How the YouTube Creator Economy Works 

I can't believe you didn't put a CuriosityStream/Nebula sponsorship on this video.

It wasn't mentioned, but one of the other main sources of income is Patreon. It's crucial for creators that make long-form/less frequent videos. I don't think any of the (smaller) channels making 1+ hour documentaries every 2-6 months would be able to do it off of AdSense and sponsorship alone.

It's also worth mentioning that when a creator signs a deal with an ad agency, they are typically paid a fixed amount based on the number of views they think their video will get before it's even published, and not the actual number of views the video ends up getting. The view estimate will be agreed upon by the agency and the creator beforehand, and it will usually be a lower-bound estimate because there are consequences if a video under-performs. For example, if a video doesn't hit the view target within 30 days of publishing, then the creator might have to do another ad for free in a future video (often called a "make-good"). On the other hand, if a video over-performs and greatly exceeds the view target, then the creator will still only be paid based on their initial estimate specified in the contract. This a win-win scenario for the advertiser because they effectively get extra free advertising regardless of how the video performs. It's especially easy for new creators to be taken advantage of, because it can be extremely difficult to predict how many views a video might get without a ton of experience, and so they are far more likely to settle for a lower number (and therefore less pay). So here's my personal anecdote on this. I signed my first ad deal with an agency 3 years ago when my channel was only 1 year old and I had only produced 10 videos. Since I did not have a lot of analytics history, I agreed on a view target of 75,000 views, which seemed reasonable based on the performance of my previous videos. However, this particular video quickly got picked up by the algorithm, gaining over 3 million views in the first month, and is currently sitting at just under 7 million views today. So in the end, I was only paid for 1% of the views I received on that video, and the advertiser got nearly 7 million free impressions for their product. All I got was a "good job" from the ad agency, and then they offered me the exact same rate going forward for my next video. Needless to say, I am no longer working with this company. Lately, I've seen some companies offering "bonuses" for videos that exceed expectations, so perhaps things are now shifting to be more equitable for creators. However, it's still important to recognize that these agencies are just businesses that are trying to make as much money as possible, and some of them will try to take advantage of you if given the opportunity. It's just something that I think people need to be cautious about, especially if you're a young or inexperienced creator on the platform. If you want to turn your RU-vid career into a sustainable business, then you really need to develop your business skills just as much as your creative skills.

I had never thought about this in so much detail (eg full value per view). Thanks for breaking it down Sam!

No joke, at VidCon I had literally pondered “huh, what would it be like for Wendover to make a VidCon logistics video?“ As a smaller(ish) creator who had access to that elusive Hyatt, VidCon really felt like two separate parallel events, one for the larger creators and big brands, and one for everyone else. Kinda understandable given how past VidCons sort of turned into RU-vidr petting zoos

I went to every Vidcon from the second one to the tenth and also every Playlist Live from 2-10 as well. I watched the scene change from being people and RU-vidr-based to companies and brands-based and then finally tik tok and brands with youtubers sprinkled in. There was something magical about those early years. I wish there were a creator-based event in London though. But perhaps those days are in the past.

You're so right about those parasocial relationships with content creators, Sam ol buddy!

Game Grumps is mostly funded by sticking two fingers into the coin return slot of arcade machines and hoping for the best.

You missed one major income source for some creators: amazon affiliate links. I've seen entire channels based around "rating" rooms/setups and then providing affiliate links for EVERYTHING in the description, pushing viewers to amazon where they can get a cut out of ANY sales made.

While short form content is very very much up in the air, super long form (livestreams) is still undecided. As someone dead center in the middle of it, platform wars are definitely happening between RU-vid Gaming and Twitch right now for the space. If RU-vid can replicate Twitch's monetization strategy & make their livestreaming experience better, we might see a bunch of platform switching--which is absolutely phenomenal for creators since Amazon & Google are in swift competition to make the best space possible to create content on.

2:22 "Served to audiences with particular... interests." Puts up a video of a plane cockpit. I see what you're doing here, Wendover.

