If you’ve spent any amount of time publishing video online, it’s likely you’ve heard about the YouTube Partner Program. The Partner Program gives YouTube video publishers the option to run ads on their videos in return for a cut of the ad revenue proceeds.
The question, of course, is, “How much?” The answer is not so simple. YouTube is notoriously secretive about how much it pays those enrolled in the Partner Program. It even requires that it be kept a secret in the Partner’s agreement. Unofficial user reports vary wildly from $0.80 to $2.50 USD for every 1,000 views. The more recent and reputable reports seem to place things on the lower side. This begs yet another question: Are ads the only way to monetize your YouTube channel?
Keep It Real for the Long Haul
Dave Urlakis, creator of the popular comedic YouTube channel Awkward Spaceship. says that despite several of his videos going viral — and one topping over 800,000 views — he has deliberately chosen not to enter the YouTube Partner Program.
“It doesn’t make sense financially to inconvenience my viewers with ads,” says Mr. Urlakis. “The amount of money I’d be making would not be enough to improve the quality of the videos or my own quality of life significantly,” he adds. Dave’s theory is that running ads early in the life of Awkward Spaceship may actually turn viewers away and stifle long-term growth for his channel.
By holding off on ads, he thinks he can get more exposure in these early days of his channel. “Some percentage of the audience will hate ads no matter what. I would much rather expose them to content now and build their trust than try to cash-in short-term,” Urlakis says.
In the longer term, Dave thinks he will eventually turn to the Partner Program once he starts seeing more consistent and larger views on his videos. In the meantime, he’s spending his time honing his craft and considering other options for a bigger payout, such as direct sponsorship and merchandising.
Dave Urlakis’ mindset is not unique. In fact, there are several success stories that have followed a similar path.
In 2007, an online video series entitled The Guild was started by actress Felicia Day as a passion project. Despite the show’s near instant popularity, finding a way to fund it was a problem. As a result, Day resorted to accepting PayPal donations to enable the show to go beyond a third episode.
Using the power of social media and word-of-mouth promotion, the show eventually caught the attention of Microsoft. The software company approached Felicia with a deal to make new episodes of The Guild available exclusively though the Xbox Live Marketplace for a limited time.
With its newfound audience and support from Microsoft, Ms. Day began to sell merchandise from the show, including DVDs, T-shirts, comic books and more. As of September 2011, the show reportedly had over 69 million collective views on its YouTube channel. It does not run pre-roll or in-stream ads even on its most popular videos.
Content deals and merchandising, while definitely more work than advertising, can yield a much greater return without having to inconvenience your audience. Companies like Zazzle make it easy to produce T-shirts and posters on demand and services like Shopify allow you to easily set up your own online store to sell merchandise.
While the story of The Guild certainly sounds appealing, not everyone on YouTube is producing comedic or episodic videos that lend themselves to merchandising or licensing deals. The truth is, there is no one-size-fits-all solution for monetizing your YouTube channel.
Perhaps the best approach is not to focus on monetizing to begin with. Instead, spend your time producing videos people will want to watch. Release them with consistency to develop a relationship with your audience. Once you have a large audience, the opportunities will likely follow.
Have you monetized your YouTube channel? Let us know what strategies worked best for you.
John Morrison: John is a freelance photographer, writer, and traveler based out of Chicago. He is a graduate of the Pratt Institute with a BA in Visual Communications. Before joining Sprout, John previously worked for Apple Inc. as a lead creative and business associate. He likes old Polaroid cameras, New York style pizza, and typing in the third person. Connect with him on Twitter: @localcelebrity