How to Monetise Your YouTube Channel in 2021
YouTube's highest earner last year made just shy of £22 million ($31 million). This is ridiculous. Especially as he's only 9 years old.
But it just goes to show that YouTube can be a brilliant way to make money. If a toy-loving kid can earn more than most professional footballers, I'm pretty sure we all have some skill or interest we can share with the world. And maybe profit from.
With over 2 billion monthly users, YouTube offers all creators a chance to find their audience and monetise their passion. So, whether you're a gamer, a baker, a prankster, or an overly enthusiastic productivity nerd like me, starting a YouTube channel (and taking it seriously) might be the best thing you ever do.
6 Ways to Make Money on YouTube
In June 2017, after finishing my fifth year at Cambridge, I decided it'd be a bit of fun to start a YouTube channel. As it turns out, this is by far one of the best decisions I've ever made. What had started out as an enjoyable part-time hobby now makes a ridiculous amount of money.
So what's the secret to my success? Other than luck, unfair advantages, and a large amount of privilege, I understood YouTube's potential as both a generator (through display ads) and a facilitator (via off-site earnings) for making money.
And while there are literally thousands of great ways to start making money on YouTube, I've found that the following 6 methods are the best place to start:
The YouTube Partner Program (YPP)
Community Earnings
From this list then, the only way we can directly "generate" money through our channel is the YPP. The other 5 methods are "facilitators", which require us to build an audience who know, like and trust us before we're able to make any decent amount of money from them.
So, there's no shortcut to success. We have to commit to consistently creating useful content over a long period of time - building a strong relationship with our audience - before we can monetise them effectively using the methods outlined below.
🎬 1. YouTube Partner Program (YPP)
Acceptance on to the YouTube Partner Program (YPP) lets us begin showing ads on our video content, and it's the simplest route to begin monetising our channel.
However, there are 2 requirements we've got to meet before qualifying for the program:
We need to have 4,000 public watch hours in the last 12 months AND
We need at least 1000 subscribers.
Once we've reached this threshold, connected our channel to Google AdSense, and met the relevant policies and guidelines, YouTube will review our application and invite us to run ads.
Having said that, this isn't a get-rich-quick scheme. It can take months to get to this point. In fact, I made 77 videos before I could turn monetisation on, which - truth be told - was a bit of a slog. I could've easily given up. And in 10 months I had made an admittedly pathetic total of £1.96 ($2.70).
But the wait was totally worth it. Over the next six months I made over £6,100 ($8,500) and this number has kept growing ever since.
In 2020, I made over £100,000 ($140,000) from AdSense.
How much can we expect to make from AdSense?
Broadly speaking, YouTube pays about £1-2 ($2) per 1000 views, but this number varies hugely based on watch time, the length of the video, and the type of content produced (which we'll talk about in a later article).
To account for this uncertainty, successful YouTubers recognise the huge potential of off-platform earnings. AdSense will only ever make up a small slice of their earnings, so getting sponsors or affiliates is a great place for them to level up their monetisation strategy and see their earnings soar.
👯 2. Sponsorships
Fuelled by the gradual decline in TV viewership in recent years, many businesses are turning to YouTubers to help them advertise their products and services. Usually this is done as a sponsored video.
Although sponsorship agreements can vary, they're usually straightforward - brands pay the creator a lump sum in exchange for a mention or product placement in an upcoming video. And, if they're feeling especially generous, they sometimes offer a bonus or a reward for additional video engagement or sales.
But landing a brand deal can take some time. My first sponsored video came one year after starting on YouTube. At the time, I'd created nearly 150 videos and had around 50,000 subscribers. So to begin with it's a real struggle.
Fortunately, after a couple of years of struggling to find sponsors, my friend Thomas Frank kindly introduced me to an agency, Standard, which I've been part of since October 2019 (and I'm now a co-owner of it!). Standard find new sponsors for me every month, and they've been a huge help in connecting me with some pretty awesome brands (such as Notion, Brilliant, Skillshare, and so on).
Now although I can't share exact figures here about my own sponsorship arrangements, in my video on How Much I Earned in 2020 I revealed my ballpark earnings from sponsors to be roughly £130,000 ($180,000) last year.