Great video. Some of this stuff I didn't even know even though I've been in this biz for awhile now. One thing I always tell small creators who are first getting sponsorship offers is DON'T LET THEM SCREW YOU OVER, because ad agencies absolutely will screw you over if they can. They are able to take advantage of creators because most of us are just happy to be getting money for our work at all. It's sickening how we undersell ourselves and the sponsors/ad agencies don't pay us enough. Oh and Sam, I'm still waiting for that invitation to have my videos on Nebula. 😉

Dang this stuff about inexperienced creators being ripped off hits close to home.

Man, the whole section on merch made me realize why Linus tech tips works so hard on their product lineup, they get to keep all the profits on that while making money off their own advertising in their own videos

Never in my life have I been so excited to watch the sponsorship portion of a RU-vid video

Absolutely brilliant breakdown that will really resonate with a lot of smaller creators. Give them clarity they rarely find.

2:50 This is also because a person watching finance videos signals that they both want to enter economics but doesn't really know it yet. This means they're willing to spend more money in places more educated and experienced people won't, which makes the amount of money they can get from the person incredibly high. This pushes up demand and therefore the RPM. This is also why you see so many 3-minute ads with people and whiteboards in front of finance videos, because if they appeared in other genres, the viewers would either not be interested enough in finance to spend money or simply know better.

100% of my ad-sense, super chat, super thanks, etc. goes directly to charity.

This is great stuff. I don’t believe I’ve seen a video that really discusses the economics of RU-vid creators as in depth as this.

As a fledgling creator whose channel just monetized a few months ago, I found this video extremely informative. This is exactly the sort of information that should have been presented, but largely wasn't at this year's VidCon, which was the first attendance (and probably the last) for me. It seems to me that the whole emphasis has shifted away from long form educational (or "edutainment") content to short form, which is largely impractical for me. Anyway, I really appreciated the information. Well done, Sam!

I enjoy watching Fact Fiend's "How Not To Do Business" series. It's interesting to see how strict the contracts are, and how small the payments to the creators can be.

Great video, Sam! Love the point on sponsorships. Logically, if someone is sponsoring a video, they’re making more than the sponsorship fee. Good to see more creators start to capture that value themselves through their own product lines. If you don't have your own product to pitch, partnering with a sponsor via affiliate links where you get a cut of the initial sale and renewals is another way to share in the benefit beyond just getting paid for a set amount of views.

This is an awesome breakdown, so many RU-vidrs are trying to keep up with Tiktok without realising the short form style isn't really best for business

As far as 'kid's dream job' goes, RU-vidr/Streamer kinda cheats. Lots of kids want to be an actor, singer, or otherwise famous person. RU-vidr seems like the least barrier to entry. You dontt have to have specific singing/acting talent, and you don't have to move to Hollywood or find a record label or what have you. However, behind the scenes, the popular RU-vidr/Streamer you see all the time is one of the lucky ones. For every streamer with 10000 consistent live views, theres dozens of streamers with

As a full time creator with a team, i think this video is closest to justifying how complicated creator industry is, and yes it's going to get more than this

Never sign contracts that outlast a relationship. When starting, do a short contract so you can learn, then move on and get better rates elsewhere.

As someone who's new to the industry, I've found that a super effective strategy is to use short form content platforms to grow initially because of the reach, then as you begin to grow a good amount, you pivot and begin to create more content on longer form platforms, using TikTok/reels/shorts as a means to push traffic there. Not 100% effective, but it's helped me grow tremendously.

Awesome video - would love to see more in this category. "The insane logistics of producing a Wendover video"

This is a great overview. I have to say, while the creator life looks great, it seems to me like the vast majority of potential creators will never reach that $4K/month level, and even if they do, thats only $48k a year. For sure there are a few major winners in this economy, but it seems the vast majority of new entrants would be better served by trying to get a good job and potentially doing this as a side hustle.

