1 00:00:00,000 --> 00:00:10,000 How do we have so much stuff? How much is this even worth? And all of this is cheap compared to employing everyone. 2 00:00:10,000 --> 00:00:13,000 Sir? Don't call me sir. 3 00:00:13,000 --> 00:00:18,000 Sir, I know I've been here a short time, but how do we pay for all of this? 4 00:00:18,000 --> 00:00:23,000 Obviously this helps, but there's got to be more. Is there something you're hiding? 5 00:00:23,000 --> 00:00:35,000 No, but it has been a while since we've done one of these, and a lot has changed in that time. 6 00:00:35,000 --> 00:00:41,000 There's been good times, some of them very good, and bad times, some of them very bad. 7 00:00:41,000 --> 00:00:45,000 And through all of that, we have more than doubled the size of our team. 8 00:00:45,000 --> 00:00:48,000 How do we make money now then? Like this. 9 00:00:48,000 --> 00:00:54,000 That right there is 2024's finalized revenue split. So, uh, video done then. 10 00:00:54,000 --> 00:00:59,000 Oh, right. You guys probably want a bit more context, but here's the thing. 11 00:00:59,000 --> 00:01:05,000 As we've grown, I have stepped back from some of the day-to-day leadership, so I might need some help getting you guys the full story. 12 00:01:05,000 --> 00:01:14,000 That's why I was tasked to go to the accounting department as well as talk to the other executives to find out all the juicy little details for you guys and have them presented to you. 13 00:01:14,000 --> 00:01:23,000 Our first stop is Colton. Oh, I wouldn't go over there. At least, not until you've told these fine folks about our sponsor for this video. Oh, do. 14 00:01:32,000 --> 00:01:37,000 We're actually going to start with the biggest change on our chart, lttstore.com. 15 00:01:37,000 --> 00:01:42,000 When Linus covered LTT Store in the 2020 breakdown, it was 15% of our total. 16 00:01:42,000 --> 00:01:48,000 Now, we've shipped over a million orders and it's ballooned to a staggering 55%. 17 00:01:48,000 --> 00:01:53,000 The biggest reason for this is that back then, two of our biggest product families didn't exist yet. 18 00:01:53,000 --> 00:01:58,000 Hand tools and bags, which now make up about half the revenue with the rest coming from everything else. 19 00:01:58,000 --> 00:02:04,000 That includes apparel, cable management, thermal pads, pet accessories, baby stuff. It's a pretty broad mix. 20 00:02:04,000 --> 00:02:07,000 Yeah, the lttstore.com. 21 00:02:07,000 --> 00:02:10,000 Callouts can be a little cringy, but they get people's attention. 22 00:02:10,000 --> 00:02:13,000 And when you combine that with quality products, it clearly works. 23 00:02:13,000 --> 00:02:19,000 So much so that we recently flipped the script and went from Sponsoree to Sponsorer, 24 00:02:19,000 --> 00:02:22,000 choosing some of our favorite creators to show off all of our products. 25 00:02:22,000 --> 00:02:25,000 The team has been killing it. 26 00:02:25,000 --> 00:02:34,000 Black Friday grew 45% year over year. But in my opinion, the best part of that event was that the orders were also fulfilled 60% faster than they were in 2023. 27 00:02:34,000 --> 00:02:38,000 I'm sure you appreciated that. It doesn't mean we never have problems though. 28 00:02:38,000 --> 00:02:48,000 Near the end of 2023, we found out live on the WAN Show that a manufacturer screw up on our OG backpack meant it didn't have the dual layer bottom that we promised. 29 00:02:48,000 --> 00:02:51,000 But our motto has always been to make it right with our customers. 30 00:02:51,000 --> 00:02:55,000 So we retroactively modified our warranty to provide extra coverage on that bottom layer, 31 00:02:55,000 --> 00:02:59,000 and our amazing InHo Support team offered gift cards as an apology. 32 00:02:59,000 --> 00:03:04,000 And if that wasn't enough, we offered outright refunds to anyone who wanted one, 33 00:03:04,000 --> 00:03:07,000 even those folks who had been using the bag for over a year. 34 00:03:07,000 --> 00:03:10,000 I could go on all day, but that's enough about lttstore for today. 35 00:03:10,000 --> 00:03:16,000 So let's throw this sleek and stylish commuter backpack, lttstore.com, 36 00:03:16,000 --> 00:03:19,000 to the writing department to talk about AdSense. 37 00:03:19,000 --> 00:03:22,000 Oh my goodness. Thanks. 