How Exactly Do People Make Money on YouTube?

[Editors Note: This article was written by Hugh McIntyre. Hugh writes about music and the music industry and regularly contributes to Forbes, Sonicbids, and more.]

 

By now, everybody involved in music (and the internet, really) must be aware that there is money to be made on YouTube…but how is that done? How can somebody actually see their bank account inflate (if only by a little bit) based on content they give away for free?

It’s all about the ads! Throwing advertisements onto your upload might not make you rich, but it can earn you some much-needed cash, so here’s a primer on what you need to know and how you can get started when it comes to advertising on the free-for-all that is YouTube.

Make Sure You’re Actually Displaying Ads!

I have heard a number of musicians admit that while the idea of collecting even a few dollars from their YouTube videos is appealing, they don’t even know how to get started. Creating monetary connections with a multibillion dollar company and becoming something of an advertiser can be somewhat daunting, but don’t let it scare you off from inserting ads into your content!

Unless you’ve specifically gone through the process of actually adding advertisements onto your clips, it is highly unlikely that you’re already making money off of them, which means you’re missing out.

The first step is to join YouTube’s “Partner Program,” which essentially means you’re worth advertising with. Don’t be nervous if you’re not accruing millions of plays per video—every video is worth monetising, especially to YouTube. This step should take all of about three minutes.

The next necessary step is creating what Google has termed an “AdSense” account, which is where the money comes in. AdSense has become one of the biggest and most important advertising platforms on the internet over the years, and YouTube knows how to make it work as well as its parent company. This requires you to have some financial info on hand, and it can take a few moments, especially if you don’t have everything necessary right in front of you. Again, it’s not hard, but you’ll need to be approved before you can move forward.

From there, you’ll decide what videos to monetize. I’d suggest at this point in your career throwing ads onto everything you upload, but if you have a piece of content that is truly special and that you feel will be hurt by a something like a car commercial playing before or a banner appearing at the bottom of the screen, feel free to opt out. This is your art and your career, after all.

Different Kinds Of Ads

Okay, so you’ve decided that you can handle a bit of advertising with your music if it will help pad your bank account. Is that all you need to know? Not even close. There is still plenty to learn about advertising, ads, making money, and what will keep people coming back…but I can’t fit everything into a single post.

You may not have realized it while watching videos on YouTube, but the company actually has half a dozen different kinds of ads that can earn you money, depending on the situation. They will all make you different amounts, and you should consider carefully which ones would be most appropriate for which uploads. Here’s a quick rundown looking at what is what (using the company’s terms, because that’s what you’ll want to become familiar with):

Display Ads

These are the visuals that don’t actually cover your video in any way, but which are posted to the right of the screen, which is common for any website these days. Even if you’re not a fan of interrupting your art in any way, you can surely support this, right?

Overlay Ads

These are the banner ads that pop up at the bottom of the video screen that you’ve probably seen a million times. They’re not nearly as intrusive as some other forms, but that also means they won’t net you quite as much money per click.

Skippable Video Ads

This might be the best option for you as a musician when it comes to inserting ads to your videos. These video advertisements play for a few seconds, and then the user has the option to move on or keep watching the sponsored message. This puts the power in the hands of your fans, but it also means you could earn a few dollars if all works out.

Non-Skippable Video Ads

Brands will pay good money for ads that cannot be ignored before the music plays, but that also intrudes on the listening/watching experience. Are your fans willing to stick around through a 30-second ad to see your latest music video? You need to ask yourself this before selecting this option.

Bumper Ads

These are also a potentially perfect option, as they bring in more cash from advertisers because they are video ads that can’t be skipped, but they are only a few seconds long, so most people won’t mind sitting through them. At just six seconds long, these aren’t likely to annoy many, and it’s difficult to imagine hordes of fans moving on from your content because of these short promotional moments.

Sponsored Cards

These aren’t quite as common, but they can actually be helpful in some small way. Sponsored cards aren’t random ads—they typically offer items for sale that a user may have just seen in your video, or which relate in some way. That’s a nice tie-in, and it doesn’t feel quite as corporate.

