How To Start A YouTube Business

8th September 2017 No comments
How To Start A YouTube Business

People watch 1 billion hours of YouTube per day

According to TechCrunch, “people now watch 1 billion hours of YouTube per day”. The videos being consumed within those billion hours are made by the likes of PewDiePie, who earns over $15 million per year from producing YouTube videos. For any entrepreneurially minded person, you’re bound to ask yourself the question “How can I get a piece of that?”

If you’re a subject matter expert, or simply have a deep passion for a topic or area of interest, regularly producing several short vlog style videos per month should be easy, and that ad revenue should start racking up. All you need is a camera and a Google account to get going, then you’ll be laughing all the way to the bank… right?

The realities of relying on ad revenue to build a business

The reality is that creating a business with YouTube’s monetisation features is extremely difficult. Because YouTube monetisation is based on ads, you’re only going to start making money when you’re receiving lots of views. By “lots of views” I mean tens of thousands of views, on multiple videos, and you’ll need to be releasing new videos regularly.

Building a sustainable YouTube business requires building a solid fanbase for your YouTube channel. This means playing the game fully by including “Like and Subscribe” calls to action into your videos, and actively engaging in conversations in the comments section of your Youtube video page.

I’ve seen this happen successfully on a few YouTube channels I’ve personally worked on, including one that does car reviews. However, you’re going to need a unique selling point for your channel that differentiates it from the other content producers who operating within the same niche. Why should viewers give you their time if they can get the same thing from the channels they’re already subscribed to?

With Life On Unleaded our USP was producing high quality videos that were similar to what our viewers were seeing on TV shows like Top Gear. Our most popular video reached 1.7 million views. Although I look back and shake my head at the quality of some of the camera work (I was still a student), at the time we were largely competing against amateur videographers who were filming with their phones, improvising their reviews, and also older than us. As young people ourselves we were able to hit a younger demographic, especially with the humour. We managed to fill a gap in the market.

Yet even then, the reason our channel slowed down (and why I ultimately stopped working on it) was because the cost of producing videos to the standard our audience expected far outweighed the money we received from the ad revenue. The videos that got the most views took weeks to produce and cost a small fortune in insurance and fuel alone. The easier to produce content received a fraction of the views and therefore generated a fraction of the revenue.

My advice from this experience is that, if you want to make a living from creating videos, it would be better to consider your YouTube channel as just one aspect of your business. You should be using YouTube for building a following as their social features make it easy for people to discover your content organically, but you should look at supplementing your ad revenue with additional sources of income.

Finding additional sources of income that complement your YouTube channel

The key to growing a content production business is finding high value recurring revenue. You don’t want to be earning $0.01 for every 100 views you get on your video; instead you’ll want to find ways to turn those 100 viewers into people who will each be willing to pay you $1 or more per month just to be able to watch your videos in the first place.

While you could look at using a service like Patreon to effectively ask your audience for money, I would argue that there are two issues with this. The first is that Patreon is anotherservice that your audience has to sign up to and interact with just to reach your brand. Ultimately you want to build your own brand, not that of Patreon – or even YouTube for that matter. The second issue is that you have to create incentives in order for people to give you money. Common incentives I’ve seen are exclusive community groups on services like Slack, member-only newsletters, and chances to suggest ideas for future content. All of these seem like additional responsibilities that could detract from your ability to make great video content in the way that you want to make it.

One of the simplest business models to adopt is producing exclusive content for people who pay a subscription fee. Many content driven businesses are moving towards this model, including the likes of Gimlet Media, creators of podcasts like Start Up and ReplyAll, who offer a membership subscription for access to podcast episodes before they’re released.

This approach doesn’t necessarily require any more work in addition to what you’re already doing for the general fanbase as you should already have your production workflows figured out. It may a case of spending a bit of extra time producing some exclusive content for your members while you’re preparing your standard public content, but often you can start out a subscription model by simply sharing content privately for a set period before it goes out to the general public (where you’ll earn additional revenue via ads).

Another benefit of adopting a subscription model is that it doesn’t require branching out into a different area of expertise, such as producing merchandise, which is riskier and can be costly. A subscription is guaranteed recurring revenue based on the product you’re already producing. (Recurring being the key word – most people won’t buy the same shirt twice.)


If this is all sounding like hard work, without a clear path to success, then that’s because it should!

The answer to the question of how to start your own YouTube business is the same as answering the question of how to start any business. The answer? With a lot of determination, drive and persistence. Running a business isn’t easy, but services like YouTube and Patreon make it much easier to start a business than ever before. If you have a good idea and you work hard, there’s no reason why it can’t succeed.

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