Steve Dotto here.
Thanks for joining me today for the next installment
in our journey towards 100,000 subscribers.
Today, I want to talk to you about revenue
again because revenue dominates my consciousness
a lot as I look at my YouTube channel.
Now I know I call this series Growing Your
YouTube Channel to 100,000 Subscribers but
it could just as easily be called can you
make a living on YouTube?
Is it possible to make a good living from
YouTube?
Those are the questions that I’m trying
to discover the answer for.
That number of 100,000 subscribers is important
but nowhere near as important as how much
revenue we can make and how many subscribers
we need in order to attain a reasonable revenue.
And is it subscribers at all or is it engagement?
There are a lot of different factors.
There are a lot of moving pieces.
Today, I want to talk to you about revenue
and I’ve been looking at a newer model.
For some of you, it might be slightly old
hat but it’s still fairly new – a service
called Patreon.
Now here’s what I’ve been doing so far
as far growing my YouTube channel.
I have added AdSense revenue and I’m making
reasonable money from AdSense but it’s certainly
not enough to make a living at this point
sitting at 21,000 subscribers as we are at
the moment that I’m talking to you right
now.
It’s trending in the right direction but
I’m going to have to hit that 100,000 mark
in order to make a living from it or even
hopefully making a living from it, at least
the way the numbers are saucing [phonetic
00:01:30] right now.
I can look for dedicated advertisers to find
channel sponsors and get out and sell sponsorship
but I’m kind of reluctant to do that because
I’ve spent 20 years in television dealing
with sponsors, going out and getting sponsors.
It’s not that I don’t like sponsors.
It’s just that side of the business is worn
on me now.
I’m not inspired to go out and sell to a
variety of sponsors.
I’m inspired by creating content so I’m
hoping that within the YouTube environment,
within the online environment, I can find
some ways that I can concentrate on what I
think I do best, which is creating good, compelling
content and engaging with my audience, and
hopefully the money will take care of itself.
Now I know I might be a little bit naïve
in dreaming that but what the heck?
We are on a journey of discovery so if we
can find that, wouldn’t it be good?
Indeed, it would be good.
And I may have found it.
We may have found it.
Patreon is the site.
Let me take you to Patreon.
Patreon is really Kickstarter for video or
Kickstarter for content creators but as opposed
to being project-based where you’re trying
to launch and sell a project, it’s for ongoing
creation so artists, video producers, people
who create ongoing work can engage with their
audience and ask them to support them on an
ongoing basis.
The commitment can be piecework, as in I’m
going to produce a book every six months or
I’m going to produce a song every two weeks
or pay me per song, or it can also be time-based,
support me this much per month for people
who are doing serial type work.
Now when I was first exposed to it, I thought
I’m not sure how I feel about it.
To be honest, I kind of feel funny if I set
it up, going out and asking people to pay
me to view the type of content that you’re
watching right now.
But at the same time, I’m doing that to
a certain extent because I’m asking you
for your time and your time is as valuable
or more valuable than your money so obviously
you’re already investing in my content by
watching this.
But I’ve been getting advertising so you
know there’s a commercial relationship.
You understand I have to make a living and
as I thought it through I think audiences
are more mature now, probably more mature
than they ever have been but probably not
as mature as we will be in a few years as
we kind of get our heads around this a little
bit more.
We are now moving into, I guess a term might
be a troubadour environment, where a smaller
artist or a smaller creator of content can
form a like interest group, a group of people
that are really passionate and interested
in the same topic as them, find value in what
they have to say and then take a small amount
of money from each of those to help support
them.
If you’re part of that audience and you
really value the content, then you’re willing
to put a little bit of money in each month
or each episode in order to help get that
content down to you.
But of course there’s got to be a quid pro
quo.
I’ve got to give you something more than
what I’m giving you now or take something
away like take away advertising or something
like that as I move along.