It’s Not Just Your Videos That Make Money

This article was primarily focused on covering or introducing your music videos with ads, but the above options aren’t the only ways to make money on the world’s largest video hosting site. You should also be monetizing your music, which either already is, or will at some point in the future be used in other people’s clips. You never know when a fan will make a lyric video or post a cover, and while you have the power to take those down, it makes so much more sense to simply throw an ad onto those and collect the cash.

There are a number of services that can track where your music is being used and help you earn from those clips, including TuneCore’s YouTube Sound Recording revenue collection service, which utilizes YouTube’s own ContentID platform.

December Industry Wrap-Up

By Hugh McIntyre

2016 has finally come to a close (or it will relatively soon, thankfully), but we’re not done just yet. December is always the busiest month for everybody, and the same is doubly true for the music industry. The biggest albums are released, year-end lists begin rolling out, the Grammy nominations are announced, and everybody starts gearing up for a new year. This December was no different, and there was quite a lot going on.

  • Drake was the most popular artist on pretty much every streaming platform there is, and it wasn’t even close;
  • Artists being played on the radio might soon see their royalty checks dwindle;
  • A classical composer who has been dead for a century nabbed the title of the best-selling CD of 2016; and
  • We all love Facebook…except the music industry and indie musicians, that is.

Drake ran all of streaming by an enormous margin in 2016


It should come as no surprise that Drake was the most-streamed artist of 2016, with almost no differentiation between the major players in streaming.

The hip-hop star was the most-played on Spotify and Apple Music, and the most-thumbed on Pandora (meaning more people liked his songs than any others). His album Views and his songs “One Dance” and his collaborative hit with Rihanna, “Work,” helped his name appear at the top of essentially every ranking.

Drake himself saw his music played close to five billion times on Spotify alone, and Views just recently became the first album on Apple Music to see its songs streamed at least one billion times. Spotify, which has five times the users as Apple’s relatively new entrant to the streaming market (100 million vs. 20 million), padded the rapper’s wallet even more. Just about a week or so ago, “One Dance” became the first to reach the one billion milestone on Spotify, becoming the first of what will surely be many.

The only places on the web where Drake didn’t seem to rule were on video platforms. He was not among the most popular acts on sites like YouTube and Vevo, which was because his album Views and the singles released off of it didn’t have promotional strategies based on videos for the most part.

While not everybody can rack up as many plays as Drake and his friends, the number of songs being streamed in the U.S. every year is growing rapidly, and that benefits everyone. Nielsen reports that by the time the year has concluded, over 250 billion (yes, that’s billion with a b) tracks will have been streamed in America, which represents a 77% increase from 2015. With more and more people signing up every day, that number should continue to climb by at least another 50% in 2017.

Radio stations are looking to pay songwriters even less


The radio industry is notorious for low payout rates, and ones that only benefit some artists, and it still isn’t satisfied with that fact.

A committee combining the powerful forces of 10,000 radio stations across the United States has launched a lawsuit against Global Rights Music (GMR), a performance rights organization that is tasked with collecting royalties from people and companies that play the music of its artists, and with working to slowly, but steadily, raise the amount paid for those broadcasts.

This action, while despicable to artists of all kinds and at all points in their careers, is nothing new. For decades now, the radio industry has fought to lower the amount of money it needs to pay when songs are broadcast to listeners. Every so often, there seems to be some new all-important reason why the business of radio deserves to put more money in its own pockets, or why artists are being overpaid.

While the industry’s reasons change from effort to effort (and this time it’s something a bit too technical to actually be relevant or important to most people, and it seems like a real grab), the fact that radio needs music much more than the opposite remains irreversibly true. If every major artist pulled their catalog for use on commercial radio, people would find other ways to listen to tunes, while the business would go under. Radio argues that it provides valuable promotion to artists and record labels, which makes them money, but does that mean the entire industry should continuously be allowed to pay less and less for the same performances?

