How To Make A Passive Income With YouTube

Today’s side hustle has the potential to make you a celebrity in at least a specific field, if not a known name the world over. There are some who have made multimillion-dollar businesses out of their YouTube channel and they convert it as their online income.

It’s virtually impossible to tell what will be a hit and what will disappear into the obscurity of millions of other channels. Many of those earning the big bucks say that they started their channel as just a fun creative outlet. However, there’s also no shortage of people who went into it hoping to generate a modest monthly income from a small catalogue of well-made videos and succeeded.

TL;DR

• Free – there is no cost to starting a YouTube channel or post content
• iPhone – you can theoretically start creating videos with just a smartphone
• Passive Income – the right kind of content can bring in long-term income, with no additional work
• Technical – you will need to learn video editing to succeed
• Competitive – it’s a competitive market, but you can stand out by being unique or picking the right niche
• High Effort – it can take a bit of time and effort to get started but every video that gets traction is a potential passive income entity

What Is YouTube Advertising and How Do You Leverage It To Make Money?

YouTube has been a source of ‘internet fame’ – and income – since shortly after the platform first launched in 2005. While not originally designed as one, it has effectively become one of the more successful social media, as well as the second most popular search engine after Google (which owns YouTube). With no shortage of success stories, ‘YouTuber’ has become a legitimate job title.

The process of making money on YouTube is simple in theory, though challenging in practise. All you have to do is create and publish videos, get plenty of people watching them and earn money through adverts that YouTube automatically applies to your content.

If you’ve ever watched a video on YouTube (which, thanks to its immense popularity, it’s statistically probable that you have), you’ll know adverts as those irritating distractions during your viewing. At best, they’re a little box of inane text that shows up at the bottom of the screen, turning translucent after a short time and disappearing entirely after a minute or so. At their worst, they’re unskippable 15-second clips or longer videos you can choose to skip after about 5 seconds.

As a viewer, you’re probably getting tired of the fact that YouTube is pushing increasingly more adverts into every video – often two at the start, two at the end and even some in the middle of longer videos. As a content creator, you’ll wish there were more. Each time one gets played on your video, you make more money.

However, there are alternatives. Many channels will tell their regular viewers that they don’t actually make a huge amount of money directly from YouTube and some go so far as to intentionally switch off monetisation, preferring to generate income in other ways. These other ways include:

– Affiliate links – promoting a company in the video and including a link to them in the description text underneath. The creator gets paid for every click on the link or for every person that buys the company’s product through that link or using a special discount code.

– Sponsorship – companies paying content creators directly to mention or recommend their product.

– Donations – asking viewers to fund the creation of more videos, often through platforms like Patreon.

–Merchandise – selling custom-made clothing and items.

As with most content-based side hustles and passive income streams, there’s a chance of making insanely huge profits, but that chance is extremely slim. If I say the name “PewDiePie”, you’ve probably at least heard of him, even if you don’t know exactly who he is. In 2016, he made $15 million as a YouTuber, making him the platform’s highest earner for that year. However, he is one among about 31 million channels, and a 2017 study found that 90% of the views (and, therefore, the ad revenues) go to just 3% of YouTubers.

However, also like other content-based approaches, it’s possible to create a passive income stream that can give you a small but consistent trickle of income for no extra effort. Another study found that the advertising revenue for the average YouTuber amounts to about $16,800 per year – not enough to live on, but a nice bump to your annual income. Make the right sorts of video – the type that remains permanently relevant and interesting – and you could see a good return on a relatively small amount of work over time.

How To Get Started With YouTube

If you want to make money out of YouTube, you first need to decide what content to make. There’s no shortage of options, but it’s worth noting that some genres are heavily oversaturated with experienced creators. It’s still possible to stand out by doing something original, but your chances of success are severely reduced.

When it comes to picking your niche, there are two things that are vitally important to remember:

1. Whatever you choose to do is going to take up a huge amount of your free time.

2. YouTube is the second most popular search engine, after Google.

Between them, these points will direct you to the type of content that is best for you to produce. Firstly, it should be something that really lights you up – that you are interested in and excited by. If it isn’t, you’ll find that you get very bored of it very quickly. There’s also the fact that audiences will resonate far better with someone who is genuinely excited by what they’re doing, giving you an edge against those who are just doing what they think will make them the most money.

