Why You Probably Won’t Get Rich & Famous on YouTube

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For most of us, YouTube is a great way to share videos with family and friends or to kill a few minutes during the day with some free video entertainment. For many, however, YouTube is a full-time job. Billions of dollars are spent each year on video ads that run in YouTube videos, allowing the makers of popular videos to generate passive income streams from their contributions to the site. Earlier this week, we profiled 25 celebrities who got rich and famous on YouTube.

Making a few dollars of revenue on YouTube is easy enough; it can be done with a basic webcam and a few hours of spare time.

Generating a meaningful revenue stream from YouTube is much more challenging, and a feat that only a very small percentage of YouTubers ever accomplish. In order to make real money from YouTube, you’ll have a few major challenges to overcome. Below we’ll highlight while many YouTubers fizzle out after only a bit of revenue and a handful of videos. 

Reason #1: It’s Extremely Competitive

Unfortunately, you’re not the only person out there who’s had the idea of starting up a YouTube channel as a way to make some additional money.

Here are some of the more impressive stats about the market for online video:

We’re at the point where there is nearly an hour of YouTube video watched for each person on earth. That’s a massive amount of time spent watching videos on a monthly basis. But it’s spread out over a massive number of videos, meaning that there is intense competition for those viewing hours.

Reason #2: Most Videos Get Little to No Attention

There are numerous examples of videos from amateur producers that have gone on to receive millions of pageviews and generate a fair amount of money in the process. This video of a mother-son wedding dance has been viewed more than 2.5 million times. This one of an ABBA-themed promo for an animal shelter has been viewed more than 3 million times.

The list of unlikely viral hits from unknown creators goes on and on. This gives potential YouTubers some big expectations; if they can do it, why can’t I?

The list of videos that have received almost no traffic, however, is much, much longer. YouTube is designed to highlight popular and trending videos, so many users only ever come across the best or most viewed pieces of content. But underneath the cream of the crop is a glut of old videos that have been viewed maybe 100 times. For every success story, there are dozens of “misseslike these.

Getting detailed data on the performance of the average YouTube video is tough, in part because of the massive size of the video library. A few years back, it was revealed that half of YouTube videos get fewer than 500 pageviews, and that only 0.33% of videos crack the 1 million view mark. These numbers have likely changed since then, but the general “top heaviness” of the video market remains.

YouTube Distribution - 2009

Again, the chart above is several years old. The number of YouTube viewers and the number of videos have skyrocketed since then. But it’s very likely that the general pattern still holds: a small number of videos generate the majority of views, while most videos are only ever seen a handful of times.

YouTube has a massive amount of content, and the quantity of content is growing rapidly. According to official YouTube stats, more than 4.3 million hours of video are uploaded each month, meaning that the number of videos competing for views is constantly growing.

Reason #3: Paid YouTube Channels Have Been a Bust

In late 2013, YouTube made it possible for content creators to develop paid channels that would require a monthly subscription. It’s an exciting idea for content creators, as it opens up a new monetization avenue.

So far, the response has been underwhelming. There are only about 100 paid channels up and running, representing an insignificant amount of total YouTube content:

PaidYouTubeChannels

A lot of the premium channels have elected to keep the number of views their videos have received private. (This can be done with a simple check-of-the-box in the channel settings.) That makes it tough to tell just how popular the channels that are up and running are.

But there are a few that do share this information, allowing us to get some insight into how much interest these premium channels are getting. Here’s one example, from a paid oil painting channel (which actually looks pretty cool):

Paid Example

There’s definitely a “proof of concept” here in the sense that the numbers are greater than zero. But these premium videos aren’t exactly racking up thousands of pageviews as soon as they’re published.

There might be a couple hundred paid subscribers to this channel, which isn’t bad considering that a membership costs $20 a month. In other words, there’s money here but it’s not a huge amount. This paid channel might be making a few thousand dollars a month, but probably not more than that.

So there are positives and negatives here; it’s clearly possible to generate some incremental revenue from this channel, but making serious cash seems to still be pretty tough.

Reason #4: Content Creators Get Only a Portion of What Advertisers Pay

Even if advertisers are paying a decent amount to promote their products through video ads, only a portion of their expenditures ever make it into content creators’ pockets. For example, if advertisers are paying an average of $20 per 1,000 ad impressions, the videos where those ads are being shown may generate only $2 or $3 per 1,000 views.

This huge discrepancy occurs for a couple reasons. First, YouTube takes 45% of the gross revenue generated, leaving 55% to the content creators. That “split” is fairly reasonable within the industry; most networks take half of the gross revenue in exchange for the services provided.

