How YouTube stars are redefining the entrepreneur

09 July 2015 -

Raking in the kind of revenue that traditional micro-startups can only dream of, YouTube stars have used the online landscape to reimagine business models

Jermaine Haughton

YouTuber Felix Kjellberg has become the latest niche sensation of the social media realm to hit a winning streak in the mainstream media, after Swedish newspaper Expressen revealed his channel PewDiePie earned more than £4.5m last year.

Launched in 2010, PewDiePie largely features clips of Kjellberg playing videogames while delivering running commentaries – his rambling delivery often peppered with random vocal noises and colourful language. His presentation style is part of the “Let’s Plays” movement, whereby YouTube-registered game fans make money by placing targeted ads next to their videos via Google AdSense.

As if to underline his popularity, Kjellberg posted a video on Tuesday called Let's Talk About Money – specifically about the revelations of his finances – which received 1.6m views in less than 24 hours. While YouTube’s terms and conditions forbid creators from disclosing how much they earn, Expressen was able to work out the value of Kjellberg’s haul by checking the annual report of his company Pewdie Productions. Indeed, Kjellberg’s channel has become so well known that it even has its own logo – the so-called “Brofist” (see left) – which appears on most of its content.

Since it emerged in 2005, YouTube has rung seismic changes to the dynamics of culture, music and TV. On the way, it has given birth to a host of wealthy and famous content creators, with Kjellberg a prime example.

According to a recent answer posted on Quora, the majority of big-brand YouTubers earn their money through the CPM model, whereby advertisers pay a certain price for every 1,000 “impressions” of an ad on a webpage. Video ad-buying software company TubeMogul says the average CPM rate on pre-roll ads in 2013 was $7.60 (£4.90). However, content creators say YouTube also takes 45% of the revenue.

The money and fame that YouTube stars have acquired has allowed many to extend their reach into other businesses. Starting out by posting videos of makeup demonstrations and eventually launching an entire lifestyle brand through the platform, YouTube star Michelle Phan recently announced that she is preparing to release a digital comic. Set for launch later this year, in partnership with digital publisher LINE Webtoon, Phan’s 26-chapter online graphic novel The Enchantress will chart the tale of a singer with supernatural powers. Phan has already used her YouTube presence to release a book, a cosmetic line with L'Oreal and a makeup subscription service.

Here are five other, big-hitting YouTube stars who have really made an impact – and how they did it…

1. Blucollection

With 2.2 million subscribers and 3.9 billion video views under its belt, Blu Toys Surprise Brinquedos & Juegos is one of YouTube’s leading channels – even though it features a grown man playing with toddler’s toys, such as Play-Doh. Most popular are the channel’s playlists reviewing film-inspired toys, such as Pixar’s Cars collection. (Source)

2. LittleBabyBum

Derek Holder, who runs the channel with his wife, produces YouTube-exclusive, animated nursery rhymes – earning him anything from $845,500 to $13.5 million per year. While Disney’s official video for its insanely popular Frozen track Let It Go has been watched more than 430m times on YouTube since it came out in December 2013, Holder’s Wheels On The Bus trumps it with almost 440m views since it was published in August last year. (Source)

3. PopularMMOs

Generating up to $12m in annual revenue, this channel ranks alongside PewDiePie as one of YouTube’s most popular videogame commentary resources. Specialising in live-streamed gameplay on the child-crazing sandbox construction game Minecraft, PopularMMOs rakes in hundreds of millions of views every month.

4. iamOTHER

Embracing clothing, music and fashion, the iamOTHER brand – founded by musician Pharrell Williams – also comes equipped with a very popular YouTube channel. As per Pharrell’s ethos, the brand serves as a playground for creatives who consider themselves innovators and outcasts. With 1.4 million subscribers, the channel peaked last year with the official posting of the rapper-producer’s music video for his song Happy, which notched up almost 690 million views.

5. JennaMarbles

Reportedly making around $350,000 a year off her Youtube channel, star Jenna Mourey posts videos of comedic observations about the complexities of being a young, Millennial woman. Her elevation into the YouTube A-List began when her video How To Trick People Into Thinking You're Good Looking went viral five years ago, gaining 61 million views – and copious mainstream media coverage.

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Image of Felix Kjellberg courtesy of Helga Esteb / Shutterstock.

Image of the PewDiePie "Brofist" courtesy of the Wikimedia Commons.

Image of Michelle Phan courtesy of the Wikimedia Commons.