This was the longest but best Hover ad I have ever seen!

17:42 “unsexy cost”. From a guy whose RU-vid channel is literally just logistics and the exact same kind of dull behind the scenes stuff, and is a widely loved creator because of that.

I think you missed one important element: social capital. While RU-vid may generate more financial capital, TikTok generates much more social capital. Some creators, (especially younger ones) are more drawn to hitting 1000 followers (much easier to do on TikTok) than making $100 on RU-vid. TikTok made it easy for people to hit 1000, or 10k followers, which is something that many people find invaluable.

I had never thought about this in so much detail, thanks Wendover.

Watched on nebula, im resistant to ads but nebula worked. I love being able to support multiple creators at once.

As a small farmer who is not a youtube creator, I have also noticed that farmers have been able to sell their services and books far and wide and also have become hubs in their region due to their constant exposure in that field. I also wonder how much Nebula paid you for the inadvertent ad in this video

That’s a long overdue video, as there’s precious little information around the “Creator Economy.” My own channel doesn’t fully sustain my life expenses and probably never will but, regardless, I rank starting Roadster Life as one of my best decisions: I learned a lot, gotten in touch with awesome people and have had a great time doing it. Thank you, and on to the next one 👍

Thank you so much for making the ONE video I've been wanting someone to make for years! This is also the one video where I WANTED to watch and pay attention to every single ad while I contemplated its value to you. And I learned so much more than I thought there was to learn about being a content creator! (To clarify, I'm not one.) So really, thank you so much! (One thing, though. That is not at all how you pronounce Simone Giertz. From one of her videos, it's pronounced "Yetch".)

im just pissed that the moment I happened to live near a vidcon, I also happened to move.

I would love to know the Hover conversion rate for this add. We were all just wondering what programs you were going to hype for the Nebula/Curiosity Stream bundle, but then you took us on an unexpected trip to Domain Town!

I’m dying! Where has this channel been all my life? I have literally looked up the past two videos you have made to no avail of finding one that has the exact question I have!! I was getting so frustrated with having to pay for RU-vid premium and then later finding that I had to listen to ads by the RU-vid creators thinking that the RU-vid creators were already making so much money just from their views that it was just simply greed that they started acting as spokes people. Thank you for elucidating this very mysterious side of the RU-vid creators experience

Glad you mentioned Hank in relation to this, he has done some excellent videos on the subject. One thing you left out in relation to TikTok is how their creator fund is only something like 5% of their revenue, while RU-vid shares 50% of ad revenue.

The differences in value of viewer are a quite interesting topic. Recently I had the chance to talk with people who had a mainly Japanese viewers and others who had mainly Indian viewers. While the channels with Indian subscribers had almost 10 times more subscribers, the Japanese channel had 2-4 times the monthly income. The lesson here is: I should switch my target group to Japanese people.

Simply, the best video on summarizing what the creator economy is. Thank you so much for this content!

Really great video! What I'd also be interested in is something you mentioned in the transition to your sponsor: The costs behind making videos. Now we know how much money RU-vid creators can expect to make with their videos. But how much of that is really yours to keep and how much do you have to reinvest to keep the content coming?

Q: “How the Creator Economy Works” A: Squarespace & NordVPN

As a creator this was extremely interesting to watch.

Would love a video about how RU-vid and other platforms “monitor” their content. “The cleaners” is a cool movie on this subject. Just be cool to look at the economics of how much it costs to do the monitoring they do

So much to learn! Thanks for prying off the top and giving us a look inside, Sam.

I’m a small time creator and I honestly don’t get how any creators can decide to go full time with their channel. It just feels like that would take all the pleasure and fun out of running my channel. Being able to work on topics which are interesting to me, but may not go viral sounds way better to me than trying to constantly “chase the algorithm.” Everyone has different priorities though I guess.