So as you start to look at Patreon, if it’s
something that you are going to look at yourself,
probably what you’ll do is you’ll dive
into the site and you’ll immediately go
and look at who’s most successful and you’ll
also look at people that are in your niche,
trying to find out exactly how the people
in your niche are doing and that’s exactly
what I did to get a feel for how audiences
respond.
So there are a couple of technology creators,
content creators that are doing quite well,
I think at least quite well on Patreon and
so those are the ones that I started with.
The first one is right here.
He’s right here, Chris Pirillo.
Now you know Chris Pirillo, the Locker Gnome.
He’s a funny, creative, energetic guy that
gives great tech advice and he reviews products.
He does real reviews and makes recommendations
on products and his hand is in a whole bunch
of different areas.
He’s got a company that works for him.
They do high quality video.
Basically, he has a good business model and
it’s been growing for quite some time.
He has a solid following on YouTube and some
other solid revenue streams, I’m sure.
I’m not positive because I haven’t talked
to him about it but I’m pretty sure he does.
So he has set up a Patreon account as well.
Now the cool thing about Patreon is you are
able to have a conversation with your audience
and they’re able to reach back to you on
a far more intimate level than we used to
have say when we were on broadcast TV.
But you’re allowed to invest your audience
in your success.
I’ll show you what I mean.
You set milestones and you set goals.
Right now, Chris is getting just about $5,000
per month.
He set this milestone.
First of all, he’s reached a milestone.
If I click here, he’s reached a milestone
so when he hit $3,000 a month, he promised
to produce a 15 to 30-minute will happen every
day, a 30-minute video.
So he’s offered basically to increase his
publishing and I imagine he’s honoring that.
Look at his next milestone, which he is within
a couple of hundred dollars of, all Patreons
get a new, exclusive, monthly deep dive video
on a hot topic, the podcast relaunch on iTunes
and SoundCloud and we can begin to add other
types of geeky video content.
So he’s got some soft benefits there but
he’s basically articulated some benefits.
Now some creators put in very hard benefits,
in other words this is what I’m going to
do at this point here exactly.
As I’m looking at possible incorporating
this myself, I’m saying at what threshold
could I offer to pull the advertising from
YouTube?
Can I say that this revenue is going to replace
AdSense revenue or are there enough people
that I can dual publish or find another way
to strip advertising out?
That’s a hard benefit that you might appreciate,
you might not appreciate.
Or maybe you have direct email access to me
for questions, a certain number of questions
or a video conference, a single Skype video
conference that you get a chance to do based
on your patronage.
It’s very similar to Kickstarter Rewards.
You set different levels for this and there’s
nothing saying that patrons have to be only
individuals.
You can set up patron levels for companies
as well.
You could say I’m thinking of setting up
a level that might say if you want me to do
one of my screencasting tutorials on your
product, this is the level of patron that
gets that benefit.
So my mind is kind of firing in a lot of directions
as I’m trying to understand and trying to
figure out exactly the best way to approach
this.
You want to do it right.
I think you want to take your time.
Evaluate it rather than just throw something
up right away.
You want to go look and see what others are
doing.
So Chris has done a great job.
I’m going to take you into Tom Merritt’s
because Tom has been doing tech news for ages
and recently he was with Leo Laport’s [phonetic
00:06:25] team.
He did a year with Leo and now he’s gone
off and spun off onto his own.
He has a great success story in this space
and I think this is one of his main revenue
streams.
He does a daily tech news show and look at
that.
He’s only been up for a little while.
He’s got over 3,000 patrons and over $10,000
a month in revenue.
That warms my heart because I know he’s
got a rabid following.
I know he does a great job on his content.
Heck, I listen to him on a regular basis myself.
So here, he’s set up.
Let’s walk through his offer here just a
little bit to get a feel for the structure
of the Patreon offer.
It’s not a lot different from a Kickstarter
offer.
They recommend you start with a video that
describes all of the benefits of it.
Then you do a written summary of what you’re
all about, kind of like a bio.