38 00:03:22,000 --> 00:03:29,000 From 2016 to 2020, AdSense actually grew from 18% to 26% of LMG's overall revenue. 39 00:03:29,000 --> 00:03:34,000 And I'm happy to report that in 2024, it went down. 40 00:03:34,000 --> 00:03:38,000 Not gonna lie, I was actually super confused when they told me this was a good thing. 41 00:03:38,000 --> 00:03:41,000 We literally call ourselves YouTubers. 42 00:03:41,000 --> 00:03:44,000 How can it be good to make less money from YouTube? 43 00:03:44,000 --> 00:03:49,000 Well, for starters, just because it's a smaller percentage does not mean that it's less money. 44 00:03:49,000 --> 00:03:54,000 And second, it means that LMG is far less reliant on our Google overlords than we used to be. 45 00:03:54,000 --> 00:03:59,000 Let's say YouTube's ad business just collapsed. For most channels, that would probably mean game over. 46 00:03:59,000 --> 00:04:04,000 But thanks to our diversified revenue streams, we can actually carry on through challenging times. 47 00:04:04,000 --> 00:04:07,000 Of course, we don't mind, it had money. 48 00:04:07,000 --> 00:04:10,000 So let's break it down here. 61.5% comes from ads. 49 00:04:10,000 --> 00:04:13,000 So if you're someone who sits through the ads before watching the video, 50 00:04:13,000 --> 00:04:20,000 we thank you for your service. As for the folks who can't stand ads and opt for YouTube Premium, you guys make up 37.3%. 51 00:04:20,000 --> 00:04:26,000 Hold on a minute. How can 29% of our views make up 37% of our YouTube money? 52 00:04:26,000 --> 00:04:29,000 It's funny because I've had a lot of people ask me over the years. 53 00:04:29,000 --> 00:04:33,000 Oh, Linus, I've got premiums, so I'm watching without ads. 54 00:04:33,000 --> 00:04:37,000 Does that harm creators? But no, it's the complete opposite. 55 00:04:37,000 --> 00:04:41,000 The way that premium works is it takes 45% of your subscription fee. 56 00:04:41,000 --> 00:04:46,000 That goes to YouTube to maintain the platform and pay for YouTube music. 57 00:04:46,000 --> 00:04:51,000 And the rest, so 55%, gets divided up according to your total watch time 58 00:04:51,000 --> 00:04:55,000 over the course of the month across all the channels that you watched. 59 00:04:55,000 --> 00:05:00,000 So if you watched 50% LTT and 50% other channels, 60 00:05:00,000 --> 00:05:05,000 you would actually be contributing many times more than an ad-supported viewer. 61 00:05:05,000 --> 00:05:11,000 Shorts are a little bit different. Because Google allocates part of their revenue to music licensing for shorts, 62 00:05:11,000 --> 00:05:16,000 the creator share, both for ads and for premium, is just 45%. 63 00:05:16,000 --> 00:05:19,000 Frankly, though, I don't really blame them. 64 00:05:19,000 --> 00:05:24,000 Shorts get lots of views and, therefore, are a significant burden on the platform's infrastructure, 65 00:05:24,000 --> 00:05:30,000 but it's clear that Google has a lot of work to do figuring out how to monetize those views. 66 00:05:30,000 --> 00:05:36,000 Our biggest short in 2024 got 13 million views and made $1,300. 67 00:05:36,000 --> 00:05:39,000 That's about one-hundredth of a cent per view for me, 68 00:05:39,000 --> 00:05:43,000 and once everything is accounted for, probably even less for Google. 69 00:05:43,000 --> 00:05:49,000 For comparison, our biggest VOD last year did over 20 times that amount, 70 00:05:49,000 --> 00:05:52,000 over two-tenths of a cent per view. 71 00:05:52,000 --> 00:05:56,000 Then, there's longer livestream archives and the numbers completely change again. 72 00:05:56,000 --> 00:05:59,000 Here, we're looking at about 1.8 cents per view. 73 00:05:59,000 --> 00:06:05,000 Now, again, this is just looking at our top performing in each category for the year, 74 00:06:05,000 --> 00:06:09,000 but it gives you an idea of how watch time contributes to revenue, 75 00:06:09,000 --> 00:06:14,000 especially for premium viewers. Not every channel performs the same, though. 76 00:06:14,000 --> 00:06:20,000 Out of our active channels, the main LTT channel brings in about 76% of our adsense, 77 00:06:20,000 --> 00:06:23,000 with ShortCircuit and Techlinked finishing off the podium. 