There is quite a bit of misinformation surrounding YouTube, the culture of YouTube, the stuff under the hood, the business side, and relationships between YouTubers. But there is plenty people don’t talk about for one reason or another.
I don’t know if it is because it could sound like whining, I don’t know if it is because people feel ashamed or embarrassed by some of it, but with all the attention and focus YouTube and it’s creators are getting, I felt someone should have a conversation about some of these topics.
*Keep in mind, these aren’t personal struggles of mind per-se but are based around conversations I’ve had and observations I’ve made.
You may feel that content creators who have a 100K Subscribers and a Silverplay button have somehow finally “made it on YouTube”, but the reality is not as simple as that.
The far majority of content creators with 50k–500K Subscribers that represent the YouTube “Middle-Class” are not able to live off of their YouTube earnings alone.
That may seem weird or impossible to you considering that many of these creators generate millions of views every month, and you’d think they’d be able to live off of the ad revenue and sponsors opportunities.
If you use the YouTube Calculator on Social Blade there is some interesting math that comes into play.
A channel generating roughly 10 million views per year might only generate $45k/year. This sounds like a lot and it may be more than what you make right now and you day job.
COST OF LIVING, COST OF WORKING, AND TAXES, TAXES, TAXES
However the cost of running a YouTube channel that generates those types of views has cost behind it just like anything else. There is also the fact that YouTubers have to pay taxes on any income they own and they pay a higher tax rate due to being self employed. Some have a 20% effective tax rate.
Many of the YouTube creators in this middle-class category also live in states with higher tax rates such as California and New York, which also have a higher cost of living. This is usually because living in such places offers more collaboration and business opportunities in the long wrong, especially if one wants to be an entertainer such as an actor/actress or work with technology based brands or fashion brands.
And that is in one of the best case scenarios for a channel with 100K-200K subscribers generating decent views each month.
Consider the following though, most of the popular channels within the YouTube Middle-Class are entertainment based and won’t always get premium ad placement.
Additionally YouTube only monetizes 30–60% of views on average. Also consider 20% of users are now reportedly using Ad-Block, meaning these creators aren’t getting ad revenue from those viewers.
WHAT ABOUT SPONSORSHIP MONEY?!
Here is something that very few people talk about. Even with a 100K subscriber channel, depending on the average views per video, sponsorship fees range from $500–$5,000 depending on the brand an on your niche. There are exceptions that can be $5,000-$10,000 but not much higher until you break 250,000 Subscribers or unless you are getting a very high level of average view per video, the exceptions being popular micro-niches or a product that has a high enough price point that the ROI easy enough to turn around.
This also assumes you can secure sponsorships for you channel, and it also assumes that your audience doesn’t react negatively to you doing sponsored videos regularly, which many are vocal about.
DO I MAKE A LIVING FROM MY YOUTUBE CHANNEL?
I hate this question with every fiber of my being, because I can’t answer it without sounding pretentious. The answer is “I make somebody’s living, from my YouTube channel…”
See what I mean? I run my own business, Create Awesome Media, where I work with clients on their marketing, content strategy and social media communication strategy. In addition to that I hire freelance creatives to help me produce and edit video, motion graphics and campaigns.
When I’m not doing that I’m speaking, and also do some paid writing and private coaching. Meaning I have a business that I make a decent living from independent from YouTube. I also live in the south which means my cost of living is roughly half of what some of my friends in the YouTube world have.
But what I can tell you is that I could live pretty comfortably between my adsense revenue, sponsorships, and affiliate marketing directly tied to my YouTube channel (More than the median household income for U.S.). If I wanted to always worry about when YouTube makes changes or someone says something negative about me… oh and also as long as I don’t live in California or New York.
Are All YouTubers with Less Than 1 Million Subscribers Struggling?
I can’t speak for all of these mid-level YouTubers, but many are struggling and some have come forward about it in their videos, in article interviews and even in their social media such as Twitter.
The other issue is that many of these creators have tied their entire financial future and their identity to being a YouTuber. This is not practical or sustainable. Because YouTube in and of itself is not a “Job” whether you make money from it or not. Nor is it in and of itself a “Career” its a platform/venue. You can’t put YouTuber on a resume, at least not yet, and Google isn’t sending you a W2. I’m not trying to have the “real job” debate because I don’t believe in it’s thesis. I’m saying that you have to look beyond YouTube.
If you are able to be successful in YouTube it typically requires certain skills, such as video editing, video production, social media, and so on. You should probably utilize and market those skills outside of YouTube and cash in on them whenever possible and build a brand that lives outside of YouTube. I think the problem is that Big YouTubers have sold this dream of being a YouTube Star and living off of your channel and having the life you want. But few of them talk about the businesses they run in the background and the fact that many of them are also now investors in startups, or even other channels and even Multi-Channel Networks.
Do I think they should disclose all of their business dealings? No, heck I’m certainly not unless its relevant to something. But I think that it is creating a bubble and a false narrative for upcoming creators who face more competition for views, attention and ad revenue than many of their idols did in the early days of YouTube.
ADVICE AN ENCOURAGEMENT FOR MIDDLE CLASS CREATORS
When not working on producing and editing content for your YouTube channel, try to find work doing video editing or work behind a camera in your local area or doing work for other YouTube creators. In most cases it will pay more than a part-time job, and in some cases more than a full-time job. You can use your channel as a body of work.
Save as much of your earnings as possible, particularly the larger payouts you get from sponsors. Saving and accumulating your money or even putting it in a retirement account is one of the most practical things you can do when you’re doing something that lacks stability month to month.
Maintain professionalism outside of your channel. Regardless of your on camera persona, be professional in all of your communication privately and in social media. People have a bad habit of making screenshots of every DM and every email in this day an age, so assume no communication is private.
Finally, have a plan for beyond YouTube, understand there is a real possibility that somehow you may not be able to operate on the platform. Think about your brand, your identity, your life and your career with that very real possibility in mind and who you are after YouTube… because at some point that reality will arrive in one form or another. This isn’t a scare tactic or meant to be discouraging, look at what happened to Vine.