How much can we expect to make through sponsorships?
Grapevine Village have a great blog post on this. They explain that if we're a YouTuber and we want to land a brand deal with a business, we should charge £15-20 ($20-30) CPM (cost per mille). In other words, per 1000 video views we can expect to make between £15 and £20.
So if we normally get 100,000 views on a video, we should be charging £1500-2000 ($2000-$3000).However, this isn't a hard and fast rule, with the biggest YouTubers making well in excess of £70,000 ($100,000) per video. Not gonna lie, that's pretty insane.
🔥 3. Affiliates
Unlike sponsorships, affiliate income is something that we can start earning as a relatively new YouTuber, as long as we've built an audience who know, like, and trust us.
The idea is that certain companies are willing to provide a small commission for driving sales of their product or service. This is tracked using a unique identifier link (e.g. https://iqunix.store/?ac=ali) that's plugged in our content. So the more sales we rack up for them, the more money we ultimately make in return.
To begin with, we've got to start small.
Before I had any significant audience growth, I opted in to a few affiliate programs, like the Amazon affiliate marketing program. At this stage I was only making a few pennies each week, but as my audience grew, so did my earnings.
Having more subscribers means that people trust us enough to actually click the affiliate links, but it also adds weight to our recommendations. After all, we're probably more likely to listen to the recommendation of a friend than the recommendation of some shady-looking website. Pretty simple really.
Then once we've built our audience and our reputation, we can begin reaching out to bigger brands that offer larger commissions. And it's likely that just a handful of them will make us any significant amount of money. For me, that's been Paperlike, the IQUNIX keyboard, and Epidemic Sounds (yep, those are affiliate links lol).
In fact, in 2020 the affiliate income I made from my top 5 affiliate partnerships was greater than the money I made from AdSense (£130,000 vs. £100,000). It's a similar story for Nat Eliason. Just 4 of his affiliate programs account for 90-95% of the affiliate revenue for his site:
How much can we expect to make from affiliates?
The average affiliate commission rate sits around 5-25%, but that tells us very little about potential earnings. You see, it also depends on the price of the products we promote and the number of sales we expect to generate. Therefore, the following formula offers us a far more accurate way of answering this question:
Earnings = commission earned per sale x number of expected sales
⭕️ 4. Community Earnings
Once we've built a sizeable audience, it's possible to make decent amounts of money creating a community space for them to engage and interact with exclusive content.
One of the most popular methods of doing this is using Patreon.
Patreon is a membership platform that lets our fans become active participants in our work and discover behind-the-scenes content for a small monthly fee. Although there are other sites doing similar stuff (e.g. Buy Me a Coffee and Ko-fi), this site is probably the most popular for YouTubers.
For example, my friends Matt D'Avella and Hannah Witton both have Patreon accounts, with membership levels ranging from £3-10 ($4-11). Matt's Patreon gives you access to his 'Secret Podcast' and a slack community of like-minded self-development enthusiasts, while Hannah provides members with early video access, live streams, and a private discord server.The other method is to create a private community on a self-hosted platform. This is something that Ness Labs is doing really well. Their "community for thoughtful conversation" surpassed 2000 paying members and $9000 in monthly recurring revenue in February 2021, less than 12 months after its launch.
How much can we expect to earn from our community?
As Patreon is probably the easiest way to create a paying community, let's focus on that. There's an excellent blog post on this topic, but essentially if 1-5% of our fans become members paying an average of £5 ($7), it's not too hard to estimate potential earnings. With 30,000 followers, for instance, we're going to make somewhere between £200 and £1000 ($300-1500):
💻 5. Online Courses
There's been a large uptick in the number of people turning to online education in the previous 12 months. And smart creators have been capitalising on this by sharing their own knowledge through digital courses.
By building an audience who like and trust us, many of them are going to be interested in learning the skills and expertise we have developed along the way. Online courses are therefore a great way for us to teach our fans while making some money too.
I've found that there are two great ways to do this:
Skillshare classes
Self-hosted online courses
Live cohorts.
