Why would a YouTube creator making millions of dollars, that has built up a strong audience and notoriety in their space need funding? Despite the creator economy and YouTube space being incredibly large and powerful the business model of creators is less covered. The earnings of creators are not as straightforward as traditional businesses and often hard to measure making it difficult to understand. Let’s break down the business structure for creators to discover why creators would want funding and how they may use it.
Creator Revenue Streams
To start we should have a basic understanding of the typical revenue streams for creators. Understanding the full earnings of a creator can be difficult as there is often very little disclosure and consistency on earnings. We are grouping the types of revenue a YouTube creator can make into three segments to help build a clearer picture of their businesses and why they may want a large sum of cash.
Here are three common revenue streams for creators:
- AdSense is the payout from ad placements on videos posted on the creator’s YouTube channel. This is arguably the most predictable and trackable earnings from a YouTube creator. YouTube analytics has a specific algorithm that can show earnings from each channel and video making it easier (and more transparent) for lenders or partners to track earnings.
- Sponsorships and Partnerships are more visible to the general audience as this is where you see creators promote other brands, products and services to their audience. The tricky part with this type of revenue stream is that there is no consistency with how much these placements pay, or the frequency of payments. On the revenue tracking side, this is up to the creator to manage and doesn’t filter through the same revenue analytics as the YouTube channel.
- Merch Sales, Side Businesses and Secondary Channels are all other streams of revenue a creator may have. Multiple revenue sources is very common especially with bigger channels as it is a great way to interact with their audience and build a stronger following (and income). These other revenue streams often operate as separate businesses, completely aside from the YouTube channels that may have built up their following.
Earnings from the videos uploaded can be incredible but there are costs associated with creating the videos. Let’s look at what it costs of what goes into creating some of the YouTube videos that we all watch.
- Equipment: Many channels, especially back in the early days of YouTube started with just a webcam or a simple hand-held camera. Now the expectation of video quality is much greater which requires more substantial filming equipment. This can be everything from lights, multiple cameras, microphones and backdrops. There is also the software side that can include editing programs and storage fee for all the footage that has been captured. All this comes at a cost and will need to be replaced or updated as time goes on.
- Production. Every creator has their content niche and within it there will be different needs and costs to put together a video. If you are a travel creator it may be flights and hotels. If you are a cooking channel it may be cooking appliances or kitchen space. It could be props and staging for prank videos or equipment for renovation or repair videos. As a society we are familiar with traditional TV and film having high production costs. YouTube videos are seeing millions of videos and often surpassing the views of traditional videos. The production costs of YouTube videos can be similar in scale to traditional film and can rack up quite the bill before the video is live and generating revenue.
- People: YouTube creators are often thought of as one-person shows. While many channels often start off like this, as they grow and demands for their channel increase the channel’s turn into proper businesses with a team of people to help put videos together and run the business. Creators have videographers, editors, managers, production teams, assistance and more depending on their size and content needs. The earnings from each video don’t go straight to the pocket of the 1 or 2 people who may be the face of the channel but go towards paying for the entire team of people who helped put it together.
Investing in Channel Growth
With all the costs that videos and channels may require the revenue received from the videos can be dispersed fairly quickly. The earnings your channel generates will likely cover the costs to continue what you are currently producing but what if you are looking to grow? For creators looking to level up their content or branch out with new ideas, the upfront cost may be more than they are willing or able to take on.
Most traditional film studios and businesses will have investors step in to help fund new projects and growth in hopes to see a share in the profits when the project goes live. Traditional banks are a low cost and great way to get funding for small businesses, but often don’t understand the creator revenue models making it tricky or impossible to get approved for funding.
Creators are stuck with the dilemma of how to grow their channel, and quickly, but often not sure where to turn to to get the funding. This can lead to having to wait months or years to build up enough savings to invest in new projects or selling off parts of their channel in hopes of getting enough capital to invest in the projects they have been dreaming of.
This is where Breeze comes in.
Breeze as a Funding Option
Breeze saw the need for capital and the lack of creator friendly options available - so we created one.
We look directly at your YouTube AdSense revenue and give a cash advance based on your channel analytics. Your sponsorship, partnerships and other revenue streams remain completely in your control. Want to see how much funding your channel may be eligible for - check out our funding calculator!
The idea is that with quick and easy cash from Breeze you will be able to retain full ownership and creative control to grow your channel as you wish. Whether you want to use the funding for investing in new equipment, growing your team, starting a new channel the decision is yours! You can choose how to use the funding while keeping full creative control of the videos and brand you have built.
What does this funding cost?
The deal structure is simple and transparent. We have a set repayment fee and negotiable term so that whether you are a massive creator or a mid-size creator you are getting the same deal. We are not taking ownership over videos or shares in your channel which means that you as the creator keep the full upside to your channel’s growth.
Get the funding you need to accomplish the goals you have been dreaming about!