How do sponsorships influence us as a channel?

One thing many youtubers don’t like to talk about in too much detail are sponsorships. Videos that are supported by a company or organization with money.

Youtube ad revenue has been declining consistently over the years, and just as I was writing this, for many creators ad revenue tanked, as advertisers clashed with google in the last few weeks. So sponsorships have become the place where the real money is for many professional creators.

How much a sponsorship pays varies wildly. It depends on the creators, how big their audience is, type of content and how business savvy they are. A very cheap sponsorship can start at a few hundred dollars and the most expensive ones make the equivalent of a year’s salary. There are also different categories, from a simple shoutout, like you probably have seen many from audible or lootcrate, to whole videos dedicated to a topic or product.

For smaller creators they can mean the difference between doing Youtube as a hobby or as a full time job. And for youtube channels consisting of teams they mean the difference between running a successful business or having to downsize and letting people go.

Next to crowdfunding on Patreon, which might be the single biggest game changer for creators in the last years, sponsorships are a very important part of the education scene of youtube.

As far as I can tell, everyone is doing them in some form or another. Many educational channels would not be able to exist without them. Videos explaining things take much longer than other content and are less likely to go viral. And other profitable forms of income, like for example product placements, are not appropriate for science videos.

If you also have a small team, you basically need to do sponsorships to survive. (Or a benefactor like PBS Digital that supports a small army of great science channels).

For Kurzgesagt sponsorships are an important part of our yearly budget, representing about 20% of our income last year.

But they also can make creators nervous:

There is always the suspicion that sponsorships compromise the creator. Do they sell out their influence? To be fair this certainly has happened but I assume it is the exception — especially in the education scene, which people do not typically enter to sell out (much easier fields to do that in).

But it is still a fair question to ask. Since we make educational/knowledge based content — can you pay us to make something look good or bad? We have a non-trivial influence over the opinion of many people after all.

So. How does Kurzgesagt do sponsorships?

Usually potential sponsors get in touch with us after seeing one of our videos they particularly liked or that is related to what they do. We start a discussion about what they are looking for and whether we can work together.

Kurzgesagt is mostly looking for a good fit that does not feel weird on the channel. Does the sponsor look for a video about a certain topic? Do they want a shoutout? Do they want to promote a product that would feel totally random? Have we been planning to do a video about their field anyway at some point in the future?

The better the sponsor aligns with us the higher the chances are they want to work with us and vice versa. Which is also one of the reasons we want to talk first and get to know the person responsible on the other side, as well as give them a chance to get to know us. After agreeing to the ground rules and a fee we are getting into the contract work.

We sign a contract that, among other things, states that Kurzgesagt has the last word on the content of the video and especially the script.

If the sponsor does not agree to that we won’t do the sponsorship. And in general we would not suggest to anyone doing these kind of deals without a contract that clearly lays out the terms of the partnership in detail. (Contracts are made for situations when things go south — nobody needs a contract when things are going great).

An example for sponsorship that did not work out was when a big pharma company saw some of our health related videos and asked us to explain a very interesting disease. I would have loved to do that — diseases are a pet hobby of mine. And getting payed to do very interesting research and getting access to experts working on curing it would have been amazing. But their legal department just did not approve that they would not have the last word over the video. And so after a few rounds of talking with them we parted on good terms. (When this happens we often do commissioned videos for the company instead of a sponsorship.)

But wait you might ask. If these are the ground rules, doesn’t the sponsor risk that we say things about a topic that they do not necessarily would say about it? Well, yes. We need their trust that we are going to make something as good and as unbiased as we possibly can. Without trust sponsorships do not work — both sides are taking on a bit of a risk.

The way we see it, if you sponsor Kurzgesagt you basically create an incentive for us to cover a specific topic or to get a spot in our video. Nothing more, but also nothing less. The sponsored video will not be treated differently. It is a true piece of content, no strings attached.

This also means that we want the video to be as accurate as possible — which we also include into the contract. We guarantee that at least one expert will check the script and give us „official“ thumbs up.

If the sponsor wants their own experts to check the script that is cool with us but in this case we make sure that another scientist, who is not affiliated with the sponsor, also gives their approval.

