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1 thousand true fans vs 1 million casual viewers
(2 min read) I'll prove that you make more from 1,000 true fans today than from 1,000,000 casual viewers.
Avi Gandhi
August 13, 2024
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Would you rather have 1,000 true fans or 1,000,000 casual viewers?
Most people have heard of the idea that a Creator can make a living from 1,000 True Fans - a concept popularized by Kevin Kelly back in the early days of the Creator Economy.
The idea was simple - if you have 1,000 true fans and you can make $100 profit from each of them in a year, you can make a decent living.
More recently, former a16z Creator Economy investor Li Jin penned an essay arguing that you actually only need 100 true fans, because the tools and tactics now exist to get true fans to spend $1000+ a year.
That’s certainly doable, and we’ve interviewed several Creators - like Jay Clouse and Jessy Grossman - whose very high revenue relative to follower count are proof.
But of course, we all want a million pairs of eyeballs on our content.
Why wouldn’t we? Wouldn’t our revenue be much higher with a million views per post, even if they were casual?
Well…we can actually determine that. (WARNING: Math 😈)
Let’s get into it!
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Assumptions
Creator A
1,000,000 YouTube long-form views per video (casual viewers)
AdSense revenue per thousand views (RPM) = $5
4 videos per month, 48 videos per year
Total annual gross profit = 48 videos x 1,000,000 views/video x ($5/1000 views)
= $240,000
Creator B
1,000 paying subscribers (true fans)
Membership = $100/month
Platform fee = 10%
Total annual gross profit = $100/sub/mo x 12 mo/yr x (100%-10%)
= $1080/sub/year * 1000 subs
= $1,080,000/year
If we’re following the Li Jin monetization model (where high value communities pay $1,000+ per year), 1,000 true fans is worth 4.5x what a YouTube channel getting 1 million views per video is.
But: What if you can’t get your fans to pay $100/month?
Anything over $22.22/mo still makes Creator B more than Creator A. Also, at $100/mo, Creator B only needs 223 true fans (subscribers) to make more than Creator A.
What if Creator A added brand deals?
If we assume a $10 RPM on the brand deals (so $10,000 per video - pretty decent for this scale), and a 100% sellthrough rate:
$240,000 + (48 videos / year x 1 brand deals/video x $10,000/deal)
= $720,000/year
Creator A is still earning less than Creator B…and by the way, almost no one has a 100% sellthrough rate.
We haven’t even talked about other sources of revenue for Creator B - and we won’t, because I’ve already made my point.
The vast majority of Creators will never get to an average of 1 million views per post. That’s just a fact.
Thanks to all the monetization opportunities out there, for those Creators who are willing to learn and test and adapt and build…and focus more on profit and less on audience growth….
There’s no reason you can’t get the financial success you’re looking for.
Poll
What would you prefer? |
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Written by Avi Gandhi, edited by Melody Song,
powered by TheFutureParty
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