5:56 "... Being on camera boosts it, so does injecting more personality into videos, speaking in a less scripted manner does too." List of thing Sam doesn't do

I'm a longtime subscriber and huge fan of ALL your content and I wanted to thank you for this video especially. I finally feel like I have a clue. You do such an amazing job of explaining things in a way that someone like me who feels like I'm listening to an alien language when trying to get it, can finally understand the way it works. Keep up the excellent work. Love, Peace, and Chicken grease! ❣❣❣

Great video guys, full of details and really helps to understand the economics of the creator industry.

I somehow see this video becoming a billion view video pretty damn fast. After 10 years this was by far the best video on this topic made, well done!

I wish more channels were willing to peak behind the curtain of OZ (or at least its accounting department) to give us some idea of the economic realities of our favourite channels! Good on ya!

I wish i had seen your video earlier because throughout the past year, i have been doing creator economy research and was only able to find 50 % of the information in this video, including creators making money through their own merch. I'm definitely subscribing.

I had never seen so many creators commenting a video. From my perspective this is a clear sign of the quality of this channel. Incredible work.

It's really interesting that you have basically gone against every method of strengthening parasocial relationships on this channel (although on HAI you do inject more personality at least). I don't know if that is in any sense "good" or "bad", but it's definitely interesting!

This is a great video. My RPM on my main channel and podcast are $15 or more. At this point I think most FullTime creators don’t use Adsense as their anchor but brand deals.

Perfectly timed! This will be quite helpful, fascinating as always, thank you Wendover!

This is a very good overview on the creator economy. Good job!

I love videos like this where the comments are littered with huge creators talking about how much they enjoyed. Its really endearing to learn that some of the biggest creators are themselves also consumers

"RU-vid has successfully developed a platform that earns creators more." Yeah, tell that to history creators who routinely get their videos demonetized for producing "inappropriate content."

I have always wondered this exact question!! Thank you as always for great content!!

I love the filter bubble. I barely know most of these RU-vidr's. But I know Wendover, and I love it.

Dude, I feel like I’m living in a dystopian corporate run world where all knowledge is hidden behind paywalls… Good Morning children! Today’s class consists of learning addition!! But before that, let us give thanks to Souleech Juices for sponsoring today’s lesson!

Wow you make more money than I thought off these videos… Well deserved, Sam. Keep up the good work

Great info right here, never understood the whole Merch/Business part but it does make sense economically and psychologically

Ludwig's gonna love this one

I sincerely appreciate the quality of each and every Wendover Productions video.

As a youtuber, I always wondered this & found this interesting & this is soo cool! Thank you!

Thank you for this video, for some reason this is one of the most rarely covered topics on RU-vid.

I have watched at least 90% of your videos. This was by far the most fascinating video as I know very little on the subject. Keep making awesome stuff Sam 😊❤

You're doing God's work! No one else with your outreach has done a video like this and its a shame considering its 2022!!! Thank you so much for revealing the secrecy behind YT monetization

Can you do logistics of planning/running two weekends of Coachella & one weekend of stagecoach?

watching Wendover and seeing so much Thomas Frank... man it doesn't get much better

I had 1000% my usual tolerance for an ad after this class on the subject

On one hand, it feels kind of disheartening for a once intimate platform with personable creators to become so... "corporatized" in a sense but on the other, it's only lending more credence to content creation being the modern day California Gold Rush. Everyone wants to do it because everyone has a chance to make it. Honestly you don't even have to be a 1m+ sub channel making millions of views per video. Half, or even a quarter of those numbers is enough for any RU-vidr to live large. Obviously it's in the creator's best interest to maximize their earnings so long as it's available, but I don't think anyone would complain about making that original 11,000$ per video. Heck all of us would take 10% of that. 1000$ per video, make 100 videos (or 1 video every 3-4 days) and you have a 100k income right there, with almost no overhead unless you're paying editors.

This video is so meta it’s insane

Nice to finally see an in depth discussion about this

Hej Hej,....This video was much better than I expected. tHanks for posting it and all the work you all put in it. Happy New Year, wishing you good health and even more great ideas!

