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Making money from YouTube: Is it a mystery?

Bacon plus bacon plus bacon equals YouTube success.
Bacon plus bacon plus bacon equals YouTube success.

David Lazarus — of the Los Angeles Times and also our go-to guest host for "AirTalk" and "The Patt Morrison Show" here at KPCC — had a recent column in which he pondered the moneymaking prospects of You Tube:

Making money from YouTube videos — it's something I've always wondered about. You won't get rich stuffing Mentos into bottles of Diet Pepsi, right?

Probably not. But millions of people are at least hoping for some modest returns, thanks to a profit-sharing program run by YouTube's corporate parent, tech heavyweight Google.

He then talked with Andrew Broadbent, a YouTube consultant (How's that for a job title?):

..."You just have to believe YouTube that the figures are the real deal."

He added that serious money — more than $100,000 a year — actually can be made for the talented (or lucky) few who rise to YouTube greatness. But the vast majority of the site's hundreds of millions of users will barely earn enough cash annually to buy a pizza.

An excellent example of the "talented few" is the crew from a breakout YouTube show called "Epic Meal Time." Short description: the show, which is updated with a new episode every week, features a cast of Canadians who create completely, absurdly, hilariously over-the-top meals based primarily on meat, especially bacon (lots of bacon) and usually a decent measure of Jack Daniels. While the epic meal is being assembled, a fat and calorie counter climbs ever higher, ever terrifyingly higher. 

It has to be seen to be believed. So watch the episode I've embedded below, the near-legendary "TurBaconEpic Thanksgiving": 

Many people compare it to "Jackass," bent through the gonzo lens of The Food Network gone carnivorously insane. It's rich, artery-clogging, politically incorrect entertainment.

But it is entertainment.

In May, L.A.-based Revision3 — the company that produces "Epic Meal Time" and a host of other programs, distributing them via YouTube and numerous other channels — was bought by Discovery Communications for a reported $30 million. 

So that's one way to make money off YouTube: Use it as a way to showcase your production and audience-gathering abilities, then get acquired by a bigger fish.

Within that paradigm, however, there's the "Epic Meal Time" approach. Back to Lazarus, who writes: "YouTube is an awesome site. Really. But it leaves something to be desired as a business partner."

Which is why you can use YouTube as a kind of free advertising, or as a platform for other types of business.

Let's look at this in the "Epic Meal Time" context. The show was essentially bootstrapped prior to Revision3 picking it up in 2011. Still, the two main guys involved with the show, host Harley Morenstein and producer Sterling Toth, managed to get "Epic Meal Time" a ridiculously high number of YouTube views, routinely in the tens of millions for each episode. 

Speculation online about how much money this could translate into via Google's YouTube partner program is rampant, but it's probably in the $25,000-$50,000 per month ballpark. I emphasize could. 

That sounds pretty tasty, but it's likely just about enough to cover production expenses, some actual pay for the people who appear in the show, and of course the mountains of "Bacon strips! Bacon strips!" that the fellas cook and consume in most episodes. 

On top of this, "Epic Meal Time" creates merchandise. They started with T-shirts, but they've branched out into foodstuffs and, in a not-safe-for-work vein (WARNING! WARNING!), whiskey- and bacon-flavored personal lubricants. A six-pack of the former goes for $60.

So this is how you make money on YouTube (real money) in three key steps:

1. Get your views into the millions, preferably the tens of millions; use the popularity to get the talent signed by legitimate Hollywood agencies, as "Epic Meal Time" did with the Gersh Agency.

2. Use all those views to build a tie-in merchandising platform.

3. Get the programming picked up by a better capitalized network and then have that network acquired by one of the really big entertainment players.

"Epic Meal Time" is obviously a special case. For the most part, Lazarus' observation is spot-on. YouTube is kind of what you make of it as a business partner. But for a lucky and talented few, it can be a gateway to serious money.

Follow Matthew DeBord and the DeBord Report on Twitter. And ask Matt questions at Quora.