Down the left-hand side, the milestones and
the goals, just like we saw with Chris Pirillo’s
but we can see that he has hit a few milestones
already.
His first one was $5,000 a month.
He basically upgraded the production, he upgraded
his studio.
At $10,000 a month, he made the minimum to
make the shows happen without ads.
So he’s now making enough revenue from his
supporters, from his audience, to tell the
ad networks to go away.
That is awesome.
Think about just the fact that you’re not
going to have all those little pop-up ads,
you’re not going to have to wait a few seconds
before the video loads when you view his content.
That is excellent.
Another milestone is video feed.
Now this amount we can do the kind of video
production we want to justify promoting an
official video RSS feed of the show.
So he’s going to upgrade the bandwidth in
and out.
Look at that.
I don’t think it’s wrong to think that
he can hit this level of $50,000 a month.
Then he says he’s going to take it on the
road.
He’s going to do roadies, road trips, with
his show.
So he’s got some lofty goals but he’s
already, I think, doing exceptionally well.
The beauty is think about this as if you’re
the producer of the content.
If your fans are your customer—they always
are; we know they always are—but if they’re
actually paying a little bit of money into
your jeans and that adds up to enough to keep
you in business, well then you could have
total editorial integrity.
You don’t need sponsors anymore.
Or you can get to the point that you don’t
need sponsors anymore, which really adds to
the editorial integrity which is a big problem
online because there’s kind of a fog about
what is paid for and what’s not paid for.
We see it all the time in the blogging community
with the mommy bloggers and the daddy bloggers,
what are they writing about that they’re
being given by the company versus what are
they writing about that they’re really interested
in themselves.
This creates a nice distance so I love the
concept of this model.
The accounting behind it, Patreon takes of
course a very small cut and people can pledge
any amount they want, as little as $0.25 or
$0.10 a month if they wanted to, I guess,
or per episode and it goes on up.
Certainly, tech is not the only type of channel
that there is on Patreon.
We’re seeing a variety of different things.
I see a few of these ones, these called ASMR.
They’re people that they talk and that creates
a sensory thing.
They talk about feathers brushing through
your hair and you kind of get the shiver down
your back.
It’s actually pretty cool.
They do a pretty neat job.
There are several people that are doing that.
We have a lot of composers and musicians that
are creating music in Patreon.
We have a lot of people that are vlogging.
Basically, there’s a really interesting
mix.
A lot of them are not making a lot of money
yet.
That’s kind of my fear.
I’m going to put it up and I’m going to
be up for three months and I’m going to
be at $120.
So there’s kind of a negative social proof
to that.
With Tom at 3,700 people willing to give him
some money, that is a lot of what we call
social proof.
There’s a lot of value in the fact that
he’s got valuable product that lots of other
people are willing to give money on.
So then I think my money might be well spent,
a kind of almost peer pressure to join in
on that.
I don’t know what the tipping point is that’s
going to cause fast growth or rapid growth
in that area or reasonable growth but it is
something that I’m sure we will find out.
So what’s my plan in growing my subscribers
to 100,000 subscribers and growing my bank
account to supporting me or growing the revenue
off this show to supporting me?
Well, I’m halfway through composing and
building my own Patreon page.
I’ll just show you where we are so you can
see what the steps are that you go through.
This is what I’ve got so far.
I’ve just been playing with the ideas and
haven’t decided on any of it yet.
So I’m working on getting advertising-free
videos at $4,000 a month—that sounds like
a big number right now.
Maybe I should make it $40 a month.
I don’t know—a weekly love show, which
is something I’d love to do—I’d love
to be able to broadcast a live show, something
where we really upgrade the technology and
start to deliver live and no, I do not trust
Google Hangouts Live as a delivery system
for this just yet—and then even a daily
live show.
That would involve me having staff.
That’s why the number is fairly large there.
Those are my goals.
‘
And I didn’t mention this earlier.
