The Economics Of YouTube Stardom

Economics of YouTube Stardom

There’s something you might know about YouTube stardom: Most YouTube stars make very little money. I just read an interesting story from Fusion’s Gaby Dunn, who digged deep into the economics of being a YouTube superstar.

Here’s what you need to know: YouTube superstardom doesn’t pay well. YouTube superstardom doesn’t pay well at all.

Making money from YouTube is tough...

Economics Of YouTube Stardom: The Economics Of Internet Celebrity

YouTube celebrities–the mostly teen and twentysomething on-screen personalities who create short videos with millions of viewers–occupy a strange place on the internet fame spectrum. They are their own writers, directors, and on-screen talent, and many of them are future Hollywood stars. But while their projects are viewed by tons of eyeballs, that doesn’t necessarily translate into money.

The new breed of YouTube celebrities makes money from three primary sources:

  1. Online advertising revenue shared through Google AdSense
  2. Brand endorsements and affiliate linking
  3. Secondary benefits such as increased visibility at acting auditions

However, Google AdSense revenue can be surprisingly low–even for YouTube’s biggest stars. Back in 2014, the New York Times’ Leslie Kaufman reported 1000 YouTube ad views will net a lonely $7.60 or so.

Adding to the budget crunch, many popular YouTube personalities belong to multi-channel networks (MCNs). MCNs are online television networks–you might have heard of some of the most popular like Tastemade and Fullscreen–which take care of much of the business, administrative, and promotional overhead for YouTube stars.

While they provide invaluable work for YouTube personalities (most of whom have day jobs), they also take a hefty commission for their work.

According to Dunn, who runs the YouTube channel Just Between Us with her partner Allison Raskin, this leads to some strange situations:

“Allison and I make money from ads that play before our videos, freelance writing and acting gigs, and brand deals on YouTube and Instagram. But it’s not enough to live, and its influx is unpredictable. Our channel exists in that YouTube no-man’s-land: Brands think we’re too small to sponsor, but fans think we’re too big for donations. I’ve never had more than a couple thousand dollars in my bank account at once. […] One week, I was stopped for photos six times while perusing comic books in downtown LA. The next week, I sat faceless in a room of 40 people vying for a menial courier job. I’ve walked a red carpet with $80 in my bank account. Popular YouTube musician Meghan Tonjes said she performed on Vidcon’s MainStage this year to screaming, crying fans without knowing whether she’d be able to afford groceries.”

Fans need to understand endorsements help pay the rent and the bills.

Economics Of YouTube Stardom: The Endorsement Issue

For many YouTube personalities, paid product endorsements are one of the main ways they pay the bills. These endorsements–which often show up on Instagram and Snapchat as well as on YouTube–are one of the easiest and most lucrative ways to make money on YouTube.

However, fans oftentimes criticize them. They feel that paid product endorsements on YouTube are “selling out,” without realizing that the people they are watching have to pay rent, pay the bills, and keep the lights on.

Dunn writes “Fans don’t want to see that you’re explicitly on the hustle. Whether they realize it or not, they dictate our every financial move. Every time Allison and I post a branded video—a YouTuber’s bread and butter—we make money but lose subscribers.”

This past October, YouTube added a new feature which lets creators more easily disclose their brand endorsement videos.

But there are ways to make money on YouTube.

The Economics Of YouTube Stardom: So What’s A YouTube Creator To Do?

If you’re looking for advice on how to make money from your YouTube presence, to further your career as a social media personality, and to understand the economy of internet celebrity, here are a few starter resources:

And last but not least, remember to keep reading Almost Millions and subscribe to our newsletter.  The goal of Almost Millions is simple: To make sure you have as much time as possible to work on the things that earn you money, and to make sure you know how to make money. I think we can all work together on that.