TinHatRanch
Posting Mad!
My revenue streams are as diversified as I can make them. I'm involved with a bunch of affiliate marketing already.
Selling a YouTube Channel
- Thread starter TinHatRanch
- Start date
Yachts For Sale
Yachts For Sale
Great thread. Here is my two cents worth:
You rightly say that the ToS prevents you from selling your channel without Google's permission, so you plan to sell access to the channel. In that case I would say that what you are doing is leasing your channel out, rather than really selling it. I would imagine that this will have a negative impact on the value.
As Famous pointed out, your channel is based around you; your face appears on screen, you have a distinctive delivery, your subscribers clearly like you and enjoy watching you. An investor will factor that in to his valuation...when he buys your business he will lose you.
Having said that I think that your social media ensemble business would probably be very attractive to a buyer who sees potential to integrate it into his overall marketing strategy. More and more businesses are starting to put a high value on a strong social media presence, although (certainly in my business) many of them are going about it in completely the wrong way.
In my opinion you should take a good look at small to medium sized businesses that you think would benefit from your offering. Approach them with a proposal, and include the option for you to co-present and/or train the presenter that they plan to replace you with so that there is a smooth transition.
In terms of the valuation...very very hard to say. In my business (yachting), a brokerage will happily pay $5K for a double page spread of advertising in the industry's premier magazine (Boat International). The magazine has a distribution of only 9000 copies, but in reality nothing can guarantee that every copy is opened, and I would question how many people really look at the DPS when it is surrounded by so many similar ads. Maybe 900 people?
In contrast, my channel reaches 90,000 people and more every single month - so I could reason that my channel is worth $500,000 (100 x $5000).
Clearly the above is wishful thinking, but it does illustrate that the value of your channel depends more on the perception of the buyer and less on a formula involving a multiple of your revenue. If he sees value in reaching more people and having access to analytics , you should be able to sell for a reasonable price.
Anyway, good luck with the sale, compliments for the success of your channel, and do let us know how you get on!
You rightly say that the ToS prevents you from selling your channel without Google's permission, so you plan to sell access to the channel. In that case I would say that what you are doing is leasing your channel out, rather than really selling it. I would imagine that this will have a negative impact on the value.
As Famous pointed out, your channel is based around you; your face appears on screen, you have a distinctive delivery, your subscribers clearly like you and enjoy watching you. An investor will factor that in to his valuation...when he buys your business he will lose you.
Having said that I think that your social media ensemble business would probably be very attractive to a buyer who sees potential to integrate it into his overall marketing strategy. More and more businesses are starting to put a high value on a strong social media presence, although (certainly in my business) many of them are going about it in completely the wrong way.
In my opinion you should take a good look at small to medium sized businesses that you think would benefit from your offering. Approach them with a proposal, and include the option for you to co-present and/or train the presenter that they plan to replace you with so that there is a smooth transition.
In terms of the valuation...very very hard to say. In my business (yachting), a brokerage will happily pay $5K for a double page spread of advertising in the industry's premier magazine (Boat International). The magazine has a distribution of only 9000 copies, but in reality nothing can guarantee that every copy is opened, and I would question how many people really look at the DPS when it is surrounded by so many similar ads. Maybe 900 people?
In contrast, my channel reaches 90,000 people and more every single month - so I could reason that my channel is worth $500,000 (100 x $5000).
Clearly the above is wishful thinking, but it does illustrate that the value of your channel depends more on the perception of the buyer and less on a formula involving a multiple of your revenue. If he sees value in reaching more people and having access to analytics , you should be able to sell for a reasonable price.
Anyway, good luck with the sale, compliments for the success of your channel, and do let us know how you get on!
Famous
I've Got It
Thank you for putting "wishful thinking" in there, lol.
Perception of value is definitely a component in any investment purchase, but the basis for the investment is the ROI. Without applying a formula for determining returns, the purchase is merely based on emotions. Ignoring ROI, as a Yachting business, you might perceive TinHat's portfolio as less valuable than a Prepping business, who might perceive it as more valuable because as you said, they would have interest in integrating it into their current business. The problem with social media investing is social media is not by traditional standards considered a business. It may make money, yes, but securing the funds to facilitate the purchase is going to be difficult due to the nontraditional perception.
When it comes to ROI, if your 100 x $5,000 formula had included a digital media CPM conversion, it would have been correct. 100 x $5,000 / 1000 = $500... about what might be spent advertising per month on Boat Internationals website? Multiplied by 12 months and you get $6,000. Eerily what I said TinHat's YouTube channel could be worth. Though this calculation is based on an advertising cost scheme and not a profit/cost model. Point is, if an investor cannot prove ROI it severely limits the value of the purchase. Crown's formula (10 to 30 times the profit) is the kind they applied to Facebook, and it took years of worldwide advertising to sell that. Most investors seek to attain a 10% ROI, but don't often get it, making 10 times the profit the high end of TinHat's valuation, which is why I said his "entity" (portfolio) could be worth as much as $325K. And I use portfolio because his business exists essentially on paper, much like a stock investments business does, and the sale/transfer will be similarly structured.
Speaking of selling though, no, TinHat wouldn't be leasing out his YouTube channel. YouTube owns the channel and grants creators access. When you "sell" your channel, if YouTube approves the transfer, they agree to grant the "new owner" access. What you're selling is basically a right of control (over the access YouTube grants). Not completely dissimilar to the purchase/transfer of a website... you're buying access to control a space, not the space itself. Which, think selling a YouTube Channel is hard, wait until he goes to sell the website.
I agree with you though that anyone looking to integrate TinHat's social media presence into their own business would benefit from creating shared videos to smooth the transition, specifically on his YouTube channel. The real heartbreaking thing is... what else could they buy for the same dollar? If he wanted the top end of 30x gross profit, that's something like $60k for his YouTube channel alone... I would think you could get a lot more than 80k subs for $60k worth of YouTube paid ads, and not have to deal with purchase/transition/multiple channel issues.
But he's selling a business, not just a channel. It's value, like everything else, is dictated by what someone is willing to pay for it. Fascinating topic though, isn't it? To think that YouTube channels, Facebook pages and Amazon accounts are actually worth money now... come a long way from YouTube being the online version of "Americas Funniest Home Videos".
Hi,
I may be able to help you here, could you send me a PM as I can't do so because of my post count.
Cheers!