- Okay, so if you spend any amount of time on YouTube,
you've possibly wondered at some point,
how much money do these YouTubers actually make?
Is it related to how many views, or how many subscribers,
or all these different factors?
So, in this episode of Oversharing,
I'm gonna break down
exactly how much money I make from YouTube,
and I'll be explaining how this whole thing works.
So, that if you wanna get into it, you can.
Or, if you're just really curious,
you can indulge your curiosity.
We'll start by talking about the logistics
of how people actually earn money on YouTube
and how it works.
And then, we'll talk about the three main factors
that affect how much an individual earns on YouTube.
And then, we'll go under the hood
and I'll be exposing all of my analytics
for the last three years,
so you can see how much money I really make.
So, to start making money on YouTube,
you first have to join the YouTube Partners Programme,
which means these days,
you need to have at least a thousand subscribers
and 4,000 hours of total watch time on YouTube.
So, you can't start monetizing
the instant you turn on your channel.
Once you've hit those landmarks,
then you can apply for the programme,
and if you're approved for it,
you can then turn on ads on your videos.
This is optional, but when you turn on ads,
and people would probably usually see a five-second ad
before the video,
and might see some mid-roll ads during the video,
and possibly a five-second ad after the video.
And the idea is that YouTube sells these ad slots
to advertisers through their Google Ads programme.
So, advertisers can then pay to show their ads
on different types of content,
and they might wanna do it
based on a whole lot of different factors.
Now, the problem is that when you are very small on YouTube,
you actually aren't really earning very much money at all,
and I recognised this.
So, for me, when I started my YouTube channel in June 2017,
I made 77 videos before I turned on monetization.
I think I turned on monetization roundabout April 2018,
because to my mind,
making five or $10 a month from YouTube
was just not worth the annoyance for the audience
in watching the ads.
But, if that number was gonna be $500 a month,
at that point, it would be worth subjecting the audience
to the annoyingness of ads,
because it was making me a significant amount of money.
And so, for example, from June 2017 up until April 2018,
I had 340,000 views,
8,300 subscribers,
and I made one pound 96 in total across that.
But then, when I turned on monetization,
for the next six months,
from April 2018 to September 2018,
in total, I made 6,106 pounds and 42 P.
So, that's the logistics out of the way.
Let's now talk about the three factors
that affect how much money you earn on YouTube.
And the most important of those is actually watch time.
So, watch time is quite important,
both from a revenue perspective
and also from a YouTube algorithm perspective.
So, from a revenue perspective,
it's important because the longer
people are watching your videos,
the more opportunity they have to see ads.
But, from a YouTube algorithm perspective,
watch time is interesting
because although no one quite knows
exactly how the YouTube algorithm works,
the YouTube creator team have hinted,
a lot of it is based on watch time.
If your videos are making people watch for longer
and also stay on YouTube as a platform for longer,
then your videos are more likely to be recommended
by the algorithm.
And so, that's partly why these audience retention graphs
that we see in our YouTube Studio, these are so important.
And if we look at my four previous videos,
you can see the audience retention graphs
are really not very good.
For most of these videos,
even for the ones that I think are pretty good,
we're dropping off to about maybe only one in four
or one in five people are actually watching
all the way through to the end of the video.
And you can see there's a significant decline
right at the start.
Usually, this is because people click on a video,
within five seconds they realise that can't be bothered
to watch the video, so they go away from it.
So, you get this precipitous decline.
And then, you get a general decline
as you go through the video,
which just shows that there's nothing in particular
that's making people click away from it.
It's just that people are slowly attritioning over time.
In fact, some people say that the more viral a video gets,
the less your audience retention is gonna be good.
For example, in one of my recent videos,
called How I Type Really Fast,
which amazingly went viral,
loads of people watching that video
are people who don't know who I am.
They're not subscribed to my channel.
Therefore, they're a lot less likely to watch
17 minutes of me spouting on about something or another,
which is why the audience retention graphs
for that particular video look so abysmal,
even though that video had a lot of views.
Let's have a look at some of my more popular videos
and we can see how watch time relates to revenue.
So, for example,
if we compare the video of My Productivity Desk Setup
with the video of Which iPad Should You Buy,
the desk setup video has made about 1700 pounds
with 1.4 million views,
and the iPad video has made 2,246 pounds
with 1.3 million views.
So, that's kind of weird.
The iPad video has made more money,
even though it has fewer views.
But, if we look at the watch time,
the desk setup only has 75,000 hours, which is quite a lot,
but the iPad video has 124,000 hours.
So, it's about a 50% increase.
But, then on top of that,
we also have an extra feature, which is mid-roll ads.
This was something that Google and YouTube introduced
a few years ago,
and that meant that on any video above 10 minutes,
you could have mid-roll ads.
