WEBVTT 00:00:00.240 --> 00:00:06.879 Welcome to episode two of honest answers. Today I'm going to try to 00:00:04.279 --> 00:00:11.559 demystify another aspect of the inner workings of Lionus Media Group about 00:00:08.639 --> 00:00:18.880 which there appears to be a lot of confusion. How do we make enough money 00:00:15.759 --> 00:00:22.630 to afford all the staff, studio space, 00:00:18.880 --> 00:00:29.519 and equipment that we have? 00:00:29.519 --> 00:00:35.920 Tunnel Bear is the simple VPN app that makes it easy to browse privately and 00:00:33.600 --> 00:00:40.200 enjoy a more open internet experience. To try Tunnel Bear for free, check out 00:00:38.079 --> 00:00:44.160 the link in the video description below. So, it feels appropriate to open 00:00:42.800 --> 00:00:49.760 this discussion with one of the main ways that people think we make money, 00:00:47.039 --> 00:00:55.440 paid advertising videos disguised as reviews. While we actually couldn't be 00:00:53.199 --> 00:00:59.600 fined for that type of behavior here in Canada where the advertising guidelines 00:00:57.760 --> 00:01:04.559 and even then they are guidelines not laws here are only just now being 00:01:02.239 --> 00:01:09.360 revised for the age of social and influencer marketing for brands and 00:01:07.680 --> 00:01:14.840 agencies that want to market to Americans. So 40 to 50% of our audience 00:01:12.720 --> 00:01:21.200 hefty fines are quickly becoming commonplace with undisclosed influencer 00:01:18.159 --> 00:01:23.680 marketing. So no responsible brand would 00:01:21.200 --> 00:01:28.960 engage in this practice and we outright refuse to as well anyway because even 00:01:26.159 --> 00:01:33.280 with proper disclosure, what value does a paid review or even a video with a 00:01:31.119 --> 00:01:37.840 very similar structure to a review have to the 00:01:35.079 --> 00:01:41.840 viewer? Which getting into how we do make money then doesn't mean that we 00:01:40.000 --> 00:01:47.360 never do paid projects with hardware manufacturers. We absolutely do. Every 00:01:44.799 --> 00:01:54.720 entry in the obscenely popular build guide series is clearly sponsored by 00:01:49.840 --> 00:01:56.799 either Intel or by AMD. But in these and 00:01:54.720 --> 00:02:01.439 other product placement deals, we retain the right for our hosts and writers to 00:01:58.880 --> 00:02:05.280 have their own opinions with very tight restrictions on what a brand can alter 00:02:03.119 --> 00:02:11.840 about the finished video. We grant these sponsors no special rights to positive 00:02:08.640 --> 00:02:14.560 reviews in other videos or even space on 00:02:11.840 --> 00:02:19.840 our editorial calendar at all. For example, perennial sponsors Corsair and 00:02:17.200 --> 00:02:25.120 Cooler Master often promote products in pre-roll ads that we have never reviewed 00:02:22.560 --> 00:02:30.560 and a Pacer is an example of a sponsor whose products we have never reviewed at 00:02:28.000 --> 00:02:35.599 all. There's other baggage for LMG sponsors too. We have on multiple 00:02:33.000 --> 00:02:40.720 occasions canned potential sponsors for refusing our terms and even existing 00:02:38.400 --> 00:02:46.720 sponsors for not taking care of our viewers. Dbrand is a golden example of 00:02:43.599 --> 00:02:48.480 what we expect in this regard. If an LTT 00:02:46.720 --> 00:02:52.959 community member complains, they mobilize the robot army immediately and 00:02:50.640 --> 00:02:58.080 do what it takes to fix it. This is critically important for us because as 00:02:56.160 --> 00:03:03.120 I'm about to reveal in enough detail to make Nick and Ivon 00:02:59.800 --> 00:03:05.599 wse, no amount of marketing funding in 00:03:03.120 --> 00:03:10.080 the short term could possibly outweigh the long-term value of creating the best 00:03:07.840 --> 00:03:15.280 content we can while maintaining the trust and viewership of our audience. 