You also set benefits to individuals that
pledge each month.
At this point here, you get my undying gratitude
and your name mentioned within our supporter
page or something like that.
I’m still reading through what other people
are doing to get good ideas of what sort of
benefits and perks I can give to my supporters
as we move ahead but that’s kind of what
I have at this point here.
But it all formats into a nice, simple interface.
Let me go in and edit the page and just kind
of walk you through the steps.
You set up your page, choose what categories
you’re in, and upload a picture.
That’s not going to be the picture I’m
going to use; I’ll edit together something
a little bit better in Photoshop.
So you put all that together and then your
Patreon page which describes what you’re
doing.
I haven’t done anything on it at all but
this is going to be a URL that’s going to
drive people right to it, that’s going to
have an overall explanation of what DottoTech
is all about.
Then this is the one that I’ve been spending
the most time in.
It’s trying to figure out what my goals
might be and what might look reasonable.
I don’t know whether this is normal or not
but I think that I’ve got to take a step
back and determine whether or not my goals
should be ones that look good to others or
ones that are really my goals myself, whereas
if you put up a reasonable looking goal that
people think you can attain so they’re willing
to support it, there’s kind of that dialogue
playing in my mind.
At the same time, taking a step back and going
how much money do I need to really do that?
For me to cut out the advertising and everything
I’m expecting to get from YouTube advertising,
what’s that going to cost me and at what
threshold can I do it?
And there’s a beauty and a terror in this.
The beauty is right now most of my revenue
from YouTube is going to be coming from AdSense.
It’s awesome to have them but very scary
to have a single source.
So now I’m going to have a second source
but I don’t want it to cannibalize my first
source.
But I like this idea of setting up a second
revenue source and I know that I need to set
up a third revenue source as well.
That’s going to be something coming a little
farther downstream but this definitely has
the potential of being a good, solid second
revenue source that could probably end up
making more money than AdSense as we grow
if I do a good job.
You see the thing is again, if you do a great
job on your content, you have a compelling
story and people are willing to buy, then
more will buy and you should see natural growth
by just creating great content.
I know I’m rambling a bit on this.
And that boils back to what I like the most
about Patreon is it allows content creators
to concentrate on what they do best – create
content.
If I had good support on this or if we developed
good support on this, I can spend all my energy
worrying about telling our stories better,
finding better products to demo, finding better
candidates to interview, editing them together
better, making a better narrative of each
of the videos that I create.
I find that to be quite exciting.
You set up your rewards on the final page
here.
The final page of the whole process is setting
up the different rewards and those are the
extra things that you give to people based
on the level.
Now they’ve got a fairly robust backend
of the membership system.
Since I haven’t made mine live yet, I can’t
show it to you but you can email people.
You have access to send messages, send rewards,
and give access to people at different levels
based on the membership and that’s a big
thing that Patreon brings to the table, that
whole membership system.
Now the negative to this is I am not sure
that the subscribers in Patreon, that you
actually hold their contact information.
So getting them to cross post and cross promote
into your mail list and stuff like that, that’s
still something that I have to figure out
and I’ll do a little bit more research on
as I move ahead.
As I said, I’m about a week into my research
on it so I haven’t quite made all of my
decisions yet but I thought it was an interesting
enough topic that it would make for a fairly
compelling journey to 100,000 subscribers
entry.
Have you found it interesting?
Has this been good?
I hope so.
Please if you haven’t subscribed, subscribe
to us.
Down below is a Like link and depending on
when you see this, there might even be a Patreon
link somewhere in this video saying please,
please, please support me and help me continue
on with my quest to make a living from YouTube.
If I do say that, I think you should experiment
and see what it’s like to become a Patreon
supporter of DottoTech.
Don’t you think that would be a fun thing
to do to kind of wrap things up today?
That’s it.
This is an exceptionally long one, I imagine.
Thanks so much for spending time with me today.
I’m Steve Dotto.
Have fun storming the castle
