...Kay has earned $100,000 to $300,000 in each of the last three years. She has 1 million subscribers. That number is merely the gross revenue, however.
She makes 20 videos a week, all of which are filled with ads via Google's automated YouTube partners program.
Kay likely gets about $7.60 per 1,000 ad views, down from $9.35 in 2012, according to TubeMogul, which buys and sells video ads.
Ads are only run on a minority of videos shown. Roughly, a video creator will earn $2,000 for every million views. «And then YouTube takes 45 percent,» the Times notes. (The IRS will take its cut of the remainder, too.)
Kay spends $500-$700 a week on editing costs.
In other words, Kay is probably getting by on less than 50% of what her videos make in gross revenue. In a $100,000 year, she might be looking at $21,000 annually, after YouTube's cut, taxes and editing costs, according to our back-of the-envelope math ($100,000 minus $45,000 for YouTube, minus editing costs at $500 per week for 50 weeks, minus 30% for the IRS).
Jason Calacanis, a well-known Silicon Valley entrepreneur who was part of YouTube's professional partners program, said that to make 10 videos he would spend $25,000 to $75,000 in costs before a dime was earned in advertising:
We were huge fans of YouTube… but we are not creating content anymore because it’s simply not sustainable.
YouTube is an awesome place to build a brand, but it is a horrible place to build a business.