YouTube Monetization Strategies — Full Breakdown & Transcript

[00:00] So when it came to YouTube, I was like, okay, cool, AdSense will make money, but we need to eat as well. And if that goes down, what do we do? When growing a YouTube channel, let's be honest.

[00:12] The majority of us focus on getting views, going viral, and increasing subscriber counts more than anything else. It's the natural focus point, and it's important to build an audience for our future content. However, the real winners on YouTube over the last few years don't just focus on building a channel.

[00:28] They also build a business. Peter McKinnon definitely falls into this category and in this video I'm going to take a closer look at the factors that helped him turn his passion into a million dollar YouTube

[00:40] business. It's been over two years now since I made my first video on Peter McKinnon where I analysed the techniques he was using to grow his first 1 million subscribers.

[00:55] During that time a lot has changed in the world but Peter McKinnon is still growing on YouTube. He is just about to hit 4 million subscribers to be exact. The point of that video was to show how Peter was building his YouTube audience but the

[01:09] spotlight today is on how he monetizes that audience in a lucrative but honest fashion. Now before anyone accuses me of calling Peter a sellout, that is simply not the case here.

[01:21] puts his audience and content first and it's clear he loves what he does. However, I think we need to change our perception of YouTube as purely a passion project for creators. Yes, you need to love the act of creating videos for your fans, that's always the first

[01:36] priority, and it's very clear when someone doesn't and it's just doing it for financial gain. However, if someone is willing to sacrifice hours upon hours filming, editing videos and growing a YouTube channel, I think it's only fair this hard work is rewarded. And it's

[01:50] It's not like YouTubers are given a monthly paycheck from Google. To make a career on this platform you need to have a strong business mind. There are multiple ways YouTubers can turn their passion into a high earning career without being a money grabber exploiting their

[02:03] audience. Now that's not to say that sellouts don't exist. The sad reality is there are plenty of creators at the very top of YouTube that try to make every cent out of their channel and sacrifice integrity and general models to do so. I'm not going to name any names

[02:18] but we all know they exist. Pfft, Jake Cotten. Sorry, I think I have a bad cold. So, I hope this video will be a case study into how to effectively monetise a YouTube channel while keeping the audience the number one priority.

[02:31] Let's get straight into things. The first business lesson from Peter McKinnon is to build multiple streams of income around your YouTube channel. If you've ever heard a financial advisor speak, they talk about diversifying your investments

[02:46] so that if one fails you have enough backup to be safe and grow your money. The same concept can be applied to how you monetize your YouTube channel. The natural income stream we gravitate towards on YouTube is AdSense, but this has led to

[02:58] a real over-reliance. The truth is AdSense is unpredictable. We seen the adpocalypse in the past with entire channels demonetized in the blink of an eye While it can be a great source of revenue YouTubers like Peter McKinnon realize how important it is to diversify Take a listen to what the man himself had to say about it on a recent podcast appearance

[03:18] Recognize that? Yeah, recognize that. Everyone's like, okay, the key to this is multiple streams of revenue. Have things running in the background that are going to make me money when I'm sleeping. In case one goes down, this is still going. If three go down, that's still going.

[03:30] and I've been doing that so to back up what he's saying let's list his income streams I may need to be missing out on one here so please comment if I have number one is of course Adsense Peter brings in about 10 million views every

[03:45] month for this channel with an estimated average CPM of $4 this will be bringing in roughly $40,000 a month number two video sponsorships these are quite

[03:57] regularly works with brands he believes in and uses themselves. From my knowledge of YouTube brand years I'd estimate each brand he does to bring in over the 10k mark and some could be even more. Number three affiliate links in the description

[04:09] of his videos. Peter has an endless list of the gear he uses in his video description with affiliate links mainly to Amazon and while it's impossible to track the exact amount of money he's making through these links getting even a small commission on some of his expensive camera gear definitely adds up. Number

[04:25] Number 4 is Digital Products. Peter of course sells his own digital products in the form of Adobe Crete Lux packs, sound effects and more. We'll be talking more about this revenue source a bit later on in the video so stay tuned for that.

[04:39] And finally number 5 is Merchandise. Peter has a pretty low key merchandise line that his biggest supporters can buy to rep his brand. So Peter has 5 main sources of income on YouTube. If AdSense goes under he still has 4 of the solid streams to rely on. It's

[04:54] The simple concepts which you would be amazed at how many YouTubers build a channel around one stream of income and then die out when something inevitably happens. Don't let this happen to you. So what can you as a small YouTuber do with this information?

[05:07] While audience growth and focusing on creating the best possible content should always be the priority, a shift in mentality from the start is important if you intend to pursue YouTube as a career path. Make a list of ways you can monetize your audience, see how many income streams you

[05:22] can generate and almost act as if AdSense doesn't exist. If it didn't, how would you build and modify your channel? It's a really good exercise to suss out the business opportunity behind your channel. I like to practice what I preach so you can bet I'm not going to just remind AdSense for

[05:38] this video. I have an affiliate link down below in the description to sign up for Epidemic Sound for free. Epidemic Sound is the best music and sound effects library out there for YouTubers. My favourite thing about it is it's basically a Spotify or Apple Music for creators.

[05:52] You can browse through songs or sound effects, save them to your library and download them directly to use for your video whenever you need them. It's used by many big YouTubers including of course Peter McKinnon and staff.