So, sometimes those are ads
that are those little option banner ads
that appear in the middle of video.
At other times, they're more annoying,
like five second ads that interrupt your video,
(guitar music)
that you have to skip,
and then you can watch the rest of the video.
But, crucially, this only applies to videos
that were over 10 minutes long.
And so, a lot of YouTubers realised this
and started kind of artificially inflating
the length of their videos to make it more than 10 minutes.
For example, if we take a look
at my YouTuber friend and colleague, Shelby Church,
she's done a video where she breaks down
how much money she makes off YouTube,
and she looks at the difference
between a nine-minute and a 10-minute video.
And she found that her videos that are over 10 minutes
earn over three times as much revenue
as the videos that are under 10 minutes.
So, it makes such a big change,
which is what kind of incentivizes YouTubers
to have longer videos,
just so they can get these mid-roll ads in.
And actually recently in the last couple of months,
YouTube has made a change,
whereby you now only need it to be eight minutes long
before you can start adding mid-roll ads.
So, I suspect people are gonna be less keen
to inflate above 10 minutes,
and now a little bit more keen to inflate
above eight minutes.
So, the second thing that determines
how much money you're gonna make is the type of content.
And that's what dictates the CPM, or cost per mille,
which is Latin for like cost per thousand views
or something like that.
And the CPM changes on a lot of things,
but mostly it's based on how much advertisers
are willing to pay to target a certain type of video.
And so, depending on the topic,
you would get different rates.
So, let's say I make a video about, I don't know,
a fantasy book that I like.
The sorts of companies that are advertising in those videos
probably don't have a lot of money.
They're probably book publishing companies, stuff like that.
Whereas, if you were to make a video about finance,
or real estate, or credit cards,
the companies that advertise on those sorts of videos
have loads of money to burn.
And so, your CPM rates are gonna be higher.
So, in general, for most YouTubers,
the CPM is around three to $7 per thousand views.
But, if you pick the right sort of video topic,
it can go up to about 30 or $40 per thousand views,
which is absolutely huge.
For example, most of my videos
are in the three to seven pounds range.
But, if we look at Shelby Church's video,
where she talks about how to make money
using Amazon's FBA, Fulfilled by Amazon programme,
that's a prime video for advertisers to target
because it's a video about making money online,
and therefore loads of people who have courses
about making money online
are gonna target that particular audience.
And we can see from her channel that she says
her playback-based CPM was $35.60 cents,
which is absolutely enormous.
And so, she's making more than 10 times as much money
as she would be making on a different kind of topic video,
just purely based on the choice of topic.
Unfortunately, the CPM doesn't actually go to the creator.
YouTube tends to take a 45% cut of CPMs.
And so, if your CPM is $10,
you're actually only gonna get $6.50 off that amount.
And that leads to a new metric
that they've recently introduced, called RPM,
which is revenue per mille.
And that is a more accurate idea
of how much money you, as the creator,
are taking home from these videos.
The third major thing that influences
how much money we make on videos
is the role of sponsors.
Now, essentially, if a video is sponsored,
then at some point during the video,
the creator is gonna make some kind of spiel.
So, for example,
I might say that if you want to start your own journey
of making money online,
one of the best ways of doing that
is by learning how to code.
To learn how to code,
you should start by teaching yourself HTML and CSS.
And then, you should learn
a server side language, like Python.
And actually the best way to learn Python
is by following an online course over at Brilliant,
who are very kindly sponsoring this video.
If you don't know, Brilliant is an amazing platform
with online courses for math, science,
and computer science,
and their introduction to Python and advanced Python series
is actually a really good, interactive, fun way
of learning how to code in Python.
And then, once you learn how to code in Python,
you can basically build anything from a simple website
all the way through to machine learning algorithms.
It's one of the most popular programming languages
in the world and Brilliant is a great place to learn that.
They've also got fantastic courses on math and science.
They've recently got one about uncertainty,
which is all about kind of navigating probability
in an uncertain world.
So, if that sounds up your street,
you should definitely head over to brilliant.org/ali
and the first 200 people to click that link
will get 20% off the annual premium description.
So, thank you, Brilliant, for sponsoring this video.
That's an example of a sponsored message.
And so, Brilliant are gonna pay me
a certain amount of money for plugging that within my video,
and that massively changes how much money
I'm gonna be making from this video.
A few things kind of complicated.
So firstly, most contracts with sponsors
say that you're not allowed to say
how much money you're making from them.
So, I'm not allowed to tell you how much money
Brilliant have paid me to do that particular sponsor plug.
But, with some channels, like Casey Neistat, for example,
he says he makes between 10,000 and $100,000 per video.
- As in like more than $100,000.
