Welcome to episode 2 of honest answers.
Today I'm going to try to demystify
another aspect of the inner workings of
Linus Media Group about which there
appears to be a lot of confusion.
How do we make enough money
to afford all the staff, studio space and equipment that we have?
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So it feels appropriate to open this
discussion with one of the main ways
that people think we make money.
Paid advertising videos disguised as reviews.
While we actually couldn't be fined for
that type of behavior here in Canada
where the advertising guidelines and
even then they are guidelines not laws here
are only just now being revised for
the age of social and influencer marketing
for brands and agencies
that want to market to Americans.
So forty to fifty percent of our audience.
Hefty fines are quickly becoming commonplace
with undisclosed influencer marketing.
So no responsible brand would engage in
this practice and we outright refuse to
as well anyway because even with proper
disclosure what value does a paid review
or even a video with a very similar
structure to a review have to the viewer?
Which getting into how we do make money
then, doesn't mean that we never do paid
projects with hardware manufacturers.
We absolutely do.
Every entry in the obscenely popular build guide series is
clearly sponsored by either Intel or by AMD.
But in these and other product
placement deals we retain the right for
our hosts and writers to have their own
opinions with very tight restrictions on
what a brand can alter about the
finished video.
We grant these sponsors no special rights to positive reviews in
other videos or even space on our editorial calendar at all.
For example,
perennial sponsors, Corsair and
Cooler Master often promote products in
pre-roll ads that we have never reviewed
and Apacer as an example of a sponsor
whose products we have never reviewed at all.
There's other baggage for LMG sponsors too.
We have on multiple
occasions s*** canned potential sponsors for
refusing our terms and even existing
sponsors for not taking care of our viewers.
dbrand is a golden example of what we expect in this regard.
If a LTT community member complains they mobilize
the robot army immediately and do what it takes to fix.
This is critically important for us because as I'm about to
reveal in enough detail to make Nick and Yvonne wince.
No amount of marketing funding in the short term could possibly
outweigh the long-term value of creating
the best content we can while maintaining the trust and viewership of our audience.
I'm not going to give exact numbers here.
Firstly, because disclosing dollar amounts would violate some of our
contractual agreements and secondly
because exactly how much money I or Luke
or Brandon or anyone else here makes is
none of your f****** business.
But, however much it is.
Here is where it comes from.
A little under half of Linus Media Group's revenue this year has come
from sources that are basically directly
affected by the number of views that we draw in.
YouTube Adsense you know that little skip add button you clicked
before watching this and amazon affiliate links that showed out at the
end of our videos where you can buy the
product that I'm reviewing or really anything else and we get a kickback
Make up equal portions of this and Vessel
the early access platform where you can
watch our videos seven days before they
go live on YouTube makes up a smaller
but still very significant chunk.
Of the remaining fifty percent and change a
quarter of that is the brands who
sponsor us to cover events like Computex
the Samsung developer, conference NAB
the Polaris launch in Macau and PAX East.
Another quarter of it, is pre-roll ads and what we call "standard" product integrations.
You know how the Master Case 5 has a variety of modular parts
and Mass Drop gets you great deals on
genuine products over at draw dot slash,
etc, etc, and we bake those into our Linus
Tech Tips videos on YouTube.
TechQuickie and WAN Show ad spots get separated out
in our books so I'll do the same for you.
They combined for just under fifteen
percent, then another five percent is
t-shirt fan and hoodie sales, another 2%
is patrons and contributors and banner ads on the forum and
point one percent is one sponsored spot that
we did over on Channel Super Fun for Odious Games.
Man that channel loses a lot of money.
Anyway though, the remainder so just about a third of it is the dozen
or so projects that we've done this year
that fall outside of "standard" pre-rolls and integrations.
Some of them are dedicated, disclosed, fully sponsored videos
like the recent tech then versus now video sponsored by Sage.
The my Grandpa meets google video sponsored by
the google store and the unbuild logs
that we've done with some system
integrators including iBUYPOWER and Origin PC.
But many of them are things that probably wouldn't even occur to you.
On the books for this year we've got the
sponsored instagram posts tweets and
periscopes dreams that we did from the
North America and New York auto shows with Ford and Toyota.
We've got a series of retail staff training videos that we
produce exclusively for Intel's retail edge program.
We've got DBrands product placement and sponsorship of Scrap Yard War season 4.
Logitech's Daniel Borel innovation center tour and
Nerd Sports a series that vessel contracted us to
produce as an exclusive web series for
their platform with that being pretty much it.
So then why am I telling you all of this?
Most Youtubers keep this stuff very carefully hidden.
The answer is because I believe you guys have a right to know and
because I hope that it'll drive home once and for all, why it's in
our best interest from both an ethical
and even a monetary standpoint to make
the best content we can make whether
that means working with long-term partners,
products from non-sponsors or
even brands who can't be arsed to reply
to an email about a review unit.
And, I do all of this hoping even though I realize
that no degree of transparency will
convince some of you hoping that I can
get across the point that we aren't
in fact, actually paid Nvidia shills.
Nor are we obligated to bow to any other manufacturer.
All of these hardware vendors the ones on this list and any
miscellaneous smaller ones I might have missed
combined make up less than fifteen percent
of our revenue so far this year.
If that business went away tomorrow,
Linus Media Group would not only survive but it
would continue operating the way it does
without needing to cut anyone's pay or
downsize our work space and this is
thanks to the partnerships we've built
with non-hardware brands who want to reach our audience like
SquareSpace, Dollar Shave Club, Ting, Soylent, GammaLabs, VideoBlocks, Blue Apron, Tunnel Bear and
and more and more importantly thanks to you guys.
You the audience are in black and white terms in every measurable way
worth more to us than anything that a sponsor can offer and I hope that you
can understand why that is now.
To be clear undisclosed paid reviews are out there.
I'm not saying to put away your tin foil hats just yet.
Some key ways to recognize them would be manufacturer
links especially tracked or custom ones
in the video description with above the
full being a dead giveaway or supporting
social posts with weird hashtags that no
one in their right mind would give a
s*** about, but I'm just saying that
thanks to self flattery incoming careful
planning on my part and my teams you won't find them here.
Linus Media Groups integrity is not for sale, it never will be and now you know why.
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