How does LMG make money? - Honest Answers Episode 2
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
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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
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