How does LMG make money? – Honest Answers Episode 2

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? Tunnel Bear is the simple VPN app that makes it easy to browse privately and enjoy a more open internet experience to try tunnel barrier for free check out the link in the video description below. 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. Squarespace featuring Squarespace domains a new fast and easy way to search over 200 top-level domain types and manage them directly through Squarespace. Your twenty four seven support via live chat and email and a site only costs eight dollars a month. You get a free domain if you buy Squarespace for a year as well and all of that includes the responsive design that makes your website look great on any device. Commerce module so you can sell stuff and the classic cover page so you can have one singular page that just looks great. To start up an online presence today start a trial with no credit card required and when you do sign up for Squarespace make sure to use offer code linus to get ten percent off your first purchase. So thanks for watching guys if this video sucked you know what to do, but if it was but if it was- but if it was awesome, get subscribed, hit that like button or even consider supporting us directly by buying a cool shirt like this one, or by joining our community forum where you can ask questions, answer questions, and basically talk tech with a bunch of other technophiles.

Now that you’re done doing all that stuff you’re probably wondering what to watch next so click that little button in the top right corner to check out our latest video over on the money sink that is Channel Super Fun. Can i just like throw these at it? Channel Super Fun!.

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