Most YouTube creators make what they make as a labor of love. In almost all cases, the creators who stick with it and also grow, are the ones who have a passion for what they're doing, and have something they care about to make and share. There is a LOT of misinformation about how YouTubers make money, and how much they make. I’d like to take some time to discuss the ad revenue that are typical, and some comparisons to put that in perspective before talking about newer platforms (namely, Patreon).

First, a primer (skip to the next break if you’re familiar with the notion of CPM and want a minimum amount of my drivel). For those that don’t know, YouTuber content creators make money from YouTube through the ads that run against their content. Creators are eligible to begin running ads after 10,000 lifetime channel views and a manual channel review by YouTube (to help weed out the freebooters, trolls, spammers, etc).

When an ad runs before a video starts, or when a banner ad shows on the bottom or to the side of a video, the creators gets paid a certain amount, typically expressed as money made per 1,000 views, or CPM (cost per mille). YouToube takes a split of this revenue — 45% — and the creator gets the remainder — 55% — to be paid out when the sum is larger than $100 in their adsense account. Typical values for CPM may vary, but are usually in the $1–10 range.

I have found that a very good rule of thumb that can be applied with relative accuracy (through my own analytics, and discussions with other creators), that a creator tends to get about $1 for every 750 views (or roughly a CPM of $1.33 per 1,000 views). This number accounts for the fact that a large proportion of viewers use ad blockers, preventing ads from running at all on YouTube, and also that YouTube red subscribers contribute a higher CPM than the typical viewer (and YouTube Red could be a whole other post’s topic).

My own personal example of what this level of ad revenue actually means is this: My YouTube watch time is on the order of about a quarter million minutes watched monthly and has been for some time. If a movie theater holds about 250 people, and a feature length film is about 90 minutes long, my watch time is about equivalent to filling up 11 movie theaters for feature length films, and yet my ad revenue amounts to a bit more than a dollar daily.

Can you imagine a movie theater earning just $3 in profit from filling one of it’s theaters? That’s what your favorite creators are making for their (often prodigious) efforts from ad revenue alone on YouTube. This makes it clear why there is a need for alternate revenue streams.