred dollars per month to six figures per month.
Difficulty: The hardest part of making money with ad revenue is getting started. To qualify for the YouTube Partner Program, your channel must have at least 1,000 subscribers and at least 4,000 public watch hours in the past 12 months. It takes many YouTubers several months or longer to reach these levels (there are more than 2 million members in the YouTube Partner Program). However, once you’re in the program, monetizing your videos is as simple as turning the ads on.
With ad monetization turned on, you’ll make money from ads shown before, during, after and/or beside your videos. The amount you make will vary depending on the number of clicks the ads generate, the number of views, and the amount advertisers are willing to spend to reach your audience. A moderate amount would be somewhere around $4 per 1,000 video views, but the specifics will vary significantly from one channel to the next.
Ad revenue is enticing for content creators because it requires no extra effort on your part. All you need to do is turn on the ads and ensure that your videos are generating views. If you have a steady flow of traffic coming to your channel, ad revenue is passive income. Without needing to dedicate a lot of time or effort to monetization, you can focus on creating new content that will lead to even more views and more ad revenue.
#2. Get Tips From Viewers
In 2022, YouTube began rolling out its long-awaited tipping feature, which is called “Super Thanks.” This feature allows you to earn money directly from viewers, who can send tips along with a customized comment that gets featured in your comment section (as well as an animation that gets sent only to the creator.
Earning potential: The four options for tips are pre-set for viewers at $2, $5, $10 and $50. Creators receive 70% of their Super Thanks proceeds.
Difficulty: Once your channel reaches the threshold for monetization (1,000 subscribers), all you have to do is toggle on Super Thanks to be able to start receiving tips.
Note that monetization from tips is unavailable on videos that are age-restricted, made for kids, or which contain content ID claims.
Here’s a video from YouTube that explains how Super Thanks works in more detail, including how to set it up and track your earnings.
#3. Sell Custom Merchandise
With the help of YouTube’s Merch Shelf, you can display and sell products directly from your YouTube channel.
Earning potential: The high end of merchandise revenue exceeds what you can make with ads. According to Sellfy’s YouTube Money Calculator, the average YouTube channel with 10,000 views per month could generate $13 to $40 in ad revenue per month, and $340 to $1,740 in revenue from product sales.
Difficulty: Getting started with Merch Shelf is difficult because you need at least 10,000 subscribers before you can apply. Additionally, the channel content cannot target kids if you want to monetize with Merch Shelf.
Creating and selling products is an ideal way to increase earnings from a YouTube channel due to the high earning potential. If you don’t want to deal with manufacturing a product yourself or taking a private label approach, you could also partner with brands and sell licensed products from your channel.
With the minimum requirement of 10,000 subscribers, you’ll need to have some success with growing your channel before you can even get started with your own products. However, there are other options if you want to offer products before you reach that milestone.
For example you could set up an e-commerce website with Shopify and promote your products within your video content and descriptions. You won’t have the ability to sell directly on YouTube like you would with Merch Shelf, but you can still use your channel’s reach to funnel traffic to your products sold on another site.
#4. Charge For Subscriptions to Your Channel
While most content on YouTube is free for anyone, you have the option to offer channel membership that provides specific perks for paying subscribers. You can offer extra videos, live chats, badges and more to encourage viewers to pay a recurring subscription.
Earning potential: Channel membership prices can be set from $1 to $49.99 per month. Of course, the amount you earn will depend on your prices and the number of subscribers you have. A few hundred to a few thousand dollars per month is a realistic possibility, but you’ll need a substantial audience to reach the upper end of that range.
Difficulty: You need at least 1,000 subscribers to qualify for channel memberships, and it’s not available with content made for kids. It’s not extremely difficult to qualify or implement, but the bigger challenge is convincing free viewers to pay a monthly subscription fee. You’ll need to offer exclusive content or perks that clearly justify the price. And you’ll need to keep producing more content so people remain subscribed.
YouTube makes offering channel membership easy, but it comes at a price. YouTube keeps 30% of the revenue generated through subscriptions, which can add up to a lot of money. An alternative is to use another platform for exclusive members-only content. For example, Patreon keeps 5% to 12% of subscription revenue depending on the plan you choose.
#5. Use Affiliate Marketing
As a video content creator, you can make money by promoting other companies’ products and services and earn a commission for the sales you generate.
Earning potential: A few hundred dollars per month to six figures per month.
Difficulty: Affiliate marketing is one of the best ways to start monetizing a YouTube channel. There are affiliate programs in every niche and industry, and you don’t need a specific number of subscribers or views to get started. Even small channels can make money through affiliate programs.