The second point is especially important for those who want YouTube to be a source of passive income. Think about choosing what content to create in the same way you would think about what blog post to write to improve a website’s SEO. You want to create content that will answer a question that a lot of people are asking. Each time they ask Google or YouTube that question, your answer has a chance of being on the front page of their search results, potentially giving you another view and another fraction of a dollar in ad revenues.

Of course, YouTubers creating video guides are rarely counted among the platform’s big earners. Commentary on current affairs or video game footage make a lot of money quickly, but they also age rapidly, losing their earning potential within a week or two at most – often a lot less. At the same time, how-to guides are not guaranteed easy wins either, especially those on topics that have already been heavily covered by other creators. As with blog posts, if your video is not clear, simple, engaging and entertaining, it won’t succeed.

So, now that you know what content you’re going to make. It’s time to make it. This process can take various forms depending on the type of content you end up doing. Some are simpler than others and require little additional equipment to create, but most need at least a good camera and video editing software. Fortunately, modern smartphones and mid-range prosumer cameras are capable of recording good-enough footage and audio while basic editing software is easy to find for free – Windows Movie Maker or iMovie, for example.

While entry-level software simplifies the process considerably, a lot of YouTubers find video editing to be the biggest and hardest part of their job. It can be tedious, time-consuming and complex, even for experienced content creators. Additionally, handling big video files puts a lot of strain on your computer’s processor and they take up a lot of hard drive space, so you might need to upgrade your system to handle it.

The process of actually making a successful video is far too big of a topic to cover here, and will be notably different for each style and subject of video. It’s certainly worth investing the time and money in courses on editing, visual storytelling and digital marketing to increase your chances of success. It’s worth noting here that high-quality content tends to win over high volume. Given the option of rushing out two sub-par videos or putting twice the time into making one video perfect, the latter will give you better returns in the end.

However, the best video in the world still won’t be earning you any money until you reach YouTube’s minimum requirements for them to start showing adverts on your content.

These are:

– A minimum of 1,000 subscribers

– At least 4,000 hours of watch time within a year

– Both of the above numbers reached within a single 12-month period

This is quite a tall order, so you will have to put a lot of work in early on, potentially asking friends and friends of friends to subscribe and watch your videos over and over again. However, at the end of the day, the best way to build an audience is exactly the same on YouTube as it is on all social media – provide good content and engage with your audience.

Things to Consider when creating a YouTube Channel

Making money from a YouTube channel takes quite a significant amount of skill and time. As sources of passive income go, it’s front-loaded with work and doesn’t guarantee a return on the time invested, so it’s potentially a bit of a gamble. As a side hustle, the amount of work involved in filming, editing and releasing regular content in order to stand even a faint hope of making enough money back to justify the effort means that it may end up becoming your main hustle.

While it is possible to make big wins and eight-figure earnings from YouTube, the odds of doing so are extremely long. Most of those who succeed do so because they follow their passion. Some get lucky or their sheer perseverance carries them through, but many fail. On the other hand, there are plenty who succeed in generating a five-figure passive income by picking the right niche and making good content, which is no small achievement.

It’s important to remember that the fun bits of making videos – the filming, especially – are a tiny fraction of the amount of work you’ll have to do. If you don’t learn to love editing, you’ll soon find the hustle becomes a grind.

Finally, bear in mind that YouTube ad revenue is probably the smallest potential source of income available from posting videos on the platform. It’s also the most inconsistent, with YouTube’s adverting policies and algorithms regularly changing. It’s well worth considering alternative incomes you can generate with your YouTube channel.

How Much Does It Cost To Get Started On YouTube?

You can post content onto YouTube with a standard Google account and there is no fee for doing so. Additionally, you can record footage with either screen-capture software or a smartphone, so the equipment costs to get started are also negligible. In theory, you could start your channel for free. However, if you want to up your content creating game (and, if you plan on making a success of it, you absolutely do), you may need to invest in better video editing software, a computer that’s powerful enough to run it, a better camera, high-end audio recording equipment, tripods, backdrops, lights and plenty of other expensive kit. However, exactly what you need (and how much it’ll cost you) will depend entirely on the type of content you plan on making.

Learn more about setting up a YouTube channel and making money from YouTube Advertising

If you are interested in learning more about creating video content and earning through YouTube’s advertiser program check out these links:

YouTube Channel – step by step guide to creating your first YouTube Channel

Tubics – unlock your YouTube SEO and watch your views soar

(The above link will take you to a marketplace called AppSumo, where you can save more than $200 a year on the price of Tubics – well worth it)

Easy YouTube $’s – learn how to make money on YouTube without even creating a video!