78 00:06:23,000 --> 00:06:29,000 Now, I want to clear something up that I'm sure will be a point of discussion in the comments. 79 00:06:29,000 --> 00:06:34,000 LMG's numbers are not and will never be directly comparable to other creators. 80 00:06:34,000 --> 00:06:39,000 If you're a moist critical fan, you probably saw his video which broke down YouTube revenue 81 00:06:39,000 --> 00:06:45,000 versus Twitch revenue and saw that he pulled in a whopping $84,000 for a 4-hour stream. 82 00:06:45,000 --> 00:06:50,000 But if you look closely here, that's because he was making over 17 RPM, 83 00:06:50,000 --> 00:06:53,000 or $17 per 1,000 views. 84 00:06:53,000 --> 00:06:58,000 If you took that number and multiplied it by our roughly 850 million views last year, 85 00:06:58,000 --> 00:07:04,000 holy f**k, we should ask for raises! I keyed because we don't make nearly the same RPM on our channel, 86 00:07:04,000 --> 00:07:14,000 and he might not either. Even on the same channel, RPM can change dramatically depending on how desirable your content is to high-roller advertisers. 87 00:07:14,000 --> 00:07:18,000 On our channel, we've seen as high as $11, but as low as $3. 88 00:07:18,000 --> 00:07:22,000 Though, of course, that's before we bake in our own sponsors. 89 00:07:22,000 --> 00:07:27,000 Speaking of sponsors, this seems like a good time to segue to our Colton. 90 00:07:27,000 --> 00:07:33,000 That's right, I still work here, and if you watch regularly, you'll know we have a wide variety of partners that we deal with. 91 00:07:33,000 --> 00:07:41,000 How wide? We manage to break it down into about 13 different categories, ranging from PC parts, to gaming, to lifestyle, and even software as a service. 92 00:07:41,000 --> 00:07:51,000 This is a breakdown of our 13 categories. SaaS companies like Odu make up 25.5%, lifestyle is 13.6%, and PC parts is 34.6%. 93 00:07:51,000 --> 00:07:56,000 PC parts are actually up from 2020, which is both good and bad. 94 00:07:56,000 --> 00:08:03,000 It's good because it clearly shows that you guys are closely engaged with the brands you see featured on our channel, allowing them to outbid our other partners. 95 00:08:03,000 --> 00:08:09,000 But it's bad because Business 101 says to diversify your income and not put all of your eggs in one basket. 96 00:08:09,000 --> 00:08:16,000 And tech has a risk of becoming a heavy basket for us since our audience demographics are so obviously appealing to tech companies. 97 00:08:16,000 --> 00:08:24,000 With that said, while three of our top tech partners do make up about 15% of our sponsor revenue, none of them are over 5%, 98 00:08:24,000 --> 00:08:27,000 meaning that none of them can have a major impact on our business. 99 00:08:27,000 --> 00:08:32,000 Another way we avoid over-reliance on individual partners is to have a wide variety of partners within our categories. 100 00:08:32,000 --> 00:08:39,000 In the PC parts category, we work with 26 partners, and across all categories, we have over 150. 101 00:08:39,000 --> 00:08:44,000 To add some additional context, our sponsors made up 21% of our 2024 revenue, 102 00:08:44,000 --> 00:08:50,000 with in-video reads accounting for 9%, and dedicated sponsored videos accounting for 12%. 103 00:08:50,000 --> 00:08:53,000 We also provide production value to companies like Dbrand and MSI. 104 00:08:53,000 --> 00:09:00,000 We just released a video where Ploof and Sherrod take you through how it's done and give a little bit more insight into how LMG works, 105 00:09:00,000 --> 00:09:05,000 down in the gears and the guts. Head over to LMG.GG slash Flowplane to check it out. 106 00:09:05,000 --> 00:09:08,000 Sponsored videos come about in one of two ways. 107 00:09:08,000 --> 00:09:13,000 The ideal way is when we integrate a sponsor's product into an already existing idea. 108 00:09:13,000 --> 00:09:17,000 For example, we had the idea for me to make an outdoor pool gaming setup. 109 00:09:17,000 --> 00:09:22,000 So when someone reached out looking for a cool project to show off their projector, that was a perfect fit. 110 00:09:22,000 --> 00:09:28,000 The same goes for the time we wanted to make a video on cleaning out a water cooling loop and an ultrasonic toothbrush brand stepped up, 111 00:09:28,000 --> 00:09:32,000 naturally integrated and, more importantly, highly relevant to the project. 