How to Earn Passive Income / Money on YouTube

YouTube. It’s a behemoth to be reckoned with. It has become as common-place in our everyday lives as Google, the interwebs and the TV. You’ve heard the mind-blowing statistics, right? “There are over a billion users!” and “Over 300 hours of video are uploaded every minute!” and “YouTube gets billions of views every day!”, and many more. There’s no denying that YouTube is a media giant and shows no signs of slowing down.

For some, however, YouTube is way more than a fun place to waste some time and watch insanely wealthy 25-year-old Swedish gamers play every video game on the planet. Most of those sleep-inducing gamers are using YouTube as a regular source of income and not just any income, but passive income! I’m not a gamer and I don’t have a soothing accented voice to narrate the opening of every children’s toy on Earth, but I do make YouTube videos. And it pays. Last month, for example, I earned over $700 on YouTube and did literally nothing during that month to earn it. It’s all from videos I made in the past (please subscribe!). Let’s talk about what goes into making moolah on YouTube.

HOW/WHY DOES YOUTUBE PAY YOU?

Like most content-oriented websites, YouTube only makes money if it gets views and clicks. In short, when you make a video that gets views and clicks, YouTube earns money and gives you a cut.

You’ve seen the ads all over YouTube, right? They come in the form of images, commercials and banner overlays, like these:

Advertisers pay to have those ads in front of your video-meandering eyes. Let’s say, for example, that Acme Company (you know, the guys from the Road Runner cartoons) pays Google/YouTube $1 every time somebody clicks on their ad. When a person clicks on the ad near/on one of your videos (as long as you’ve monetized your video), Google gives you 55¢ (55% of the commission). With any luck, Acme sells a pair of rocket-powered roller skates.

The rules for the pre-video commercials may vary (paid for watching the whole commercial vs paid for clicking on the commercial) but the idea is the same. Viewers click on an ad that shows on/around your video and you make money. If you can get people to watch your videos and, more importantly, to generate the clicks, you’ll start earning.

HOW MUCH WILL I EARN?

It depends. Let’s look at a real-life example. In the first six months of 2015, I had1,037,664 views on all of my videos combined. It’s important to note that YouTube doesn’t show how many clicks I had – just views. In that time, I earned $3,322.12from YouTube. If you break that down, it means I’m getting about $3.30 per 1000 views. That’s just the average, though. How much I make depends on several factors.

Payout Factors

• How likely are people to click on the ads around your video?
• How much are advertisers paying for each click?
• Are viewers even seeing ads when watching your video? (Facebook vs YouTube)
• How many viewers do you have?
• Subscriber count

Here’s a side by side comparison of two of my videos that have very different earnings even though they both got a decent amount of views. The columns are:Video – Views – Minutes Watched – Earnings.

Wait – what? The first video earned $75 but had 133k views while the second earned $300 with only 86k views!? Why are they so different? Simple. The Baby Birds Founds in Grass – Rescued video became popular because of Facebook. YouTube’s analytics are pretty handy and showed me that the source of most of the views was from Facebook Shares. Facebook is awesome for getting views on the video but when it’s shared on Facebook, guess how many YouTube ads there are for people to click on? That’s right. None.

The How to Fix / Repair the Hook Timing on a Sewing Machine video received nearly all of its views on YouTube, where all of the ads are present. It also may have had product-related ads that were more likely to be clicked on.

Let’s do a bit more math and see what the earnings per 1,000 views is on these two videos.

Baby Birds: $75 earnings / 133 (133k views) =  $0.56 per 1,000 views

Sewing Machine: $300 earnings / 86 (86,000 views) = $3.48 per 1,000 views

You can see that having a viral video that gets shared off of YouTube is much less likely to earn you money when compared to a video that is primarily watched onYouTube. While there are some factors that are beyond your control, the type of video and its intended audience play key roles in revenues. If you create videos that are less of a quick-watch viral type, and more of an informative or engaging type video, then they’ll likely be watched on YouTube and, therefore, earn you some money. Think about the kinds of videos you watch via social media or via third-party websites as opposed to those you watch on YouTube.com.

WHAT KINDS OF VIDEOS SHOULD I MAKE… AND HOW?