[06:04] Sign up for your free trial today using the links below. The second business lesson from Peter is going to be a really quick follow on from the multiple income streams and that is his positioning within YouTube aka the niche he occupies both in the eyes of the viewers and in the eyes of the advertisers In my first video about Peter I talked about how he started off doing vlog format content

[06:29] then he realised that by making longer form tutorial videos he could open his channel up to more people and more business opportunities. Think about this, Peter is in the photography and videography niche on YouTube.

[06:41] Most products within this niche are marketed to people trying to make their own videos or photos better and potentially carve out a career for themselves in this space. So when Peter transitioned from personal vlogs to in-depth tutorial videos he opened up so

[06:55] many more business opportunities for himself. He has an audience of aspiring creators whose brands will pay premium prices to advertise to. If he was still making broad format videos as the focal point of his channel he would

[07:07] have to rely on AdSense a lot more than he does. This is the power of positioning. The takeaway from this point is simple. Analyse your channel, or the channel you plan to start, through both the eyes of viewers

[07:21] and advertisers. What kind of brands are within your niche, and what are they looking for? I'm not telling people to just drop editing and start making tutorial videos in high value niches, but see if there's a way you can position yourself better in your current niche.

[07:35] It's another exercise that so few people practice, but can give you that competitive business edge. Just remember, it's not all about views. I have a music channel where I have over 100,000 subscribers and get around 600,000 monthly views but I make more on this channel with

[07:52] literally 10 times fewer monthly views. Why? Because I've positioned myself in a high value niche. For the third business lesson I want to take a closer look at one of Peter's main income streams, the digital products, and why I believe it is the most effective way to make a hell

[08:08] of a lot of money very quickly on YouTube while providing a great product to your audience. A digital product is by definition anything that can be sold online virtually without a physical form. Some examples would be software, ebooks, video courses and so on. In Peter's case

[08:26] he currently has five digital products on sale, all of which are packs for creators to help them make better photos and videos. But there are two words that make this form of monetization the most

[08:38] lucrative in my opinion for YouTubers. Unlimited replication. YouTubers are always going to be content creators first and business people second. Yes I'm focusing heavily on the latter in this video but you know what I mean. This

[08:53] means that running a time-consuming business on the side of it is hard. The beautiful thing about a digital product is when it's made it's made. There's no time-sapping maintenance and you can't exactly run out of stock. Your products

[09:06] can be downloaded or accessed as many times as is demanded at no additional cost to you. Bringing it back to Peter, let's do some quick maths. His Auden 2018 Presec pack retails

[09:18] for 30 US dollars. Let's say that Peter McKinnon has 500,000 true fans, and by true fans I essentially mean regular watchers of his content If just 1 of that 500 people bought Peter look pack that would equal in revenue before tax

[09:37] When you consider that's just 1 out of 5 of Peter's digital products, you can see what I mean when I say it's lucrative. Just as a disclaimer, this is simply guesswork, but it's to illustrate the point. How many t-shirts would you have to sell to make a similar amount

[09:50] when you consider paying for the raw materials, shipping, processing, etc. for each and every one. And at the end of the day, Peter is providing a really good product for the price of a t-shirt that helps the purchaser improve their creative skills.

[10:03] This is why I think for all YouTubers, having their own digital product should be an end goal. You of course need to build up the audience and expertise first, but when you have, it blows other forms of marginalization straight out of the water.

[10:19] I want to finish up with what may be the most important lesson from Peter in the entire your video, and I don't need much time to explain it, and that is to always respect your audience. I have talked about a lot of ways to monetise an audience in this video,

[10:33] but it's all going to be useless unless you practice proper integrity and respect towards the people that make it possible. In fact, the YouTubers who try to milk their followers for cash end up making less money in the long run because viewers see through

[10:45] them and leave. Here are three principles from Peter McKinnon to keep in mind to make sure you monetize with respect. Number one is to make sure the value exchange is fair. Peter makes high quality videos that provide a lot of value for his viewers.

[11:00] He shares so much of his knowledge for free that when he does so to monetize his audience are very open to it. Gary Vaynerchuk calls this the jab jab jab right hook method. Number two is to sell with transparency.

[11:12] Whenever Peter does sell his products or do sponsored videos he never does it in a pushy or pressurizing fashion. He often suggests free alternatives to what he is selling which I really respect. It's also clear he only likes to work with brands he actually uses.

[11:26] Now a lot of people say this but in Peter's case I really think it's true. You should view your audience as a friend or family member and never advertise something to them that you don't think will be useful.

[11:38] And finally number three is to never oversell. This one is simple. Peter clearly doesn't accept every offer to do a sponsor video. Some YouTubers videos almost seem like a 10 minute sales pitch these days. Peter has stayed true to putting his content first and not every single video he does has

[11:53] to be sponsored. So in a sentence, Peter has used the first 3 lessons in this video, combined with respect and integrity, to turn his YouTube channel into a million dollar business.

[12:05] That pretty much wraps up the video for today. If I helped you in any way please leave a like on this video. It took over 20 hours to research, record and animate so all your support makes it worthwhile. Also remember to sign up for a free trial with Epidemic Sound in the description.

[12:20] You get to try it for free for 30 days after which you can cancel if you don't like it and every sign up helps me pay for my groceries. Thanks for watching and I'll see you at the top.