112 00:09:32,000 --> 00:09:39,000 The second way these videos come about is a sponsor will bring us a product, let's say a robot lawnmower or pool cleaner, 113 00:09:39,000 --> 00:09:43,000 and then we will go out in search of a lawn or a pool to maintain. 114 00:09:43,000 --> 00:09:50,000 These videos tend to rely more on unscripted shenanigans and the personalities of our hosts to drive viewer enjoyment while we 115 00:09:50,000 --> 00:09:54,000 tick off all of the key points the sponsor wants communicated about their product. 116 00:09:54,000 --> 00:09:59,000 Now these videos are always clearly disclosed, both verbally and visually, 117 00:09:59,000 --> 00:10:04,000 and while they do often include candid footage of us using the product and even providing commentary on it, 118 00:10:04,000 --> 00:10:10,000 a sponsor can buy airtime on our channel, but they can never buy our opinion. 119 00:10:10,000 --> 00:10:14,000 FTC guidelines clearly state that if you say it, you have to believe it, 120 00:10:14,000 --> 00:10:20,000 and no vendor talking point should ever be disguised as an opinion unless you happen to agree, 121 00:10:20,000 --> 00:10:25,000 let's say for instance, that the design of this product is minimalistic or what have you. 122 00:10:25,000 --> 00:10:31,000 We also go out of our way to validate manufacturer claims when possible, even in sponsored videos. 123 00:10:31,000 --> 00:10:35,000 One area that this has been really useful is when evaluating displays for phones, 124 00:10:35,000 --> 00:10:40,000 which sometimes do not reach the brightness levels that are specified by the manufacturer. 125 00:10:41,000 --> 00:10:44,000 This kind of scrutiny is just part of the process of working with us, 126 00:10:44,000 --> 00:10:49,000 and if a sponsor doesn't like it, we'll just drop them like we've dropped so many others in the past. 127 00:10:49,000 --> 00:10:52,000 Sometimes we also drop sponsors because of you guys. 128 00:10:52,000 --> 00:10:57,000 We maintain an open line of communication for sponsor issues or concerns through our community forum, 129 00:10:57,000 --> 00:11:03,000 and we have a long track record of leveraging user reported issues to affect change at the companies we partner with. 130 00:11:03,000 --> 00:11:09,000 Speaking of forums, Odo also has a dedicated forum app in case you want to add it to your website 131 00:11:09,000 --> 00:11:13,000 so people can complain if your discounted affiliate links aren't working. 132 00:11:13,000 --> 00:11:18,000 Speaking of affiliate links made up about 3% of our 2024 revenue. 133 00:11:18,000 --> 00:11:23,000 Those are the links that you'll often see in the description, like our referral code for private internet access. 134 00:11:23,000 --> 00:11:30,000 Those can be a pretty good deal for all sides. PIA gets a new subscriber, you get a discount, and we get a kickback. 135 00:11:30,000 --> 00:11:34,000 All in, the business team lands at about 24% of the total pie. 136 00:11:34,000 --> 00:11:37,000 Now you can see why we keep bringing Colton back into the fold. 137 00:11:37,000 --> 00:11:41,000 Now we're almost done, but first let's take a quick ride on a... 138 00:11:41,000 --> 00:11:49,000 Floplane! Floplane.com is our paid membership website where we offer exclusive content and sometimes early access to our videos. 139 00:11:49,000 --> 00:11:56,000 We offer two subscription tiers, $5 or $10, with the difference being that the higher tier gives you 4K video 140 00:11:56,000 --> 00:12:03,000 and sometimes access to extra exclusive content like the digital pass to our last LTX expo. 141 00:12:03,000 --> 00:12:06,000 In 2024, Floplane was 7% of our pie. 142 00:12:06,000 --> 00:12:10,000 It's a humble slice, but it's also up 1%. 143 00:12:10,000 --> 00:12:15,000 And I think it's pretty cool that with in-video sponsor spots coming down and Floplane going up, 144 00:12:15,000 --> 00:12:19,000 we are contributing almost as much as every in-video sponsor combined. 