The harsh reality people need to accept is that unless you’re attractive, talented or funny, you’re not going to make money on RU-vid. 99% of the people who try don’t even come close.

I hadn't heard of the term parasocial relationship until this video! But wow, is that a minefield! I wonder if platforms like Facebook, Instagram or RU-vid measure the intensity of these parasocial relationships / interactions. It might be something that can help handle some of the negative psychological effects and possibly misinformation that social media use has been correlated with.

Great video, but I came here just to say, I really liked the way you handled the end sponsor pitch :) very good job!

This was by far the best video I've watched this year.

While many might say that "ugh, those stupid kids just wanna become youtubers/streamers/whatever", I think it's a pretty valid dream. No doubt being a somewhat big creator, let a lone a big one, is still a hard job, I imagine it's a thousand times better than sitting in an office doing practically the same stuff for many years, no wonder kids dream to become such creators, you start out doing what you actually like/love and if it all goes well, you continue doing that but you are much more successful, if not, then you are doing something you like less but still you are successful.

I do wonder how the forthcoming downturns and recessions are going to impact content. It'll primarily hit both advertising and subscription revenue at a time where we are heading more toward cramming videos with advertisements or increasingly turning to a subscription model. When its a decision of heating, filling the car with fuel or eating compared to a subscription fee, the fee will go. And advertisers having to cut their marketing budgets will also herald the end of the profitability of many a content creator at a time when RU-vid is increasingly making it clear that the good times of effectively free, unlimited hosting is coming to an end and everything must justify its existence via profitability.

sick video mate

15:37 smoothest plug of all time. I'm subscribing immediately.

These videos are so awesome!

Is this the first time Wendover Productions referenced itself in the main body of a video?

Woooow! Long time viewer here. I did NOT expect to see myself in a Wendover production video, ever. But in 08:28-08:32, I'm the guy with the ball! Thanks for breaking it all down, and even though I am in the middle of all these apps, it's great to have some numbers attached to it. Thanks for including me too 💁

Thanks for this video! Super well done... Makes me feel pretty good about my own channel, actually. My RPMs are well above your hypothetical example... Guess I'm lucky with my interests!

The thing about TikTok is that everyone knows it is a fad. Even as just a consumer and not a creator I can see this. RU-vid won't last forever, but it will definitely outlast TikTok.

i HATE short videos, its why i really am opposed to youtube "shorts" and get frustrated when the youtube homepage tosses a bunch of 20 second or less videos at me. I much prefer long videos and they are pretty much all i watch

I need Wendover Productions and/or Half as Interesting merch now. Exactly like the striped, long-sleeve polo shirts.

I literally learn so much from this channel and find it so interesting, despite the fact that they are about subjects that are not relatable to me.

Thanks for breaking this down for me. I don't watch TV and I don't use any streaming platforms like Netflix or whatever. The ONLY thing I use is RU-vid and it is NOT because I like YT. I absolutely loathe and despise it. I use it because back before I became privy to the insidious nature of YT, I had amassed a library of channels I really respected. Once I began learning what YT does to independent channels, I decided to keep using YT only to support those poor channels being shat on and abused by YT. But I haven't understood the specifics of how it all works so I've often wondered if my efforts have helped them at all or only gone to support YT. I want to support the channels, not the platform. So I do as much as I can for the channels that doesn't do too much for the platform itself. As hard as that is to accomplish. But this helps provide me clarity on what to do and what not to do. I want to oppose YT as much as I possibly can without abandoning the little guys being crushed by the uncaring hands of YT execs. (also, I love the idea of Nebula but as a subscriber for a few months now, it is just an awful app. Please update it and make it more functional. It's constantly crashing, restarting videos, the library feature shows me videos I'm not even following, and so on. The app needs a lot of work)

I love “inside baseball”. Always wondered how this kind of thing works.

I've been considering getting into the mix. Thank you for explaining how it works!

Really so interesting! Thank you for the clear explanation!