- Even though, he's absolutely huge,
he's a lot bigger than I am.
But, it just kinda gives you an idea
of the numbers that get thrown around.
And in fact, a lot of huge YouTubers
make more than $100,000 per sponsored video,
which is just insane.
So, we've talked about the different factors
that influence how much money YouTubers make.
Let me now take you inside my YouTube Studio,
my YouTube Studio app thingy,
and I'll show you how much money I've been making
from each of the videos,
and we'll talk about that a little bit more.
So, this is the lifetime revenue of my YouTube channel
since about June 2017,
when I first started uploading videos.
And so, we can see that for the first absolutely ages,
I'm making sometimes one penny per day,
but basically I'm not making anything until April 2018.
I think it was 17th April.
I remember this day when I turned on monetization.
And so, now I'm going from making absolutely nothing per day
to making 11 pounds, eight pounds, nine pounds, 16 pounds.
So, immediately, having already been a YouTuber
for like nine months at this point,
and having made 77 videos already,
I'm now making sort of between five and 15 pounds a day
off of YouTube ads,
which at the time was pretty great.
I was already feeling like I was winning at life
because that pays for a takeaway every single day
if I want to.
And that just felt like, it kind of felt like cheating,
that I can basically eat for free
now that I have a YouTube channel, which was quite nice.
So, we can see in May 2018, 16 pounds 72,
and then kind of dropping down to three pounds,
three pounds 68, 10 pounds.
And then, we start in June 2018,
I think this was when I made my iPad video.
Yeah, this was a special video.
How I Take Notes on My iPad at Medical School.
But, as soon as that video comes out,
suddenly my revenue skyrockets
from five pound 91 and four pound 69 a day,
all the way up to sometimes 60 pounds a day,
and 40 pounds a day, and 70 pounds a day.
And again, this really felt like cheating at the time
because I was like I can't believe
I'm making this much money off YouTube.
I'm making like 50 pounds a day.
That was like 1500 quid a month,
and that just felt, again, like this is amazing.
I'm making real actual money from YouTube.
It's not just a few pennies here and there.
This is 1500 pounds a month.
This is actually a large amount of money.
Over time, we can see it doesn't really change much
for the next year.
So, for around 12 months after that,
I was sort of hovering between the,
making a few dozen pounds a day off of YouTube ads,
which was still pretty good.
But then, over time,
we can see that the graph really starts to increase.
So, throughout 2019, the rate bumps up a bit.
So, some days I'm making over a hundred pounds a day,
which is again, absolutely insane.
And then, we've got a 97, 88, 95, 100, 100,
all the way through to September 2019.
And then, what's really cool about this graph
is just how much of an exponential rise it's been
over the last six months.
Basically, since lockdown started.
So, I think kind of lockdown was pretty good for me
and the YouTube channel because now all of a sudden,
loads more people are watching,
sitting down and watching videos.
And now, we can see that these days, for example,
Friday, the 3rd of July, 578 pounds in a single day.
That's pretty good.
Sunday, 23rd of August, 2020, 711 pounds in a day.
If you told me a couple of years ago,
I was gonna make 700 quid in a day from YouTube ads,
I would literally have had a stroke,
and I would've thought no, go home.
This is not, this is not gonna happen.
It's a very much like an, sort of slow and steady,
slow and steady, and then all of a sudden,
it starts to grow.
And that's only really happened in the last six months.
It's one of those weird things,
whereby it almost feels like playing a video game,
where your character starts off kind of on level one
and you can't kill anything.
And then, you can start kind of killing some stuff.
But then, at some point,
you get to kind of what feels like the end game,
where your character starts getting a lot more powerful,
and suddenly you can just kind of do all these things
that you couldn't have done before.
And that's kind of what it feels like
on the sort of exponential growth of YouTube revenue.
And if we kind of put this down to the last 28 days,
we see, yeah, estimated revenue
in the last 28 days, 11,618 pounds.
Whereas, estimated revenue of the lifetime
was about 90,000.
So, in the last one month, I've made about 10%,
11, 12% revenue compared to the last three years,
which is pretty good going.
And we can see here that the CPM, the cost per mille,
is five pound 50,
but the actual revenue per mille is only one pound 68,
and that's because loads of people have ad block.
It's because YouTube takes a cut
and all these different factors.
So yeah, last 28 days, 11,618 pounds.
This is pretty good.
For context, my junior doctor salary
was about 3000 pounds a month, pretax.
This is also pretax.
So, this is three and a bit times more
than my monthly doctor salary.
If you wanna see how much money I've made
from other sources, that video,
How Much Money I Make in a Week as a Doctor on YouTube,
it will be linked to the little playlist over there,
along with a couple of other videos
about how to make money online
and how you can get started
on this journey of #passiveincome.
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