Everyone has something to share. A talent, a story, a sense of humor or a skill. Heck, the lack of these things has not stopped some people from earning boat loads on YouTube. My advice in this area is simple: Record what interests you. For me, I like DIY stuff and home improvement projects, so that’s what most of my videos are about. If I’m doing something that I think would be helpful or informative to others, I record it. I have a friend that makes science videos and another friend that makes videos about his twin toddlers. They’ve both done well on YouTube. If you think about the fact that “every day people watch HUNDREDS OF MILLIONS OF HOURS” [emphasis added] on YouTube, there’re bound to be people out there that want to watch what you create.

Need some inspiration? Just do some searches on YouTube for things you like and see what the aut0-suggestion is. See how many results each search has and try to identify niches that need filling. So that’s the what; now let’s talk about the how.

 

Making videos absolutely does not have to be a major production. Start simple. My brother-in-law called me up the other day because he was going to install one of those sinks that sits on the counter (vessel sinks, apparently) and thought he’d make a video about it because the one he watched was kind of terrible. I encouraged him to do the following:

1. Use the camera you have. If your best video camera is your smart phone, use your smart phone. If you have a decent camcorder, use it. If you’re fortunate enough to have a DSLR that shoots video, use that. It doesn’t matter all that much so long as you get started. If you like it, you can get a nicer camera.
2. Use some simple video editing software. I made all of my original videos with iMovie, which is great for most people’s needs. Windows Movie Maker will work just great too. Even without a computer, you can shoot and edit video right on your phone. There are lots of apps for Android, iOS and other OSes that allow you to edit video on your phone, and you can even upload directly from your phone to YouTube. If you simply cannot get your hands on an editor, you can always just upload raw video from your phone to YouTube.
3. Upload it. Once your video is ready, you can go to the YouTube upload page to put it on the web. If you’re uploading from iMovie, the YouTube mobile app or other enabled programs/apps, you may be able to upload directly within the app as long as you’re signed in.
4. Monetize it. You won’t make a penny if you don’t monetize your video. YouTube’s interface changes all the time but here’s the gist of it:
   1. Go to the account settings page
   2. Look for the ‘Monetization’ tab and click on it
   3. Click ‘Enable My Account’ and follow the steps listed there. There’s an option to set all of your videos to default to monetized, which I’d recommend enabling.
   4. Once your video is monetized, you should see the happy green dollar sign in the video manager, like so:
      

SOME CONSIDERATIONS

OK, so you have grand plans of world domination via YouTube. Awesome. Before you get too excited, however, consider the following.

• Plan before you act. Think about what your channel should be named and whether you should create a new channel for your new  idea. I regret not having done this so my personal videos are mixed in with my public videos.
• Decide what kinds of videos you’ll likely be uploading. If you have a theme and can stick to it, it’ll keep your channel’s subscribers happier. Have very disparate ideas? No problem – just create more than one channel.
• Think about how you’ll make money and if you’ll want to leave time to talk about requesting subscribers/donations/support at the end of each video. Subscribers are gold on YouTube. Ask people to subscribe and make it easy for them to do so. Also, show them related videos so they’ll want to keep clicking. Remember: more clicks = more money.
• Interact! If you’re getting comments, be a part of the conversation. People who interact with their viewers are much more likely to have return viewers and subscribers.
• Assume every video will be wildly successful. If I had known when I made my first how-to video that it would get hundreds of thousands of views, I would have done things differently. Think about what information you’d like (or not like) in your video as well as the items mentioned above.
• Have fun! If you’re not having fun making the videos, do something you like. Even if you don’t love editing or other aspects, at least have fun doing what you love.
• Be patient. Don’t expect a million views the first day. Also, don’t expect a pay check immediately. YouTube only transfers money to your bank account when you have earned $100 or more. For reference, here’s a look at my YouTube lifetime earnings. It took a while before anything happened, but once it did, it took off nicely. Don’t mind the decline at the end – it’s because I’m showing a monthly view and we’re only 9 days into the current month.
  

YouTube is an amazing resource for earning passive income. Every day I count my self extremely blessed to be able to make money from it. I’m a bit obsessive about checking how much money I made two days ago (YouTube’s earnings reports are always at least two days behind) and I love calculating my projected monthly earnings based on what I’ve earned so far in a given month. It’s like my personal stock market, except it never crashes.

Do you have questions? Leave a comment and I’ll be happy to help. Thanks for reading!