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How does LMG make money? - Honest Answers Episode 2

2016-06-29
welcome to episode 2 of honest answers today I'm going to try to demystify another aspect of the inner workings of Lynas 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 bear 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 influence or 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 Coolermaster often promote products in pre-roll ads that we have never reviewed and a pacer 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 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 an ltte community member complains they mobilize the robot army immediately and do what it takes to fix it 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 fucking 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 ad 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 makeup 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 50% in change a quarter of that is the brand's 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 mastercase 5 has a variety of modular parts and mass drop gets you great deals on genuine products over at draw duck slash etc etc and we baked those into our Linus tech tips videos on YouTube tech quickie and when show ads bots get separated out in our books so I'll do the same for you they combined for just under 15% then another 5% is t-shirt fan and hoodie sales another 2% is patrons and contributors and banner ads on the forum and point 1% is one sponsored spot that we did over on channel super fun for odious games men 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 unbilled 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 periscope streams 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 D brand's product placement and sponsorship of scrapyard war season for 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 shells 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 come find make up less than 15% of our revenue so far this year if that business went away tomorrow Lynas 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 workspace 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 King Soylent gamma labs videoblocks blue apron tunnel bear 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 the right mind would give a shit about but I'm just saying that thanks to cell flattery incoming careful planning on my part and my teams you won't find them here Linus Media Group's 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 to up level domain types and manage them directly through Squarespace you go 24/7 support via live chat and email and a site only cost $8 a month you get a free domain if you by Squarespace for a year as well and all of that includes the responsive design that makes your website look great on any device commerce modules 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 Lynas to get 10% 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 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 tech no files 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 channels super-fun I'll just like throw DS at it channel super fun
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