Second, ads don’t run on every video view. If you have monetization enabled on your YouTube channel, check out a few of your videos and take note of how frequently ads appear. Though spending on online advertisement (i.e., demand) is increasing, it hasn’t come close to catching up to the number of videos viewed online (i.e., the supply of “monetizable” videos).

In other words, the fill rate on YouTube ads is less than 100%. In some cases, it may be less than 50%. That means that from a monetization perspective, a significant amount of your views are going to waste.

Assuming a 45% cut for YouTube, here’s how different advertiser CPMs break down to the owner of the channel that created the content:

Fill Rate and Gross RPM
Paid by Advertiser
Fill Rate $12 $16 $20 $24 $28
10% $0.66 $0.88 $1.10 $1.32 $1.54
20% $1.32 $1.76 $2.20 $2.64 $3.08
30% $1.98 $2.64 $3.30 $3.96 $4.62
40% $2.64 $3.52 $4.40 $5.28 $6.16
50% $3.30 $4.40 $5.50 $6.60 $7.70
60% $3.96 $5.28 $6.60 $7.92 $9.24
70% $4.62 $6.16 $7.70 $9.24 $10.78
80% $5.28 $7.04 $8.80 $10.56 $12.32
90% $5.94 $7.92 $9.90 $11.88 $13.86
100% $6.60 $8.80 $11.00 $13.20 $15.40

According to our analysis, the average CPM that can be expected from YouTube videos is between $0.50 and $5.00. That means that for every 1 million views of your videos, you can expect to make between $500 and $5,000.

A lot of the YouTube “stars” work very hard just to generate enough to scrape by. Olga Kay, who stars on five YouTube channels that have close to 1 million subscribers, estimates that she’s made between $100,000 and $130,000 in each of the past few years. That’s a nice living, but may seem modest given the success she’s had in building an audience.

Reasons For Optimism

Now that we’ve highlighted the very real and significant challenges facing YouTubers, here are a few positives:

  • There are several YouTube success stories, including many amateurs who started producing videos as little more than a hobby.
  • According to YouTube, “thousands” of channels are making six figures a year in revenue.
  • YouTube revenues are growing rapidly, and expected to continue climbing in coming years.
  • Advertisers are flocking to YouTube, meaning fill rates and CPMs will eventually rise. This is evidenced by a $100 million commitment from agencies DigitasLBi and Razorfish.
  • eMarketer estimates that digital brand spending will grow from $18 billion in 2013 to $31 billion in 2017, while direct response will climb from $25 billion to $32 billion over that period.

In other words, there are some factors working in favor of YouTube content creators. Plenty of amateurs have succeeded in making YouTube their primary source of income, and even more have managed to generate a secondary stream of revenue from online video.

YouTube will write more checks to content creators than ever before, and the number and size of those checks will increase for the foreseeable future.

Bottom Line

Getting rich from YouTube videos is a popular dream that is very rarely achieved. The extreme competition, low payouts, and often random chance associated with making a popular video means that the odds are stacked against anyone setting out to be the next big YouTube star.

But it’s definitely not impossible. The total revenue generated by YouTube partners is going to grow quite a bit in the next few years, and a chunk of that income will be claimed by amateur content creators who have interesting ideas an a determination to make their channel a success. If fame and mega fortune are not you aim but you would still like to monetize your YouTube channel, you should check out this course on Udemy: 10 Guaranteed Ways to Monetize Your Content on YouTube. Over 100 student have already enrolled on the course and seen amazing results.

 

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Comments

  1. Very, very well written article. A completely honest perspective on the actual situation on the ground which is really refreshing. I have a number of YouTube channels that I am looking to steadily grow over time. Currently I average about a $ for every 1,000 views. For the moment, my goal is to get to a stage where I am generating $100/day consistently or $3,000/month that would require about 100,000 daily / 3 million monthly views, give or take a little bit. It might seem daunting but with multiple channels it is actually not that tough!

  2. MonetizePros says:

    Thanks for your comment Vikram.

    Spread out over multiple channels I am sure you’ll get there one day!

    Best of luck.

  3. Great article. As Vikram pointed out it is good to keep a realistic and unbiased point of view when it comes to analysing the facts. I believe success is informing yourself and adapting to whatever new information may come. Some things like random chance do have a factor in determining the level of success, but unrelenting determination, the understanding of a market or target audience and a constructive response to criticism gives you a pretty solid chance at reaching the first step of success.

  4. You have a well written article and this is the problem with most beginners that they get little to no attention. But you don’t need a viral video to get famous as many gamers have proved. I believe anything can be acomplished if you work hard. Hard work can get you anywhere. Big youtubers nowadays worked extremely hard to get where they are now and produced good content.

