If you’re looking for the top ways to make passive income on YouTube, you’re in the right place! In this article, we break down the best YouTube passive income ideas like YouTube ad revenue, affiliate marketing, and sponsorship deals so you can increase your cash flow and work towards financial independence. YouTube is one of the largest marketing channels in the entire world with 2.6 billion users, so it’s no surprise there are channels that pull in millions of dollars in yearly revenue. Many of those channel owners even make that kind of money without actively working on their business.
Local lead generation business owners are also absolutely killing it in the world of online business. Local lead generation is a passive income idea where you rank niche business websites for local markets, and then sell the leads the websites generate to local businesses who can perform the service. You really only need a handful of lead generation websites to bring in a six-figure yearly revenue stream. Each website can make thousands of dollars a month, and there’s little overhead or maintenance once you get them to rank. Both local lead generation and YouTube offer great potential for passive income in 2023.
1. YouTube Partner Program monetization features
The YouTube Partner Program is what most people associate with how to make passive income on YouTube. The program offers many opportunities to make money directly through YouTube like AdSense, Channel Memberships, and Super Chats. However, you first need to apply for channel monetization through the program. To be eligible to make money through the YouTube Partner Program, you need to:
Once you become eligible, the YouTube Partner Program can be quite lucrative. Some creators like Mr. Beast earn millions of dollars a month just from platform revenue. Yes, YouTube can make you a millionaire if your channel idea really takes off, as many YouTubers have already found out.
AdSense is an ad network through Google. YouTube content creators that participate in AdSense give permission for advertisers to use space in their content to run advertisements. Millions of advertisers in the Google AdSense network compete to run ads on YouTube creator videos. AdSense uses an auction to determine which ads appear in your videos and how much you earn. The more advertisers that want to run their advertisements on your specific video, channel, or niche, the higher the price goes for your advertising space and the more you get paid.
YouTube Premium members get ad-free viewing on YouTube, so you can’t make advertising revenue from them like you do with normal viewers. Instead, YouTube does a revenue share with you for the membership fee. YouTube Premium costs $11.99/month for subscribers. Of that fee, YouTube takes a 45% cut while the other 55% is split among the YouTube creators that subscriber spends time viewing. The more of your channel content that a Premium member watches, the more of their monthly YouTube Premium fee your channel earns.
YouTube channel memberships allow viewers to access paywall content on your channel by paying a monthly membership fee. You can give your members access to exclusive perks like public emojis, badges, and other goods. Channel memberships are not eligible for music-based channels, and the majority of your videos must not be set as “Made for Kids”.
Super Chats & Super Stickers
Super Chats and Super Stickers allow viewers to pay your channel directly to highlight their messages or use animated images in the live chat feed of your video. During a live video or Premiere video, your fans can pay you $1 to $500 to use Super Chats and Super Stickers. However, YouTube takes 30% of your revenue as its cut and leaves the channel owner with the other 70%.
Note: If your goal is to make passive income, you can only use this method for Premiere videos because earning money through live videos is active income. By setting all your videos to publish as Premiere, you can let your viewers enjoy Super Chats and Super Stickers without having to be actively involved.
Super Thanks are fun animations your viewers can buy to show support for your channel that are shown over the top of one of your videos. Paying for a Super Thanks also lets the buyer post a colorful and distinct comment in the video comment section. Like Super Chats and Super Stickers, Super Thanks can be between $1 and $500, and YouTube keeps 30% as its cut.
YouTube Shopping is a feature that lets you connect your own store or promote products from other brands in your videos and Shorts. You can tag products in your videos, use a product shelf overlay below your video, or put them in the end screen of your videos to drive sales. This is a popular option for channels that have channel merch to showcase their products where viewers can easily see and buy them.
2. Affiliate marketing
Affiliate marketing is how to make passive money on YouTube by promoting products from brands for a commission. With affiliate marketing, brands pay you for helping to promote their products. In your YouTube video, you can mention the affiliate product your promoting and direct your audience to the video description where you paste the affiliate link for them to use and buy the product.
An affiliate link is a special link that tells the brand where the sale came from so they know your video brought the customer to their site to make the purchase. Most brands have an affiliate program where you can get your affiliate link. You can find thousands of affiliate programs through affiliate networks like ClickBank, Amazon Associate, or CJ Affiliate.