The radio industry doesn’t often win in these cases, or at least not by too much, so hopefully this latest legal assault won’t pan out, and artists will still be paid the fractions they earn now.

The best-selling CD of 2016 is shocking, while the best-selling albums are not


It might sound too crazy to be true, but the artist that managed to sell the most CDs from one collection is none other than Wolfgang Amadeus Mozart. The composer, who certainly wasn’t around to do any promotion or tour on the new item sold under his name, released a new box set in 2016, and his super fans snapped it up.

Mozart 225, a celebration of essentially everything he ever wrote for his 225th birthday, is a 200-CD box set that retailed for under $350 on Amazon, making it a serious steal. The label behind this project, Decca, wasted no time in sharing the news that it had nabbed the best-selling CD of the year, which is technically true…at least in some respects. The box set only moved about 7,000 copies, but when one considers that there are 200 CDs per box, that adds up to about 1.3 million shifted, which is rather impressive in 2016.

Having said that, Mozart 225 is only available on CD, so it lost out to more current stars when other forms of albums are added into the mix. Drake, Beyoncé, Adele, and Rihanna all moved more albums (or album projects when streaming is taken into account), and people bought their CDs too!

CDs as a category took another hit in 2016, but millions of people around the world still want to own the music they love in physical form, and they are willing to pay. Those artists working in genres that cater to audiences that like to buy music, especially in physical mediums such as classical, should not be swayed from making these products for fans to buy.

Facebook is clashing with the music industry in major ways


Social media giant Facebook has long been a leader when it comes to many technological advancements, from connecting with friends and family around the world to messaging to online gaming, but when music is concerned, the world’s most popular social channel is playing catch up, and things do not appear to be going well.

The company started integrating music and music videos in a major way not too long ago, and while that sounds like it should be a good thing for everybody involved, the music industry has banded together for the most part, and it is not thrilled.

Licensing deals have not been signed with the major labels, and advertising does not exist in the same way as on sites like YouTube or Vevo, so the money isn’t flowing as it should. This means that artists of many sizes, especially those towards the bottom in terms of popularity and those trading in covers, aren’t earning money on their works, even though Facebook can collect cash on ads placed not necessarily on the videos themselves, but on other pages on the website.

Because Facebook isn’t yet paying for using music (which already seems like a ridiculous sentence), takedown notices are pouring in as they used to on YouTube before advertising models caught up with the way people were uploading tunes. This is bad for anybody trying to promote their music, or themselves, on the platform, and it’s sadly not going to change until the industry can force Facebook to start paying for the music it is using. The social channel could, and hopefully will be, a powerful tool for promotion and a source of revenue, but that may need to wait until next year.

Buying Social Media Followers – Should You Do It?

[Editors Note: This article was written by Hugh McIntyre. Hugh writes about music and the music industry and regularly contributes to Forbes, Sonicbids, and more.] These days, musicians aren’t just selling their art, they are selling themselves. Fans don’t just want to hear songs every so often and go see your live show, they want to feel a real connection with the musicians they love so much, and that’s all thanks to social media. The advent of platforms like Twitter, Facebook, Instagram, and a myriad of others has been both a blessing a curse for the world at large, especially artists. It helps forge powerful, lasting, valuable relationships with fans all around the world that previously weren’t possible, but it is also a new demand placed on those working hard to stay afloat.

As is the case with almost anything related to your career as a musician, just getting started and off the ground when it comes to social media can be one of the toughest things about the entire endeavor. It’s so easy to look at both musicians and social celebrities with hundreds of thousands of followers and more interactions than they can handle and wonder, “How did they get there? What am I doing wrong?” Well, I can’t help everybody with that second question, but I have a suggestion for the former.

It might be controversial, but I often suggest to those acts just getting started, both in their careers and online, to purchase some social media followers. Yes, that’s right—you should pay money to have people follow you on the various social platforms where you should have a presence, but don’t tell anyone you did (and certainly don’t tell anybody I said to do it).