  5. MonetizePros says:

    Hi Bob,
    Thank you for your comment.
    We agree that hard work is a very important key to success!

  6. The article is great.

    Although it provides some really detailed statistics, YouTube also takes into account the number of videos uploaded, meaning, if you upload 3 videos a day, YouTube is more likely to put you on the top of the list even if you don’t have that many subs/views. This was one of the contributing factors to PewDiePie.

  7. Thank you so much guys.

  8. @Zach The reason PewDiePie got popular is because he screams like a retard and spews unfunny shit. You seem to be forgetting that most of his fanbase is made up of 12 year olds or immature teenagers.

  9. Did anyone else notice that the bracket for 500k-1 million was missing as well as 8.39% points?

  10. Also when your channel has a lot of subscribers(at least 20k-30k… you may want to create a website, a blog and a merchandise shop(optional- ask for donations). Most of the successful You tubers earn 60% of their revenue from such things.

  11. Tony Tony says:

    The irony of it all is that people with a YouTube channel will discourage anyone from using a webcam to start their YouTube channel, warning that some people just won’t watch a webcam recording, but then you’ve got people who start out with just a webcam skyrocketing into an overnight megabucks success and then you’ve got all these people who buy expensive cameras to do their YouTube recordings and end up earning squat. I think the overnight successes probably say, “If some people won’t watch my YouTube channel because I use a webcam, then who needs them?” Actress Kimberly J. Brown uses a webcam for most of her YouTube channel recordings, and she has no problem getting views. Of course, I guess I should not forget that she came to YouTube already with a fan base from the movies she did back in the 1990s and early 2000s.

  12. To get famous on YouTube if you are younger like me you have more time to become famous, but this does not mean it’ll be easy for you young-ones out there. I have personally recently created a video game commentating channel with (PEWDIEPIE) being my influence to do so and so far I have 60 views and 1 sub, this was actually very challenging and took 13 minutes. So me and my friend are hoping to team up with Wreck Fatal to make bo3 gaming and other steam gaming videos… However it will take extra money for the mic, gaming mouse, computer, camera etc…) so I have worked hard made some change and now am making gaming videos and I’m actually doing very well if you want to know my YouTube is. Thatchyflea Official

  13. I also want to start a youtube channel but i want to start something which noone has done on youtube or very litlle people are doing . Do suggest me

  14. I’m amazed at how much YouTube has changed. Years ago when I first started views and subs just happened. I built my channel up to 70k subs within a few months and it kept growing…but it ended up getting shutdown because I’m an idiot. I’m trying to rebuild it now and its a struggle. I have a few videos that had a few hundred thousand views on my old channel, posted on my new channel and none of them have broke 100 views. But its only been 2 weeks…. I think the best advice that I can give to people that are serious about it…. Succes is not going to happen over night and its not going to happen with 10 videos. You need to show that you can consistently create good content to give people a reason to subscribe. Network, collaborations with established creators helps get exposure. Create playlists…and most importantly, annotations. You wont get subs without asking for them. A “click here to subscribe” annotation will be a big help. Tags are important as well. Each tag is one more way your video will come up in a search.

  15. I am the next big thing of YouTube because I am great. *smiles. Anyway, the most important thing is ur mindset and Hardwork. Whatever u think u r is what u will become. When u work hard u prepared urself for the success. Do a lot of research to get to know what the business of YouTube is about.

    I am working on my Youtube channel. Doing the ground work before I launch it.

  16. Nintendo Thumb says:

    I run Nintendo Thumb; just started it up less than a year ago, and have managed to get almost 5 million views. I did it with a good strategy in mind before the channel even came into existence. I knew what I wanted to do, and I didn’t care what anyone else was doing. I went with the kinds of videos that I like to watch, gameplay videos without commentary, and I run with it hard once Super Mario Maker came out. I started publishing piles of videos at once, but quickly found that most of them get ignored, so, instead I scheduled it for a new video every hour every day. I quickly amassed thousands of videos this way, and though I’ve since slowed down to around 15 videos per day, it’s not going to take too long to reach 10,000 or even more in just a couple years. Each of those videos has a level name and a creator name; that’s 2 phrases, and lots of individual words and proper nouns. I’ve got over 5000 course videos on my channel, so that’s 10,000 different search terms that people search for on youtube or google (whether it’s video game related or not) and find my content. Also, along with putting out such a high number of user generated content, it means that a small percentage of those videos is likely to become a huge hit; like all of the Undertale levels I played. When you put out a lot of content, you’ve got a better chance of being seen, and you if things aren’t working out quite right you can tweak things here and there using all of the data that can be gotten from all of those videos.