Affiliate marketing is one of the most popular monetization options for bloggers, and it also works very well with video content. The amount you’ll earn from each sale you refer will vary depending on the product or service you’re promoting. There are many products that pay hundreds of dollars per sale or more.
You’ll be able to use your affiliate tracking link in the video description, or within the video itself.
If you want to make money as an affiliate, you’ll need to create content that lends itself toward the promotion of a product or service. For example, you could create product reviews, comparisons (comparing two or more similar products), tutorials that show how to use a product, testimonials or other types of videos that naturally allow you to promote or endorse a specific product.
Search traffic is key for most YouTubers who are successful with affiliate marketing. If you’re creating a video review of a popular product that gets a lot of searches and you’re able to rank at the top of the search results, you can make a lot of money with a single video.
#6. Be an Influencer
A growing number of brands and companies are looking to partner with influencers to help connect with their target audience. YouTubers may get paid to create videos for sponsors, which is an ideal way to leverage and monetize the following you’ve built.
Earning potential: According to Dummies.com, video influencers typically make between $500 and $5,000 per video. Of course, the details will vary depending on your reach, the specific audience you target, and the brand that’s paying you.
Difficulty: Becoming an influencer requires you to have loyal followers that care about your opinions and the products and services you recommend. You don’t need millions of subscribers, but you do need to have influence with the people who watch your content — and that takes time to develop. As a result, getting paid to be an influencer isn’t an option until your YouTube channel is well established.
According to Statistica, influencer marketing budgets are expected to increase by 25% from 2021 to 2023. With companies shifting money away from traditional forms of advertising and using it for influencer marketing, the possibilities of making money on YouTube should continue to increase over the next few years.
Platforms like Aspire, Channel Pages, Julius and Lumanu are perfect for YouTubers looking to connect and collaborate with brands. BrandConnect is YouTube’s own program for connecting creators with brands.
You’ll need to be sure that you’re still creating enough entertaining or informative content that your followers continue to pay attention to you, but mixing in some sponsored content is an outstanding way to make money on YouTube.
#7. Get Donations
If viewers appreciate your YouTube channel, they may be willing to make a voluntary donation as a way of saying “thank you” and encouraging you to create more content.
Earning potential: While it’s possible to make money with donations, you’re unlikely to earn a significant amount. The truth is, most people won’t donate. While your earnings will vary, don’t expect to make more than a few hundred dollars per month from donations.
Creators who want to make money on YouTube may want to consider accepting donations, but it should not be the primary monetization strategy. The other options covered in this article provide better upside and are more likely to lead to a significant income.
Another similar option is to take advantage of the Super Chat and Super Stickers that are a part of the YouTube Partner Program. Super Chat and Super Stickers can be used during live streams as a way to make more money. Viewers watching a live stream with chat enabled can purchase a Super Chat or Super Sticker that stand out in the feed, thanks to color and animation. The more they pay, the longer the message will stay pinned to the top of the chat. These features are not available for age-restricted content or content for kids.
Related: You can also make money on Snapchat through donations.
#8. License Your Content
Content creators have the option of making money through the licensing of their content. In this case, the content creator maintains the copyright, and the licensee pays for the rights to use the video with specific terms or guidelines.
Earning potential: Your earnings will depend on how much content you license and the level of demand for that content, but it’s possible to earn five or six figures per year from licensing fees.
Difficulty: Making money with licensing is one of the more difficult ways to monetize your YouTube channel because you’ll need to create the type of content that businesses want to license, and you may need a lot of exposure to land some licensing deals.
One option is to leverage your reach on YouTube to get exposure for content you’ve specifically created with licensing in mind.
For example, if you have a travel-focused YouTube channel, you could create travel videos, including aerial footage from a drone, that would be ideal for businesses looking for stock video clips.
See also: How to get paid to travel.
This type of content may not be the backbone of your YouTube channel, but you could link out to your profile on a video rights marketplace or microstock site to get visibility for this content. As a result, your reach on YouTube may help to generate licensing revenue.
How Much Do YouTubers Make: Closing Thoughts
YouTube is the second most popular website in the world, behind only Google. Because of its massive audience and the surge in demand for video content, it’s one of the side hustle ideas with the most earning opportunity.
With that in mind: while the top-earning YouTube stars make tens of millions of dollars per year, there are far more YouTubers that earn a comfortable living by creating video content. So if you’re looking to start an online business, a YouTube channel is one option you should consider.
With all of the monetization options covered in this article, earning money on YouTube is a realistic goal.