Download: MP3 (6.5 MB)
YouTube is a wonderful acquisition channel.
It’s a great way to reach people, but increasingly I see people wanting to “make it big” on YouTube. They say, “I want to make it big on YouTube,” and they see it as an end unto itself.
There’s a lot of people on YouTube making a living just posting videos, playing video games, making vlogs, or talking about whatever they want to talk about and people are saying, “I want that!”
They’re saying it like it’s this silver bullet, like making it big on YouTube is going to solve all their problems and make them millions of dollars, but have you really looked at the numbers?
Yes, the handful of YouTubers at the very top make multiple millions of dollars, this is true. Did you know that the 20th most profitable YouTuber only made just over a million dollars in the past year?
You see articles out there talking about how much money YouTubers make and they act like a million dollars is a lot of money.
A million dollars is not a lot of money! If you think a million dollars is a lot of money, you need to stop listening to this show. I’m serious, stop listening to this show.
This show is about thinking bigger. This show is about helping you build and grow a sustainable business.
If you think a million dollars is a lot of money, you might get $100,000.
If you think $100,000 is a lot of money, you might get $10,000. You have to upgrade your mindset.
When you think about it this way, that the 20th top YouTuber made only a little over a million dollars in the past year, that’s 20 YouTubers out of a billion YouTube users.
In 2013 YouTube had a billion users! I don’t even know how many they have now a little over 2 years later. Let’s just assume it’s only still a billion even though we know there’s more now. The top 20 YouTubers are 0.000002% of all YouTube users.
A Business Is an Asset
The 20th most profitable YouTuber is making just over a million dollars. To be the 20th person and make just over a million dollars, you have to be in the 0.000002% of YouTubers.
Compare this to growing and building a sustainable business.
Did you know that there are 10 million households with net worths over $1 million dollars in the United States alone? Obviously that’s net worth, but there are still hundreds of thousands of million dollar tax returns filed every single year.
There are even tens of thousands of single-person companies filing million dollar tax returns every year. That means there are tens of thousands of single-person businesses making over a million dollars a year.
That’s the potential for business, meanwhile the 20th top YouTuber is only making a little over a million dollars and we have tens of thousands of individuals single-handedly making over a million dollars a year in their business, not their YouTube channel.
I see everyone aspiring to be YouTube stars. Don’t aspire to be a YouTube star!
There’s nothing wrong with YouTube as an acquisition channel, but stop trying to be the 0.000002% of people on YouTube.
Grow a business, use YouTube as an acquisition channel, and have a business plan and revenue model.
All of this doesn’t even account for the fact that you’re putting all of your eggs in one basket. Your entire livelihood and sustainability is in YouTube’s hands.
Now, we all think of YouTube as very large. It’s the second largest search engine in the world, which is nothing to shake a stick at, but we also thought MySpace was large.
We thought MySpace was infallible and then it just went away instantly. You’re naive to think that YouTube will be around forever.
Even the top YouTubers that are making this much money a year, they’re making it by putting out video and getting ad revenue and sponsorships. They have to keep working for that.
They’re making a really great income but they have to keep working to make that. If they stop, their income will dwindle, because fewer and fewer people will see their old videos.
Ad Blocking Is on the Rise
Yes, YouTube is a massive platform and most of their money comes from ad revenue. The same for the content creators, who get most of their money from advertisements, yet ad blocking is on the rise.
Increasingly, year after year, the trends are showing that people are blocking ads more and more. They’re becoming disenfranchised with ads. They don’t like them, and they’ve become adverse to them.
People don’t like advertisements. They’re either blocking or ignoring them, and the ads are becoming less effective. On the one hand, ad blocking is going up. On the other hand, the effectiveness is going down, which means the cost of ads and the profitability of ads is also going to go down.
Ads are going to be less and less of a sustainable source of revenue. When you’re putting all of your eggs in the YouTube basket, you’re risking all of this.
You’re just hoping that YouTube will make it. You’re hoping it doesn’t fail, because if it does, you’re going to go down with it. YouTube knows all of this.
YouTube has YouTube Red now, which is a subscription service as a way to get money from people because ad blocking is on the rise. Not everyone is going to pay for YouTube, that’s just a reality.
The money from subscriptions isn’t necessarily going to eclipse the money that used to come from ads—we don’t know that. We do know that YouTube is acknowledging that they need other sources of revenue. They need to be profitable. I want to encourage you to see YouTube as a tool.
See it as a tool and a means to some other end that you have, not an end to itself.
Don’t go into this with the aspirations of becoming big on YouTube. Go into it with the aspirations of building a business. Use YouTube as a tool, an acquisition channel, and a means to reach people.
Do what you love, share that with people, help people, provide value, but then point them to your own platform, and make sure that you’re actually selling something and not just relying on ad revenue.