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How A YouTube Company Actually Makes Money

2022-09-02 · explainer · Hank · 3:48 · watch on YouTube

Topic: Projects · mode: Explainer · tags: self promotion

Hank breaks down how Complexly, his roughly 50-person educational YouTube company, pays for itself: YouTube ad and Premium revenue, grants, crowdfunding, its own ad sales, licensing and a small share from physical products, which is why it is now selling five show calendars.

What is said

The parts of the video and what is said in each (★ — how much it matters to the video).

00:00:00 — Complexly gives educational videos away; around 50 employees; YouTube ad and Premium revenue share

  • ★★ Hank says his company makes educational videos and gives them away, not a great business model but one that works; it keeps slowly growing and has around 50 employees. — 00:00:00 · Complexly
  • ★★ Hank imagines Complexly as a project of Nerdfighteria, which is where it started. — 00:00:00 · Complexly, Nerdfighteria
  • ★★★ YouTubers get 55% of the ad money on their content, and YouTube shares 55% of YouTube Premium money after record labels' cut, which comes to significantly more than an ad-supported view. — 00:00:00 · YouTube, online advertising
  • ★★★ Because most people aren't on Premium, it is around 3% of Complexly's revenue, while YouTube ads are around 28%. — 00:00:00 · YouTube, Complexly

00:00:48 — Grants, crowdfunding, Complexly's own ad sales and licensing

  • ★★★ Funders who see that Crash Course generates far more value than it can capture give grants; grant income fluctuates, but last year (2021) it was about 29% of revenue, about the same as YouTube. — 00:00:48 · Crash Course, YouTube
  • ★★ Grants usually have strings attached, some extra stringy, but Complexly always makes clear funders can give input and ideas while Complexly decides what gets created. — 00:00:48 · Complexly
  • ★★★ Just under 20% of revenue is crowdfunding through Patreons or the Crash Course Coin, given because people know their work isn't sustainable under current internet business models. — 00:01:17 · Crash Course coin, Crash Course
  • ★★ Hank thinks supporters give from a mix of selfish motives (wanting the content to exist) and selfless ones (paying so everyone can access it). — 00:01:17
  • ★★★ Crowdfunding, unlike advertising or grants, comes with no strings, so it not only makes their work possible but better, because Complexly gets to make all the choices. — 00:01:46 · Complexly
  • ★★ At 14% of revenue Complexly sells its own ads through an internal sales team, like Policygenius on Dear Hank and John or CuriosityStream on SciShow: more of a pain, but higher rates and no split. — 00:01:46 · Dear Hank and John, SciShow, Complexly
  • ★★ Complexly also licenses its free content to platforms, such as Crash Course on CuriosityStream; licensing was about 5% of revenue last year (2021). — 00:01:46 · Crash Course, Complexly

00:02:16 — Physical products at 2%: five calendars for Complexly shows

  • ★★ Physical products, like the Microcosmos microscope, are last at 2% of revenue, and Complexly would like to do more. — 00:02:16 · Complexly
  • ★★★ Complexly is selling five calendars for five shows: Eons and Bizarre Beasts art, James Weiss's Microcosmos microphotography, and SciShow and SciShow Space images, printed in the US with facts, shipping everywhere. — 00:02:16 · Eons, Bizarre Beasts, Journey to the Microcosmos, SciShow, SciShow Space, Complexly
  • ★★ Each Complexly show sustains itself with a different mix; some take a long time to break even, and some never do and are cancelled. — 00:02:45 · Complexly
  • ★★ It often feels like they don't know what they're doing because no one has done this before: companies like this didn't exist ten years ago when Complexly started. — 00:02:45 · Complexly

00:03:14 — No one has done this before; Hank will report next year on the 2%; sign-off

  • ★★ Hank proposes to come back next year (2023) and report whether the 2% from physical products changed because people bought calendars, available at complexlycalendars.com. — 00:03:14

In the description and comments

  • ★★ The description asks viewers to get a calendar at complexlycalendars.com. — video description
  • ★★ The description says YouTube revenue share is still a huge part of Complexly's business, though it used to be about 90% and has been shrinking. — video description · YouTube, Complexly
  • ★★ In a channel comment Hank confirms Premium money goes through the record labels' cut: it was the only way labels would allow ad-free YouTube, since that means ad-free music videos. — creator comment · YouTube
  • ★ In a channel comment Hank says he has always argued YouTube should have refused the record labels' terms for Premium. — creator comment · YouTube
  • ★★ In a channel comment Hank says he gets a joint salary from DFTBA and Complexly, but most income is from books and speaking; his wealth comes from book sales and selling VidCon, and they now donate more than he makes. — creator comment · Complexly
  • ★★ In a channel comment Hank explains grant strings: agencies fund specific topics and require costly impact reporting, while advertisers avoid controversial topics. — creator comment

Threads in this video

Where the stories that moved here went next

Mentioned

Central: Complexly · YouTube

Also: Projects: Bizarre Beasts · Crash Course · Dear Hank and John · Eons · Journey to the Microcosmos · SciShow · SciShow Space

Works: Complexly calendars · Crash Course coin · Microcosmos Microscope

Organizations: CuriosityStream · Patreon · Policygenius

Concepts: crowdfunding · online advertising

Places: Solar System

Products: YouTube Red

Only in the description or credits: James (person, mentioned from 2019)

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