Affiliate marketing is how small YouTubers make money. You can start recommending affiliate products in your videos right away. Getting accepted into affiliate networks is easy, and there are many brands that will let you promote their products without any previous history of digital marketing success.
Sponsorships are arrangements that creators make directly with a brand to promote the brand’s products in their video content. If you have a large audience on YouTube, brands in your niche are likely to reach out and offer to pay you to mention them in your content. Unlike affiliate marketing, where you get paid for each action you drive through your affiliate link, brands pay you a flat rate for advertising space in your video with sponsorships. A study by Klear of over 2,500 YouTube influencer channels found the following sponsored video payout averages.
An endorsement is an agreement between a YouTuber and a brand for the YouTuber to promote the brand's product and voice their approval for it. Whereas a sponsorship is just the promotion of a brand and its offer, an endorsement requires that the YouTuber recommend the product from their own experience with it. Like sponsorships, you receive a flat fee for endorsing products in your videos.
5. Digital products
Using YouTube as a marketing channel for digital products is another effective way to make passive income. Digital products like courses you’ve created or templates you’ve made are items you can sell repeatedly for residual income. Unlike physical products which you can only sell once, you can sell the same digital product unlimited times to different customers. You just need to put the resources into making the product one time, and then you can enjoy earning recurring revenue from it for years to come.
Some examples of digital products you can create and promote to make passive income from your YouTube channel include:
If you are into creating digital products specifically food photography and recipe to sell for bloggers and YouTubers, you can check out my article about Content Creator Lab.
Print-on-demand is how to make passive income online with YouTube by promoting channel merch that only prints when someone buys the product. Print-on-demand is an order fulfillment method where generic items like t-shirts are printed with your custom designs only once a customer makes the order. This is great for passive income because the print-on-demand service handles the printing and shipping for you so you don’t have to hold any inventory.
Basically, you just give them your design, promote the product in your YouTube video, and then earn revenue when viewers watch the video and want to buy your products. There are many print-on-demand services, but Printful and Printify are two of the most popular. Print-on-demand is especially a good money-making idea for artists, since designing is what they are good at.
Patreon is a membership platform that gives fans an affordable way to donate to their favorite creators and get additional perks out of their contributions like exclusive content not found on YouTube. Many YouTubers use Patreon to provide their fans more value and earn additional income.
3 Strategies for YouTube Content Creation
1. Create your own YouTube video content
Creating your own YouTube content is how you earn money from YouTube without investment. Millions of YouTube channel owners create videos using just their own time and skills. You can get video editing software to make YouTube videos by downloading them from the internet. Although there is high-quality expensive software on the market like Final Cut Pro or Adobe Premiere, you can also find free video editing software like Shotcut or iMovie.
Smartphone cameras are so good these days, you also don’t even need any expensive camera equipment to make videos. In fact, the majority of videos uploaded to TikTok are filmed with smartphones, and people spend 95 minutes per day binging videos on the social media platform, according to Influencer Marketing Hub.
If you don’t want to appear in your videos, just use stock footage. Many websites like Pixabay even offer free stock footage you can use to get started. Once you upload a video to YouTube, it has the potential to attract views forever. By incorporating some passive income ideas mentioned above, a video you create can continue to generate revenue for years after you publish it.
How to create and publish your own YouTube videos?
- 1Choose a niche to focus on and create a YouTube channel with your Google Account
- 2Do research to find trending or low competition YouTube channel ideas in your niche
- 3Film your content or find relevant stock footage to use for your idea
Use video editing software to organize your video clips
Add enhancements like music, text, and sound effects
Upload the video and use YouTube SEO in the title and description
Publish the video to YouTube and analyze audience data to optimize future videos
2. Start a YouTube automation channel
YouTube automation is a business model where you fully automate the operations of a YouTube channel by using tools and hiring freelancers. Many find YouTube automation one of the best passive income ideas overall because all the income you make from a YouTube automation channel is passive. YouTube automation channels make faceless YouTube videos that use stock footage and voice overs to create interesting content to hooks viewers. Some even do YouTube automation without making videos. Therefore, you don’t need to be involved at all with the video creation and can outsource the entire process to a team of remote freelancers from websites like Fiverr and Upwork.
YouTube automation channels like Alux generate hundreds of thousands of dollars a year in ad revenue alone. However, if you want to start making money from YouTube automation, you need to have money to invest. It can take about two years before a YouTube automation channel starts generating revenue. Considering that each YouTube video costs anywhere from $30 to $200+ and you should publish at least one per week, you should have at least a few thousand dollars to start a YouTube automation channel.
