Imagine this: you’re browsing through your feed and see a content creator gloat about their new video getting one million views or reaching 100,000 subscribers. Perhaps one will ask, ‘Are they rolling in cash now?’ Like most people, you could be thinking that YouTube channel payout depends on how many clicks a video attracts or how many followers a creator has. Well, spoiler alert: Unfortunately, that is not exactly the case. But instead, let’s catch fire to these myths and reveal the actual workings of the YouTube monetization engine.

Myth 1: “It’s All About the Views”

The first myth to dispel is that YouTube pays you money depending on the number of viewers you have tuned in to your videos. But as we have discovered, views alone do not directly translate to putting money in your pocket. Just imagine having a post with a Million views from people in places that advertisers do not care about. Or maybe, your video does not have any advertisement placement at all?

Contrary to the promises, views can only positively impact revenue when they are accompanied by paid ad placements. You can reach a million people, but if no one of those million people pays attention (or clicks on) advertisements, your returns will likely be minuscule. Opinion is a means to generate revenues but opinion by itself is not the ultimate answer. Therefore, viral videos are a positive factor but do not guarantee income.

Myth 2: “More Subscribers = More Cash”

Yet another myth is that with more subscribers the owner of the channel directly receives dollars from YouTube. This has made people think that with high subscribers they are likely to receive more money. In fact, YouTube doesn’t pay creators based on the number of viewers that watch the content or the number of subscribers that follow the channel. Surprised? Don’t be.

Subscribers are important in creating a base audience whose interest is likely to see, interact and share your material. But even having millions of subscribers will not bring you some wealth within a day provided they are not coming into interaction with the content. People receive ads not only when they are subscribed. What really counts is the number of times your video gets viewed and the interaction level, people have with the advertisements.

How YouTube’s Money Machine Actually Works

Here’s where we take the guesswork out of the often confusing, chaotic world of digital marketing. Advertisement revenue dominates the monetisation method of YouTubers who mostly use Google AdSense; this is an advertising service that runs Google ads on videos. Of course, the critical KPI that adversely affects revenues is not the overall number of views or subscribers but the number of watch-time minutes for the ads and even more so, the minutes for the interactions.

Ad revenue is typically generated in two main ways:

1) CPM (Cost Per Mille): This is the money that a creator gets paid each time a thousand ad views have been made. The particularities include such aspects as the topic of a video, the zone of marketing promoting, and the advertisers. The niches which have higher CPM include finance, technology and similar fields because people or companies are willing to pay heavily for their advertisements.

2) CPC (Cost Per Click): If a viewer not only watches but interacts with an ad for instance clicking on it, then it is more beneficial to the advertisers and thus the creator earns more.

YouTube gets a proportion of this revenue (culturally, 45%) whereas the rest 55% is attributed to the producer. In other words, you only make money based on the ability to display ads to audiences and have them interact with it.

Apart from AdSense earnings, it is also possible for a creator to incite other income sources such as sponsorships, merchandising, and crowdfunding platforms such as Patreon. However, when speaking of YouTube proper, ads are much more essential to the platform in times of plenty.