  17. Daniele says:

    I agree with all of this. However, firstly as a beginner you can’t look at Youtube as something like a job to earn money, but as something fun to look to, this will make your videos created with more naturalness. Second, when (and if) you start getting a larger number of subscribers, you can’t except for Youtube to pay you, but you could join a partnership. There are a number of variety of partnerships, some of them are for people who are already famous but there are some who are there to help the smaller channels. You won’t be payed hundreds of thousands like the famous Youtubers but it will be a fun side hobby that you can earn from(besides most of them may advertise you). The big note is this: As a beginner you can never think about big money but only about having fun. When you get used to it and the videos become a better content you will start attracting more people, THEN you can maybe start thinking about money.

  18. I completely agree and dont think i will get famous i do game playthroughs because i love the games i play and want to share with others check me and my bro out crazycookie and lucky13

  19. Hello

    Most comments are funny as people are kids nowadays ..

    and also every single person wants to have a YouTube Chanel and gets rich …

    oh dear

  20. Grant Wilcox says:

    I love watching videos on you tube specially Ali a as he does videos On stuff I enjoy myself like cod (call of duty) and Pokemon go I would love to do my own channel but never feel I have enough confidence walking around talking to a camera with everyone around let alone people viewing it if anyone does of coarse

  21. BluGaming says:

    Most people do want to get rich and famous off of youtube as do i but the thing is that most small creator’s dont have patience as they expect to become famous instantly or over nigth after a couple of videos.Unlike them i plan to have Patience and hard work for my content and videos in the future and yes its hard but anyone can do it with hard work!

  22. Green Steam says:

    I think Im gonna delete my channel now….

  23. Honestly, I think why there are so many under-watched videos is because of not only the trending highlights as well as people giving up after the first couple of videos, and they probably aren’t trying to spread their channel around, and they’re just trying to get big on their own. Perhaps talking to friends, getting them to spread your channel around so that it gets noticed. Also, give it time, and keep uploading and it will grow. Slowly but surely.

  24. 99.9% of YouTubers are boring and talentless. This applies even to the “famous” ones making money. It seems all people want to do now is “reach out” to companies for free stuff (under the guise of reviewing a product) and get a P.O. Box and beg for people to send them free stuff. “Reaching out” is apparently a new way of saying BEGGING.

  25. the success fact to YouTube
    Y-yield your videos
    O-optimize your channel
    U-utilize your channel
    T-Talk to subsceibers
    U-unleash your strength
    B-build your auduence
    E-elevate your channel

    within months you would be counting your profits thanks….

  26. is there really and age to starting youtube because im 17 and im thinking about starting one over the next few months was gonna start one a few years ago but my mum wouldn’t let me.

  27. Brittany Bitch. says:

    I’m gonna go get rich & famous off this. Right Meow. <3. <3. Can't wait!! 😀

  28. It is important to adapt and learn as you go along. No one will know the answers right off the bat. If you stay persistent and keep your mind open to knowledge, you will steadily grow over time. It is also very helpful to have a sense of business.

  29. The whole problem with you tube, is that the way in which the search engine is configured means that, over all, there is a huge disconnect between quality of uploaded material, and resulting view numbers. It is hard to even comprehend how there are so many totally average videos with huge view numbers, and so many perfectly good videos with hardly any views at all. And no, marketing your videos a certain way will not override the simple fact that You Tube is the worlds greatest crap shoot. In a lot of ways, it is just not worth the effort, and in a lot of cases, even extreme persistence over very long periods of time have produced zero results on this platform.

  30. And most of the commonly quoted methods of increasing view numbers, very typically yield zero increase in view numbers. Put bluntly, chance and luck are by far the greatest contributing factors to you tube success.

  31. good job.

  32. One thing I’ve noticed if you’re not a very social person in real life, you won’t become popular on YouTube either. It’s not a platform for introverts. If you’re the bookish type who likes to keep to themselves and rarely interacts with people outside your comfort zone, don’t expect people to fall in love with you online.

    A lot of YouTube content creators appear very dumb in their videos. They dumb down the content so much. They have to explain everything like you do to a baby. The professional “dramas” on YouTube are often not well-thought-out, amateurish and plain silly. There’s a reason leading Hollywood entertainers went to Film School. It’s important to be tutored and skilled.

    I do watch a lot of YouTube but it’s mostly old movies, old TV shows and news content. I did enjoy a few funny YouTuber channels in the past, but I don’t find those jokes funny anymore.

    I do wish that there were a serious competitor to YouTube with a better interface. I hate Google’s monopoly.

  33. Great article! I started my channel “OhioJimbo” just to inform people of things to do in Ohio, and since have added a lot of content for Indian Motorcycles. I think it is time to spin off another channel “Jimdian” to showcase the Motorcycle rides.

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