Making Money From YouTube, Video Channel Content Beyond Advertising

The rise of video content and channels on YouTube makes it more difficult for channel owners to generate revenue -- but those who find a following can bring in tens of thousands, even millions, of dollars annually. Some turn to advertising, while others connect with fans through merchandise. Search agencies have the same opportunity to find that connection with viewers through physical goods. The search agency Moz, for example, could create an 8 x 10-inch branded erasable whiteboard that search professionals could hang above their computer to connect with its series Whiteboard Fridays.

Creating merchandise that connects the creator with fans takes business sense. Video star Olga Kay began her YouTube channel career in 2006 by slowly building the number of viewers. Her first YouTube paycheck totaled $54. Today, she merchandises her fashion sense and image in a collection of knee high socks. "I love wearing dresses . . . and knee high socks," she said in a VidCon panel discussion on monetizing YouTube channels beyond advertising. "I love crazy fashion and nothing ever matches."



YouTube video stars who choose to monetize their channels through merchandise rather than advertising or broadcast television and movie deals remain the gatekeeper to the content. Many of the channel creators are young entrepreneurs trying to find their way. In an interview Friday at VidCon, The Fine Brothers stressed the need to complete a higher education for those seeking a career in video. Not only as a safety net, but because an accounting, a marketing degree or even an MBA could become real handy as online video evolves.

Sam Toles, VP of content acquisitions and business development at Vimeo, said for those showing a significant amount of initial success, the company has a $10 million audience development fund, money advanced to content creators that helps "supercharge" marketing campaigns. One creator made a documentary about Sriracha hot sauce. "He made tens of thousands of dollars selling the documentary," he said, though failed to tell the audience about the litigation by local Irwindale, a Los Angeles suburb, residents that took place against parent company Huy Fong Foods. The documentary linked to current news.

Beth Greve, chief revenue and partnership officer at Awesomeness TV, which DreamWorks acquired in 2013, told the story of a YouTube channel creator who became very popular with brands. He was in line to do a great deal with a major brand that went to check out his channel on the same morning that he uploaded a spoof using fake guns making fun of a non-violent situation. The fake guns in the video caused a problem, and the brand decided not to associate with his name. The deal was canceled.

Greve said YouTubers live in a challenging world where they are edgy and creative, but once they begin to start taking money from brands, there's another voice in the equation. They must be ready to make compromises.

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