145 00:12:19,000 --> 00:12:23,000 Linus often talks about how the audience is the real boss of the company, 146 00:12:23,000 --> 00:12:28,000 and this is a prime example of how easy it is for you guys to show us when you support our direction 147 00:12:28,000 --> 00:12:37,000 and to show us when you don't. Elephant to the room, we lost a ton of Floplane subscribers after the great reset in August of 2023, 148 00:12:37,000 --> 00:12:42,000 but thanks to the hard work of our team, shout out to Sammy for the great exclusives, 149 00:12:42,000 --> 00:12:47,000 we had three major pushes to help bring us back to just about where we left off. 150 00:12:47,000 --> 00:12:51,000 Thanks again for supporting us at Floplane. Now let's get back to Linus for some closing thoughts. 151 00:12:51,000 --> 00:12:56,000 There you go. The last under 1% is miscellaneous things like random reimbursements, 152 00:12:56,000 --> 00:13:00,000 which I think underscores the point that Luke mentioned about you guys being the boss. 153 00:13:00,000 --> 00:13:05,000 When you break it down, every single piece of the chart still boils down to you. 154 00:13:05,000 --> 00:13:10,000 You are the boss when it comes to choosing to engage with our content ideas on YouTube. 155 00:13:10,000 --> 00:13:13,000 You are the boss when it comes to what sponsors we work with. 156 00:13:13,000 --> 00:13:16,000 You're the boss when you evaluate the quality of our products, 157 00:13:16,000 --> 00:13:20,000 and you're the boss when you choose to directly support us on Floplane. 158 00:13:20,000 --> 00:13:23,000 And just like any boss, if we're not living up to your expectations, 159 00:13:23,000 --> 00:13:28,000 you have the power to give us a good old-fashioned dressing down to dock our pay 160 00:13:28,000 --> 00:13:34,000 or even sack us out, right? Which is kind of a scary way to live if I can be real for a minute, 161 00:13:34,000 --> 00:13:40,000 but it's also super cool because not only do we have this massive community to share our passions with, 162 00:13:40,000 --> 00:13:45,000 but a massive community that can help guide us toward what you guys want to see in the future. 163 00:13:45,000 --> 00:13:48,000 As for our second larger elephant in the room, 164 00:13:48,000 --> 00:13:52,000 you'll notice that we never gave you guys any specific dollar amounts. 165 00:13:52,000 --> 00:13:58,000 I am sorry about that, and I understand that in trying to be as transparent as possible with you guys over the years, 166 00:13:58,000 --> 00:14:05,000 we have created an environment where the one thing we can't talk about can trigger a vigorous pitchforking. 167 00:14:05,000 --> 00:14:09,000 But the reality of it is, whether it's channels pausing production 168 00:14:09,000 --> 00:14:15,000 or employees leaving the company or the exact dollar amounts that we made on a specific deal, 169 00:14:15,000 --> 00:14:20,000 there really are some things we just can't talk about, both for our protection and for our team. 170 00:14:21,000 --> 00:14:27,000 Say you were canned, for instance. Would you want your former boss or colleagues talking about it on a podcast? 171 00:14:27,000 --> 00:14:32,000 Of course not. And for fairness sake, we have the same processes so that everyone is treated the same. 172 00:14:32,000 --> 00:14:38,000 As for the final chart, you can see there is even more detail under each slice that we didn't really get into, 173 00:14:38,000 --> 00:14:44,000 and it can get pretty complicated. This is a big part of the reason that I hire to see EO back in early 2023 174 00:14:44,000 --> 00:14:47,000 and have asked the rest of the leadership team to step up. 175 00:14:47,000 --> 00:14:51,000 My strength is being a bottomless pit of creativity, 176 00:14:51,000 --> 00:14:54,000 and I found that while I could spend my time on the details, 177 00:14:54,000 --> 00:14:58,000 it wasn't necessarily the best thing for the company and the team. 178 00:14:58,000 --> 00:15:02,000 Thanks for watching, guys. I don't actually sit in annual business reviews anymore, 179 00:15:02,000 --> 00:15:07,000 so when I reviewed this script with Elijah, that was legitimately my first look at these numbers for 2024. 180 00:15:07,000 --> 00:15:11,000 Hopefully it was as fun for you guys to go through as it was for me. 181 00:15:11,000 --> 00:15:14,000 If you want to see in more detail what's changed over the years, 182 00:15:14,000 --> 00:15:19,000 go check out the two previous editions we've done with this back in 2016 and in 2020.