So, if an oil company came along and would like to sponsor a video about oil disasters, would we do it? If they agreed to sign our contract, then yes, I think we would at least seriously consider it.

Would they like the video? Probably not a lot.

I have no problem accepting funds from a controversial company as long as they know beforehand how the sponsorship works and are cool with that. I need to know that we won’t compromise the content for them and that we have a legal document that protects us from interference.

In reality this is not a very realistic problem though because we are very upfront and honest about all of this. We want a good and respectful relationship with the people we work with. Also we are mostly approached by organizations are fans of our existing videos or that want to sponsor topics that are related to our content anyway. So there is very seldom a conflict here.

Most of our sponsors are NGOs but we also worked with corporate sponsors and so far we did not have a real negative experience. Quite the opposite really, and as far as we can tell our sponsors have been very happy too.

(video sponsored by Audible)

Speaking of which, what do the sponsors get out of it?

Well first and foremost „real“ very high quality content. Not a piece of marketing. We don’t treat sponsored videos any different from regular videos but will put as much work and love into them as we do with all of our videos. It also would feel disrespectful to me to treat a sponsored video different — why would you invest less energy when someone is nice enough to support you?

If I dare say so, we are very good at explaining topics that others have struggled with. Many organizations have difficulties to communicate things that are essential to them and we can help them with that. Also the video will be seen by at least a million people. Probably by much more. As of now we guarantee one million views in the first six weeks of a release.

Time for a mini conclusion: So how neutral are we if we are getting money? Is it changing out content? At the very least we are very aware that we might get influenced or influence ourselves unconsciously. And as a consequence we are much more self critical when doing these kind of videos.

If you ask me I truly believe that our sponsored videos are not in any relevant way different from the not sponsored ones. If I did think they would compromise us, we would not do them.

Ok! How about some examples? I can’t get into too much detail — but I can tell you a bit about our two biggest sponsors so far: the Australian Academy of Science and The Bill & Melinda Gates Foundation.

The Australian Academy of Science approached us because they wanted to promote their platform for Australian science. For that they sponsored three videos. They had a list of about 20 topics and we could choose three of them. This was awesome for us, because for one we prefer to sell package deals because they make our income a little bit less random. And they gave us access to amazing experts in the field of quantum computing.

(video sponsored by the Australian Academy of Science)

All in all I think the sponsored videos reached over 11 million views — if you consider how much money you need to spend in media budget to get to that number, our sponsorships are really super cheap in comparison.

But our biggest supporter so far has been the Bill & Melinda Gates Foundation. And to be honest, just as the huge growth of our support on Patreon (❤), the grant the foundation gave us was one of the reasons we could transform Kurzgesagt into the powerhouse we are today. Their restrictions were even softer, which has to do with what they want to achieve. The foundation wants to encourage creative ways to communicate global health and development topics better. Their briefing was basically:

„Please make more videos and keep full editorial independence. These are the topics we want the public to be interested in, if you would kindly do something related to that. Here is an information dump and a big number of experts if you need them. Ok bye!“

What can I say. For us this is the best case scenario. The foundation people have been nothing but hands off. We probably would not have made the „Horrible Parasites“ video without the grant for example. But honestly it was an awesome creative challenge and it is one of my favorite videos we made so far.

(video sponsored by the Bill & Melinda Gates Foundation)

Ok, this should cover it all.

Sponsorships are still a little bit insecure. The conditions in online video change all the time. Right now we are safe for 2017 but we don’t know what will happen next year. So we are looking for new revenue streams, although we do not technically need to, yet. For example, we’ll try to expand our merchandise store a whole lot this year and will see if that is not something that could be a source of income for us.

If Kurzgesagt would lose the sponsorship part of our income it would be hard but we would survive. Patreon remains our most important source of income but I will talk about this in more detail another time. The best insurance we have is that we are also a design agency and do commissioned work. Which is how we stayed afloat the first two years of the channel, when producing the videos cost way more money than they earned.

Ok, time to wrap up. We are trying to share more about our processes and how we work as a team and as a company. Let me know how you liked this article, I would like to make this a regular thing and explain how Kurzgesagt works bit by bit. — Philipp