How does a video streaming service with one billion active users per month and $4 billion in revenue not turn a profit? Ask YouTube, which couldn't break free from breaking even in 2014, according to a new report. Sources tell the Wall Street Journal that Google's video unit posted $4 billion in revenue last year, up from $3 billion in 2013, and that while the service accounted for 6 percent of Google's overall sales, it contributed nothing to earnings.
The great thing about sponsorships is that you don’t have to give YouTube a cut. Plus, you can negotiate whatever contracts you want based on impressions and the size of your audience. In most cases, the amount of revenue you generate from sponsorships is substantially more than YouTube ad revenue. (Meanwhile, you can still generate ad revenue. So it’s like having two sources of income from the same video.)
Observers speculate Google has sought streaming rights to on-demand TV shows and movies to bolster YouTube Red, its new subscription service. Some media reports suggest Google could go a step further and buy rights to live TV channels, making it a more direct foe of pay TV providers such as Comcast (CMCSA), AT&T (T) and Verizon Communications (VZ). Google is usually mentioned when broadcasting rights to major sports are up for grabs.
In re: your second point, getting users to pay for content is absolutely part of the equation, but not the entire equation. The whole other half of it is creating ways to minimize the cut a middleman takes such that even if it’s zero sum game, more of the sum is going to the content creators, as well as developing new revenue streams that don’t require a direct cost from users to give direct profit to content creators.
For people who dream of making money on YouTube, there are lots of online celebrities and channels to aspire to imitate. There's makeup superstar James Charles, who became the first male CoverGirl model. Liza Koshy's fame on Vine and then YouTube has led to traditional film and TV gigs, including a role in a Tyler Perry film. Even pop star Justin Bieber got his start on YouTube. According to YouTube, the number of channels that earned five figures or more grew by more than 50 percent from July 2017 to July 2018. Channels earning six figures per year increased by 40 percent.
YouTube, just like marketing, is evolving. What once used to be a platform for amateur videographers is now more than one billion active users strong. Marketers are learning that YouTube is a powerful tool; in fact, the 2017 State of Inbound report shows that 48% of all marketers plan to add YouTube as a content distribution channel in the next 12 months. Video isn’t just a passing trend, either: nearly 87% of marketers use video for content marketing campaigns, and Cisco predicts that 80% of all internet traffic will be streaming videos by 2019. The need for marketers to use video to reach their audiences is more critical now than ever before.
One of the main ways you can take advantage of this feature is by creating a channel trailer. A channel trailer is the video version of your description and is shown to all your unsubscribed viewers. Your trailer should be short and sweet (around 30 to 60 seconds). Focus on showing visitors what your channel is about, what they can expect to see, and encourage them to subscribe. Your trailer won’t be interrupted by ads, keeping the user focused on why they should watch more videos from your brand.