The idea of purchasing followers, likes, views, and everything else on social media is nothing new, but it is one that has always been despised by many. It is maligned with negative connotations, but it can also be extremely helpful when it comes to kicking things off on social channels, which is very important to you as somebody trying to get the masses to fall in love with who you are and what you create.

When explaining why I believe purchasing social media followers is a good thing, I always use the analogy of a party.

Nobody wants to go to a party until there are plenty of people there and it’s in full force, right? But if that’s the case, how is one supposed to get a party started? The same can be said for your Twitter or Instagram page. Why would anybody want to click the follow button on an account with 25 followers, even if the content seems to be great upon first glance?

Feel free to invite all of your friends and pre-existing fans to join you in these places, and then do a quick Google search to see about upping those numbers. You don’t need many, and in fact, why purchasing, you should do so intelligently. If you are an artist with only a few songs out and yet you have 50,000 followers on Twitter—we’ve all seen these people—nobody is going to believe you, and your efforts will end up backfiring, making you look like a fool in the process. Think before you buy. Will 500 followers make you look appear to be on your way? 1,000? Maybe start with one and eventually spend your way to that second figure? There are many different ways to go about this, but you need to be aware that people are going to quickly glance at your follower counts and judge you instinctively based on them.

Now, you may be thinking that this is all an exercise in vanity, and I’d say you’re right, but only partially. Having a respectable follower count on popular platforms shows that some people have invested in you, if even in some small way (and even if they aren’t real, but that’s just between you and I). It tells those that might be potentially interested in booking you to play a venue, a festival, or even to sign to a label that there are people out there that are interested, and that there might actually be something to the artist in front of them.

Buying social media followers, as well as likes on various posts you may upload to Instagram, Twitter, Facebook, and so on, is something you should consider, and that I’d suggest, but it doesn’t have to be a necessity for everybody. If you want to go the traditional route, feel free, but keep in mind that even the biggest and most successful artists partake in this strategy. Pop stars, rock bands, and rappers all up their counts from time to time with fake followers, just as they do with real ones. You won’t be buying in the same bulk as them, but don’t feel like this is just a no-man’s game.

This tactic shouldn’t cost you much, as all of these services come pretty cheap, which probably won’t surprise you when you take a look at some of the options that pop up on Google (they’re fairly sketchy looking). Think about what I’ve said as you set up or begin to invest time and effort into your social channels, and decide if this is the way you want to go, but don’t worry or think too hard—it is just social media, after all.

November Industry Wrap-Up

By Hugh McIntyre

The end of 2016 is close enough to touch, but we’re not there quite yet. November was a big month for music, if not the business, and a number of the most popular movers and shakers in the game made waves with new projects, changed history, and tried to push the boundaries of where their art had been before.

  • The Chainsmokers and Halsey are now immortalized in charting history thanks to their shockingly-popular hit “Closer;”
  • With a new string of mixtapes on the way, it is starting to seem as if Hamilton will never go away—not that you’d want it to;
  • Beyoncé, the country music star? If she has her way, she’ll be on top of every genre.

The Chainsmokers now have the fourth longest-running number one hit of all time

After what felt like forever, The Chainsmokers finally slipped a single spot on Billboard’s Hot 100 chart, vacating the number one spot the EDM duo had owned for months. The pairing’s hit song “Closer,” which features the vocals of up-and-coming pop singer Halsey, ruled the all-encompassing singles tally for an incredible 12 consecutive weeks, which puts the track into the history books alongside some of the greatest tunes that have ever been released.

The surprising reign enjoyed by The Chainsmokers and Halsey goes to show that despite reports, EDM is far from dead, and in fact in many ways, it has become the new “pop.” For months on end, “Closer” was the most-played song on the radio, the most streamed track, and the best-selling song in the country, proving that the masses have accepted this relatively new genre just as they have so many others in the past.