How to start a YouTube automation channel?
- 1Choose a niche to focus on and create a branded YouTube account so you can share management access with multiple people.
- 2Hire a high quality automation team to handle channel management, research and optimization, script writing, voice over, video editing, and thumbnail design.
- 3Set your team up with workflow management tools like Asana or Trello to organize and schedule a content calendar.
- 4Incorporate YouTube optimization tools like Tube Buddy or VidIQ to make your team more efficient and improve results.
- 5Leverage multiple YouTube monetization strategies to diversify and expand your income stream.
- 6TIP: Join online courses like the YouTube Business Academy to acquire enough knowledge on how you can start a YouTube automation channel cost-effectively.
3. Re-upload TikTok videos onto YouTube Shorts
You can make money on YouTube without making videos yourself by simply re-uploading the videos of TikTok creators. In fact, YouTube guru Dave Nick said he used this exact method to make $36,000! You can either do this yourself or pay someone from Fiverr a few hundred bucks a month to do it for you.
Re-uploading TikTok videos onto YouTube is the easiest way to make money from YouTube because you don't have to do the hard work of making videos. You just take content from popular creators, give them credit for their work, and make money by building a valuable traffic source you can promote to.
How to make money by re-uploading videos from TikTok onto YouTube?
- 1Go to TikTok and copy the link of the video you want to upload to your YouTube channel
- 2Use a TikTok downloader tool like Snap Tik to download the video
Go to the YouTube Studio and upload the video onto your channel
- 4Give credits to the actual content creator in both your title and description and add your email address to they can reach you to remove their video if they have an issue with it
Grow your channel subscriber count by uploading at least 1 to 4 videos/day
- 6Use the community tab of your channel to post affiliate links or let brands pay you for sponsored community posts
Can you make a living off YouTube?
Yes, you can make a living off YouTube. However, you’ll likely need to spend less than the average American household to live within your means if YouTube is your only income source. According to The Ascent, the average American household spends $5,577/month. However, Yahoo Finance notes that the average YouTuber made $4,616/month in 2022. Although that amount would certainly be a welcome passive income stream for anyone looking to make extra money, it’s not enough to live off of for most situations in the United States.
Nonetheless, it can still be a decent source of income. It even is a good passive income idea for stay at home moms, artists, and young adults.
What YouTube content makes the most money?
What does it take to make $1,000 on YouTube?
It takes publishing consistent, high-value content for 1 to 3 years to make $1,000 on YouTube. According to Finance Quick Fix, the average channel gets to 1,000 subscribers in around 22 months. 1,000 subscribers is an important milestone for monetization through the YouTube Partnership Program. Therefore, most channels don’t even meet the requirements to start making ad revenue until almost two years of publishing content on their channel.
However, once your channel is monetized, your earnings depend on how many views you can get. According the KeywordTool.io, the industry average for YouTube views is $2 per 1,000 views. Therefore, you can make $1,000 by getting 500,000 views.
How many views on YouTube do I need to make $1,000 a week?
You need two million views a month on YouTube to make $1,000 a week. That’s just from the YouTube Partner Program. If you consider other monetization methods beyond just YouTube ads revenue, two million YouTube views a month could make you substantially more money per week.
Should you use YouTube to make passive income?
YouTube can be a great passive income opportunity for those who know how to set their business up the right way and have patience as their channel gains traction. You make passive income on YouTube either through publishing a bunch of content to get into the YouTube Partner Program and then sitting back while your video continues to get views or by outsourcing channel tasks to freelancers.
However, not everyone has the time or money to start a YouTube passive income business. So many YouTubers quit after they realize how competitive it is. They start searching for how to make passive income on Amazon, or with another business model like local lead generation.
Of all the passive income opportunities, I’ve found local lead generation to be the most legit. You can get a local lead generation website to rank in around six months or less, and start generating thousands of dollars in passive income a month. A local lead generation website is like a piece of virtual real estate and businesses are your tenants.
However, unlike actual real estate, you don’t have to pay hundreds of thousands of dollars to buy the land and upkeep your property. It costs you a fraction of that to pay for minor costs like web hosting and your domain name, and you can make thousands of dollars from each client every month! Are you ready to start making passive income online?