00:03:13.440 --> 00:03:19.120 I'm not going to give exact numbers here. Firstly, because disclosing dollar 00:03:17.760 --> 00:03:24.080 amounts would violate some of our contractual agreements. And secondly, 00:03:21.440 --> 00:03:28.560 because exactly how much money I or Luke or Brandon or anyone else here makes is 00:03:25.920 --> 00:03:33.519 none of your business. But however much it is, here is where it comes from. A 00:03:31.840 --> 00:03:37.920 little under half of Lionus Media Group's revenue this year has come from 00:03:35.519 --> 00:03:42.720 sources that are basically directly affected by the number of views that we 00:03:39.920 --> 00:03:46.560 draw in. YouTube AdSense, you know, that little skip ad button you clicked before 00:03:44.400 --> 00:03:50.959 watching this. And Amazon affiliate links, that shout out at the end of our 00:03:49.040 --> 00:03:55.280 videos where you can buy the product that I'm reviewing or really anything 00:03:52.959 --> 00:04:00.159 else and we get a kickback, make up equal portions of this. And Vessel, the 00:03:58.480 --> 00:04:04.560 early access platform where you can watch our videos 7 days before they go 00:04:01.920 --> 00:04:10.000 live on YouTube, makes up a smaller but still very significant chunk. Of the 00:04:07.120 --> 00:04:14.640 remaining 50% in change, a quarter of that is the brands who sponsor us to 00:04:12.159 --> 00:04:20.320 cover events like Computex, the Samsung Developer Conference, NAB, the Polaris 00:04:16.959 --> 00:04:22.720 launch in Macau, and PAX East. Another 00:04:20.320 --> 00:04:26.720 quarter of it is pre-roll ads and what we call standard product integrations. 00:04:24.960 --> 00:04:30.400 You know how the Mastercase 5 has a variety of modular parts and MasterUp 00:04:28.960 --> 00:04:36.520 gets you great deals on genuine products over at drawups/ etc, etc. and we bake 00:04:33.600 --> 00:04:41.600 those into our Linus Tech Tips videos on YouTube. Techquiki and WAN Show ad spots 00:04:39.759 --> 00:04:47.120 get separated out in our books. So, I'll do the same for you. They combine for 00:04:43.680 --> 00:04:50.000 just under 15%. Then another 5% is 00:04:47.120 --> 00:04:54.360 t-shirt fan and hoodie sales. Another 2% is patrons and contributors and banner 00:04:52.560 --> 00:04:58.880 ads on the forum and.1% is one sponsored spot that we did 00:04:57.120 --> 00:05:04.320 over on channel Super Fund for ODS games. Man, that channel loses a lot of 00:05:01.199 --> 00:05:06.560 money. Anyway though, the remainder, so 00:05:04.320 --> 00:05:11.759 just about a third of it, is the dozen or so projects that we've done this year 00:05:08.479 --> 00:05:14.080 that fall outside of standard pre-rolls 00:05:11.759 --> 00:05:19.120 and integrations. Some of them are dedicated, disclosed, fully sponsored 00:05:16.960 --> 00:05:24.000 videos, like the recent tech then versus now video sponsored by Sage. Uh the my 00:05:22.080 --> 00:05:27.680 grandpa meets Google video sponsored by the Google store and the unbuild logs 00:05:26.479 --> 00:05:32.639 that we've done with some system integrators including I by Power and 00:05:29.919 --> 00:05:36.160 Origin PC. But many of them are things that probably wouldn't even occur to 00:05:34.320 --> 00:05:40.400 you. On the books for this year, we've got the sponsored Instagram posts, 00:05:38.240 --> 00:05:45.360 tweets, and Periscope streams that we did from the North America and New York 00:05:43.120 --> 00:05:48.960 auto shows with Ford and Toyota. We've got a series of retail staff training 00:05:47.280 --> 00:05:52.880 videos that we produce exclusively for Intel's Retail Edge program. We've got 00:05:51.280 --> 00:05:57.039 Dbrand's product placement and sponsorship of Scrapyard War season 4. 00:05:55.280 --> 00:06:01.919 Logitech's Daniel Boral Innovation Center tour and Nerd Sports, a series 00:05:59.680 --> 00:06:07.520 that Vessel contracted us to produce as an exclusive web series for their 00:06:04.520 --> 00:06:10.319 platform. With that being pretty much 00:06:07.520 --> 00:06:15.440 it. So then, why am I telling you all of this? Most YouTubers keep this stuff 00:06:13.039 --> 00:06:19.919 very carefully hidden. The answer is because I believe you guys have a right 00:06:17.360 --> 00:06:25.199 to know. And because I hope that it'll drive home once and for all why it's in 00:06:22.960 --> 00:06:30.319 our best interest from both an ethical and even a monetary standpoint to make 00:06:28.000 --> 00:06:36.240 the best content we can make. Whether that means working with long-term 00:06:32.720 --> 00:06:38.479 partners, products from non-sponsors, or 00:06:36.240 --> 00:06:44.400 even brands who can't be asked to reply to an email about a review unit. And I 00:06:42.080 --> 00:06:49.759 do all of this hoping, even though I realize that no degree of transparency 00:06:47.280 --> 00:06:57.280 will convince some of you, hoping that I can get across the point that we aren't 00:06:52.639 --> 00:06:59.919 in fact actually paid NVIDIA shills. Nor 00:06:57.280 --> 00:07:03.680 are we obligated to bow to any other manufacturer. 