Monetizing Your Channel: What Is Your Channel Worth?
Have you ever wondered how much your channel is worth? Maybe you've thought about it but struggled to find an answer. Here we discuss everything you need to know.
Have you ever wondered how much your channel is worth? Maybe you've thought about it but struggled to find an answer, or maybe you have friends who are content creators and feeding you conflicting information... It happens, and often leaves you more confused than when you started!
Today we're going to clear up some common misconceptions and lay out for you exactly what matters when it comes to valuing your channel and getting involved with paid sponsorships. Whether your channel is big or small the same basic rules apply when determining what your rate should be, and how much you are likely to earn from sponsorship deals.
First off, let’s start with some common misconceptions and get those out of the way. Contrary to popular belief, your follower/subscriber count plays little to no role when it comes to valuing your channel or content. It is nothing more than a representation of how many people you convinced to click a button. A lot of people tend to follow creators based on a single piece of content they enjoyed, or to contribute to some milestone or follower drive like “I will shave my head at 1 million followers”. It can at best represent an estimated audience reach for a channel, but this varies massively from channel to channel.
Another common misconception is that having multiple recurring product sponsorships or company logos displayed on your channel will increase the value your channel holds to other sponsors or that it is a representation of your channel being professional. The most important thing for quality sponsors is the quality of your content and authenticity with your audience - you should be very careful about anything that might impact these. Taking any opportunity available and having brands plastered all over your channel can negatively impact your content and relationship with your audience, and ultimately hurt your chance of being contacted for larger opportunities in the future.
More about these types of sponsors later, let’s get into…
Your Channels Value
With a few of the misconceptions out of the way, let's talk about your channels value and how it is measured. There are 2 primary things about your channel that appear in almost every single paid sponsorship. Your Audience and Your Content. Let’s start with your audience.
Your audience is probably the single most important factor to the value of your channel and depending on your platform, this is measured in ACV (Average Concurrent Viewers) or CCV (Concurrent Viewers) for live streaming platforms, and AVV (Average Video Views) for video on demand platforms. These averages are generated over a set period of time, usually 30, 60 or 90 days. For example, we’ll look at your average viewer count for all your streams/videos for the last 30 days. This is your channels ACV/AVV and determines the rate at which sponsors are willing to pay you.
Your content is the second biggest factor and mostly determines which sponsorship opportunities you will be selected for. As an example, if your channel focuses on a single FPS game, it is unlikely you will be selected to participate in a sponsorship for an RTS game.
For variety channels who publish a plethora of content spanning many different genres, we will always look at your ACV/AVV for the content type that matches the sponsorship.
For example, your variety channel may have an ACV of 3,000 for all of your content, but if the sponsorship is for an RTS game, we will determine a “Target ACV” based on viewership when you stream RTS games, which may only be 500.
There are many other factors about your channel that contribute to the selection process, but these are by far the 2 most important.
Switching to variety based content doesn't neccesarily mean you will earn more from your channel or be better off. Many highly focused channels find content switching has a negative impact on viewership, which ultimately lowers their target ACV. You know your audience better than anyone else, don't try to force variety if it isn't right for your community. See our article: Targeted Content: How Content Switching Affects Viewership for more information.
The Good, The Bad and The Ugly
At Gamesight, we have managed and measured tens of millions of dollars in creator campaigns on various different platforms and we consistently see confusion from creators about what their channel is worth, and what their rates should be for sponsored streams and dedicated videos. This can be broken down into 3 specific categories.
The Big Creators: Often times bigger creators will set rates based on their “celebrity” status, follow count or one-off deals they received and are unwilling to negotiate a price that makes sense for everyone.
The Growing Creators: In the middle of the field are channels who have seen growth and are now being presented with more sponsorship opportunities, aren’t quite sure what their rates should be and will usually base it on their last paid sponsorship.
The Smaller Creators: Almost always undervalue themselves and have rates much lower than expected and are generally just excited to be approached for an opportunity.
Knowing your rates is vitally important to successfully monetizing your channel through paid sponsorships. Your set rates can make or break the financial success of your channel. For smaller channels who undervalue themselves, this isn’t too much of a problem, as we will always bump the rate up to match estimated rates. For some channels who overvalue themselves and are unwilling to negotiate, it can leave a lasting impression and result in them not even being considered for future opportunities.
With your rate in hand, you should always be willing and able to explain your rate should it not be inline with a sponsors expectations. Remember, a sponsors rate may be based on an ACV/AVV for something outside of your channels primary focus. The sponsorship needs to make sense for everybody involved. The easier you are to work with, and the more flexible you are with your rates, the more likely you are to be offered more sponsorship opportunities. A happy relationship is a lasting relationship.
So, What Is My Channel Worth?
The Industry Standard
We operate all of our paid sponsorships within industry standard rates. That rate is generally between $0.60 to $1.00 per view hour (CPVH - Cost Per View Hour) depending on factors like your channel's fit with the sponsor and how engaged you are with your audience. As a rule of thumb, you should value your channel at a CPVH of $0.8 and be flexible with your rate, within the $0.6-$1 range.