Skillshare is sort of like the Netflix of online courses. So Premium users pay something like £7/month ($10/month), giving them access to a huge range of videos to learn just about anything they want. Then if those users watch one of our courses, we'll get paid a few pennies for every minute they stick around. This really adds up over time.
As an example, in my first month of Skillshare in January 2020 I had one course and made a total of (£2200) $3100. Just 12 months later, in January 2021, I made a whopping £50,000 ($69,500).
But, the problem with Skillshare is that for a 3-hour (ish) class we're only going to get paid about $3-4 per student. So we're going to need a large number of people to watch our courses to make it worthwhile. This isn't easy when we're just starting out.
Instead, it may be better to create a self-hosted online course.
When we self-host courses, using something like Podia, we can charge a lot more. Plus, we can design the course and the landing page to look exactly like we want it to.
For example, I have a space on my own website where wannabe medics can access my online video courses for the UCAT, BMAT, and Interviews. By doing this, I'm able to charge about £100 ($140) per student. That's much more than on Skillshare.
Similarly, my friend Nat Eliason has a fantastic self-hosted course ("Effortless Output in Roam"). As does Tiago Forte ("Get Stuff Done Like a Boss"). They've got nicely branded websites, individualised pricing, and have complete control over their audience. Ideal for building trust and forging deeper relationships with their fans, while making some extra money.
Live cohorts
If we're confident that we can generate enough interest from our audience, we can create a live course. This is a big step and the holy grail of making money through courses. Even I was initially scared of the idea of charging money to run a live cohort, until David Perell and Tiago Forte reassured me that I'd enjoy it.
As a side note - Both of these guys have brilliant live courses of their own that you should check out: Write of Passage and Building a Second Brain (and yes, these are affiliate links too, of course).
So in November 2020 I launched the Part-Time YouTuber Academy. On the course, students learn how to grow their YouTube channel from 0 to 100,000+ subscribers and turn it into a sustainable, income-generating machine. I only expected about 5-10 people to sign up, but in the end we had 360 paying customers. And it became a really wholesome, lovely community.
The £220,000 ($310,000) in revenue was a nice bonus 😉.
How much can we expect to earn from online courses?
This is difficult to answer as it depends on many factors: how much we charge, the size of our audience, and the likely conversion rate. Although conversion rates for online courses are mostly determined by the amount our fans trust and like us, a conservative estimate would be 1-2%. From this, our expected earnings can be calculated as follows:
Revenue = Number of your Audience x Conversion Rate x Price of the Course
👕 6. Merchandise
The final method for making money through our YouTube channel is to sell merchandise (or 'merch' for short).
Creating and selling our own physical products is perhaps the most difficult method of monetising our creative work, as we need to find a manufacturer, design the product, market it, and so on. But, many content creators make it work.
For example, my friend Ruby Granger has a fantastic YouTube channel all about studying, and she also runs a small online store called Pumpkin Productivity. By building a YouTube audience of (mostly) students, she's been able to seamlessly promote academic essentials to them and make a healthy side-income for herself.
I've been thinking about selling stuff too - perhaps some sort of productivity journal - but I've found it to be a lot of effort for the expected returns. So, for the minute, it's in my maybe pile.
How much can you expect to earn from selling merchandise?
To make this profitable we need to, both, sell a lot and minimise the cost of production. And without a big audience and a large upfront investment, this is tricky.
But if we really wanted to give it a go, the average YouTuber with approximately 10,000 subscribers can expect to sell 6 products each month. That's about $70 (☹️).
So there we have it. The earning potential on YouTube is massive, and there's much more we can do than running a few ads. Monetising our channels effectively also means running courses, working with sponsors and affiliates, and growing membership communities. It means thinking outside the box and trying out new things.
The most crucial element, however, is enjoying ourselves and staying consistent. I started this journey as a Cambridge medical student and a junior doctor who just wanted to help people to study better. It wasn't about the money.
The money was a by-product of having fun and putting in the work.
Never in a million years did I expect to be making this much through YouTube, but by using these 6 methods (and signing up for the next cohort of the PTYA 😉), there's no reason why you can't do the same.
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