As production software becomes cheaper and easier to use, there are more remixers and dance producers than ever before, but clearly there is a market for this kind of material, and it is now entering a new era where it can compete with the biggest of all time.

Lin-Manuel Miranda is extending the Hamilton brand into a series of mixtapes

Hamilton creator Lin-Manuel Miranda is clearly a proponent of the idea that if something is working, keep running with it until people are tired of it. The man behind the hottest show to come to Broadway in years began rolling out the first tracks from the Hamilton mixtape that he revealed as in the works earlier this year, and already people are freaking out. The album-length project doesn’t yet have a release date, though it’s due at some point before the end of the year, but it already looks like it will be one of the biggest, and certainly the most highly-anticipated, pieces of music of all of 2016.

Miranda caused a frenzy online when he tweeted a photo featuring the tracklist for the Hamilton mixtape, complete with what artists had taken up vocal duties on all of the reworked songs. The group of names that the theatrical prodigy was able to put together is incredible, and it reads more like the lineup of which artists are set to perform at the Grammys or who has been hired to headline Coachella than a mixtape. Kelly Clarkson, Sia, Chance The Rapper, The Roots, Usher, Alicia Keys, and over a dozen others have all lent their talents to the CD, which is now even more hotly tipped than ever before (if that’s at all possible).

Around the same time, the playwright also revealed that this upcoming album was just the first mixtape, and that he was planning on turning Hamilton into not one, but a series of mixtapes. The actual cast recording of the show, which has already been certified double platinum and is still hanging on in the top ten on the Billboard 200, features 46 tracks, so it’s not difficult to understand how Miranda could continue to roll out mixtape after mixtape, keeping the brand fresh and alive for years to come.

Hamilton was creative enough as it is, but Miranda’s plan to morph it into mixtapes is a fantastic idea, not just in a creative sense, but when it comes to business as well. He’s turned one successful project into several, which is something that other musicians should take to heart.

If audiences love a song or an album, why not keep serving it to them in different ways to see how far it can stretch?

Beyoncé runs the (country) world—or at least she wants to

Beyoncé, or as many know her, Queen Bey, has already conquered the worlds of R&B and pop, but someone as ambitious as she is always looking for new challenges and new ways to come out on top.

When the singer launched her second surprise visual album earlier this year, fans were excited and shocked to hear a bit of twang on the new CD. Lemonade featured a country song entitled “Daddy Lessons,” which saw Bey going in a new direction with her music. Fans and critics applauded the effort, and it has been noted as a standout track from the album alongside singles like “Formation” and “Sorry.”

Now, with Lemonade slowly working its way down the charts, Beyoncé has launched a full-scale promotional campaign to make her mark in the country music world with “Daddy Lessons,” but surprisingly, it isn’t going as smoothly as the star is used to. Just days before the CMAs (Country Music Association Awards), it was announced that Bey would join forces with the Dixie Chicks to perform “Lessons,” which excited both country fans and the Beyhive. The aftermath of her stellar showing was mixed, with many complementing the excellent performance, while others commented that she seemed out of place at the CMAs, which are focused solely on country.

Not long after her time on stage, a live version of “Lessons” made its way onto Spotify, becoming the first track off of Lemonade to be made available to the public outside of either Tidal or iTunes. Up until late November, the only way the public could hear the superstar’s new collection was to buy it in full or sign up for Tidal, a streaming service co-owned by Bey, her husband Jay Z, and a few dozen other musicians. Her acquiescence shows that while she might be one of the biggest stars in the world, even Beyoncé needs to be on Spotify, where millions around the world access their music.

Reinventing yourself as an artist is difficult, especially when it comes to switching genres, though it’s not impossible. Bey was smart enough to go country in her own way, and not simply copy what the chart-toppers in the genre do. “Daddy Lessons” may have more guitar than the world is used to hearing from her, but she was able to discover what she could bring to the table that other superstars weren’t, which is a Louisiana vibe and a charisma and voice no other artist can match.

Transitioning from one style to another is possible, but it needs to be done intelligently and correctly if it’s to work out.