We have seen creators provide quotes as low as $0.05 per viewer hour - which we happily bumped up to to our estimated rate of over 10x the original quote. On the other end we have seen rates all the way up to over $30 per viewer hour - which is wildly above the industry standard and was rejected. Our hope is that by providing more transparent information about standard rates we can empower creators to be more confident in their pricing when they are contacted by sponsors.
Your Stream Rate
Calculating your rate for paid sponsorships is straightforward - take your ACV and multiply by 0.8 for a one hour sponsored stream. So, if your channel has an ACV of 600, you get a calculated rate of $480 per hour. If you do a 2-hour sponsored stream, your rate would be $960.
Sometimes this rate can vary, but it is very rare that anything over a $1 CPVH will work out.
Your VoD Rate
For content like YouTube videos, it's essentially the same rule. The average views on your VODs over 90 days is your AVV. You should multiply your AVV by $0.05 to give you your rate. This rate will be suitable for a 10-minute dedicated video. You can then adjust this accordingly on the sponsorship deliverables (content requiring additional preparation or creative effort can often justify significantly higher rates).
For a 10-minute dedicated YouTube video, with an AVV of 100,000, you would land at a rate of $5,000 (100,000 x 0.05 = 5,000).
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Another type of “sponsorship” that is quite popular at the moment comes in the form of discount codes for things like energy drinks and other gamer focused products. These are basically affiliate programs painted as "sponsorships" or "partnerships" with an arbitrary follower/subscriber count requirement to imply some exclusivity. In almost all cases, these products are plastered all over a channels content, ticker messages in chat, links in the about section and all over their social media accounts.
Creators will earn a percentage of sales generated from their link or code as a commission. This type of performance-based marketing encourages creators to put these products everywhere to increase their earnings, and the brands get their products advertised on your channel for little to no cost to them. Think about your channels CPVH rate we calculated in the last section, and then how many hours that brands logo is presented to your audience. If your CPVH is $480 and you earn $50 from having their logo on your stream for 8 hours a day, you've valued your channel at $0.01 per view hour.
As we discussed above, the most important assets to your channel are the quality of your content and connection with your audience. Overemphasizing affiliate-style sponsorship on your channel can negatively impact the quality of your content in turn hurting your relationship with and growth of your audience.
It's Not All Bad
That's not to say these type of affiliate programs are bad, far from it. They're a great way to bolster your earnings and can be a really great way to share products you love with your audience. You just need to be measured with how you manage promotions on your channel.
You have invested an enormous amount of time and energy to grow your channel. Trying to extract value from it by treating your channel like open ad space massively under values what makes your channel unique - you! Look for sponsorships that will help you grow and bring great content to your viewers rather than one that is just trying to capitalize on the relationships that you have built.
Which brings us to our next segment…
Think Like A Sponsor
When it comes to monetization and making a living from content creation, it’s important for you to think like a sponsor. Ask yourself what you would want to see in a channel promoting your products. Here are a few things to ask yourself.
- Is your audience mostly passive lurkers over engaged?
- Are you missing a strong sense of community with your viewers?
- Are your rates above industry standards?
- Is your content only suitable for a niche audiences?
- Is your audience watching for your gameplay skill exclusively?
- Is your content highly controversial?
While answering yes to any of these points won’t be the sole deciding factor in the opportunities presented to you, the more you answer yes to, the lower your chances are of being a good fit for future opportunities.
Knowledge Is Power
Not just a famous quotation, but a key to success. Understanding how your channel and the industry as a whole works is the key to turning your content into profitable income. Below are a few key points to remember.
- Your audience is your product. Companies pay to put their products in front of your audience and have you share your honest thoughts, not just because you’re cool and make good content.
- Being engaging and making good content matters when growing your audience, raising your ACV/AVV, and keeping people coming back
- Taking part in a lot of “coupon code” sponsorships may earn you a little money, but you should be careful to not over do it. It can be a turn-off for your viewers and hinder future growth.
- Toxicity matters. Nobody is going to work with somebody who constantly talks negatively about their industry or appears to not enjoy what they do.
- Communication and building a reputation with the sponsor matters. If you’re difficult to work with, slow at responding to messages, sponsors are going to prefer working with somebody else.
- You channel is always changing. Pay attention to what works, why it works and how your viewership and rate is changing each month.
- Be skeptical of any sponsor that wants to exert too much control. You know your channel better than anyone and a good partner will recognize that.
- Your audience is the single most important factor of your channel. Keep them happy and maintain your trust. Don't risk hurting that connection with a bad sponsorship deal.
Hopefully this article will help you better understand how to monetize your content, be presented with more opportunities, and help you focus on the things that really matter. Every channel and every audience is different though. Understanding what makes yours unique is key to growing the value of your channel.
If you have any questions, or just want to keep up to date with the latest gaming trends, you can find us on Twitter @gamesight