Michelle Phan is the YouTube Star with 1 billion views, 7 million followers, and $84 million annual sales run rate.
Adam Rifkin stashed this in Monetization
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Do not underestimate the YouTube makeup-tutorial starlet.
Because Michelle Phan — with more than a billion views on YouTube and seven million followers; her own L’Oreal line and lifestyle media network; booming e-commerce beauty startup called Ipsy; and a new book — is teaching more people how to decorate their faces than perhaps anyone else in the world.
The ferocious 27-year-old mogul had a modest start with her family — living on food stamps at one point — and now has a company with an $84 million annual sales run-rate. She has 700,000 subscribers who receive her Glam Bags — little sacks of makeup samples — for $10 a month. The makeup business is famous for its high margins.
“The first videos I uploaded on my own personal channel were videos of dogs,” Phan said.
In 2007, Phan was a waitress, and couldn’t even get a job at a beauty counter because she didn’t have sales experience. She was undeterred.
“YouTube was the biggest thing in the college community, and it just made so much sense for me to have a platform,” she said. “Instead of feeling down about it, I opened another door, and that door happened to be a laptop.”
Phan began doing makeup tutorials. And people loved those makeup tutorials. Eyeliner technique turned into far more sophisticated lessons, like how to look like Lady Gaga in “Bad Romance.”
“I showed people how they can transform their face,” she said. “[Lady Gaga] really helped put me on the map.”
Meanwhile, large makeup brands like Lancome were struggling to get hits with good viral makeup videos. In 2008, a Lancome executive Googled around and found a Phan tutorial in which she was cramped up on a plane, showing her fans how to do makeup on the plane. Lancome signed her as a spokesperson.
Phan says her shaky bedroom videos appealed to people more than big productions because they felt more authentic: “People need to understand that what makes YouTube so different is that you go on there because you want to connect with someone.”
She talked about her main business, the Glam Bags — curated, luxury sample bags sent monthly — and the month-long wait list to subscribe.
Phan turned to the audience: “For $10 a month, you can still feel like you’re valued, and you can get something that empowers you to try something new,” she said.
Asked about the economics of YouTube, Phan said, “It’s like any medium — you have the subscription, but that’s not going to make all the money. You have to bring on sponsors, and you have to sell a product.”
And not every viral star has to have seven million followers — there’s a healthy YouTube middle class: “So many of my friends have 200,000 subscribers, and they make around five to six K a month,” she said. “Which is completely cool.”
Chmielewski asked how Phan has noticed desktop and mobile patterns change.
“Last year, 60 percent of traffic came from desktop,” Phan said. “Today, 70 percent comes from mobile.”
totally awesome! i love stories like this!
I didn't realize how many people are making a living off YouTube!
And what's interesting is that they use Vine, Instagram, Facebook, Twitter, etc., to drive more views of their YouTube videos.
That's way to make money #1.
Then, on top of that, Michelle Phan also has a subscription samples business with 700,000 people who pay a monthly fee for makeup samples.
That's way to make money #2.
All the social media drives more YouTube views and more sample business subscribers.
Impressive that a relatively modest YouTube following can lead to real money!
Ok, idea for Emily Kate Moon:
You make a series of 2-minute children's stories on YouTube.
I'm serious. You would be WONDERFUL at this.
holy smokes, now you're talking!!
i was just wondering tonight what i could do on my youtube channel. (seriously, tonight!). and here comes adam rifkin with the answer!!
Do you like the idea? I'm not sure if it should be an animation or just you reading the story to kids...
this is insane, totally shows how youtube vlogging is not my world, have no clue about these hustlersss
but they seem invariably about beauty, makeup, fashion.
Right, Zoe Sugg covers similar themes in her videos:
There are other moneymaking YouTube channels with cooking or epic rap battles.
But beauty, makeup, fashion are very popular too.
2 years later.
Now has over 2 million monthly subscribers at $10/month:
That's a $240 million run rate.