00:07:01.599 --> 00:07:07.400 All of these hardware vendors, the ones on this list and any miscellaneous 00:07:05.440 --> 00:07:13.280 smaller ones I might have missed, combined make up less than 15% of our 00:07:11.120 --> 00:07:18.160 revenue so far this year. If that business went away tomorrow, Linus Media 00:07:16.080 --> 00:07:23.199 Group would not only survive, but it would continue operating the way it does 00:07:20.880 --> 00:07:27.120 without needing to cut anyone's pay or downsize our workspace. And this is 00:07:25.280 --> 00:07:31.039 thanks to the partnerships we've built with non-h hardware brands who want to 00:07:29.120 --> 00:07:34.160 reach our audience like Squarespace, Dollar Shave Club, Ting, Soilent, Gamma 00:07:32.639 --> 00:07:39.840 Labs, VideoBlocks, Blue Apron, Tunnel Bear, and more. And more importantly, 00:07:37.199 --> 00:07:46.080 thanks to you guys. You, the audience, are in black and white terms in every 00:07:42.960 --> 00:07:48.639 measurable way worth more to us than 00:07:46.080 --> 00:07:54.720 anything that a sponsor can offer. And I hope that you can understand why that 00:07:51.199 --> 00:07:57.520 is. Now, to be clear, undisclosed paid 00:07:54.720 --> 00:08:02.000 reviews are out there. I'm not saying to put away your tin foil hats just yet. 00:07:59.440 --> 00:08:05.840 Some key ways to recognize them would be manufacturer links, especially tracked 00:08:04.080 --> 00:08:10.000 or custom ones, in the video description with above the fold being a dead 00:08:07.680 --> 00:08:14.479 giveaway or supporting social posts with weird hashtags that no one in their 00:08:11.840 --> 00:08:19.280 right mind would give a [ __ ] about. But I'm just saying that thanks to self 00:08:16.800 --> 00:08:23.840 flattery incoming careful planning on my part and my teams, you won't find them 00:08:21.599 --> 00:08:27.639 here. Lionus Media Group's integrity is not for sale. It never will be. And now 00:08:26.160 --> 00:08:32.320 you know why. Squarespace featuring Squarespace 00:08:30.319 --> 00:08:36.320 domains, a new fast and easy way to search over 200 top level domain types 00:08:34.959 --> 00:08:41.519 and manage them directly through Squarespace. You get 247 support via 00:08:39.039 --> 00:08:45.200 live chat and email and a site only costs $8 a month. You get a free domain 00:08:43.360 --> 00:08:48.080 if you buy Squarespace for a year as well. And all of that includes the 00:08:46.480 --> 00:08:51.760 responsive design that makes your website look great on any device, 00:08:49.680 --> 00:08:56.399 commerce module so you can sell stuff and the classic cover page so you can 00:08:53.680 --> 00:08:59.920 have one singular page that just looks great. To start up an online presence 00:08:58.080 --> 00:09:03.440 today, start a trial with no credit card required. And when you do sign up for 00:09:01.760 --> 00:09:07.200 Squarespace, make sure to use offer code Linus to get 10% off your first 00:09:05.680 --> 00:09:10.480 purchase. So, thanks for watching, guys. If this 00:09:08.800 --> 00:09:15.200 video sucked, you know what to do. But if it was But if it was awesome, get 00:09:13.279 --> 00:09:20.160 subscribed, hit that like button, or even consider supporting us directly by 00:09:17.600 --> 00:09:23.839 buying a cool shirt like this one, or by joining our community forum where you 00:09:21.839 --> 00:09:28.000 can ask questions, answer questions, and basically talk tech with a bunch of 00:09:25.680 --> 00:09:30.720 other technofiles. Now that you're done doing all that stuff, you're probably 00:09:29.120 --> 00:09:36.240 wondering what to watch next. So, click that little button in the top right corner to check out our latest video 00:09:33.920 --> 00:09:43.720 over on the money sync that is Channel Super Fun. I'll just like throw these at 00:09:39.120 --> 00:09:43.720 it. channel. Super fun.