How We Make Money on YouTube with 20M Subs

In 2023, Kurzgesagt has existed for 10 years, insanely long in internet years. We are among the largest sciency channels on Youtube and still a bit of a black box to people. So let us talk about ourselves a bit in three parts: our backstory, how we finance our work, and the values of Kurzgesagt!

Let’s jump to a more innocent time. From humble beginnings to today, Kurzgesagt’s foundation was laid when Philipp, our founder, dropped out of high school as a teenager. Learning seemed daft and useless, and he was not interested in anything. Until a very special teacher at a school for dropouts grabbed him by the neck. The way she taught was different. She talked about connections and the big picture. She told a story. For the first time ever, Philipp wanted to learn more without being forced. It was a key life experience. Kurzgesagt tries to recreate this experience for you. Nothing is boring if you tell a good story, and we try to tell these stories to spark excitement and make you want to go on and learn more. Because of the one teacher that could do this, Philipp got a high school degree, studied history and design, and eventually started Kurzgesagt as a passion project, inspired by Crash Course World History.

In 2012, Youtube was less commercial and more idealistic. You couldn’t make a living with videos as involved as ours, and that was fine. The goal was creative freedom, and so for the first few years, it actually cost money to make Kurzgesagt. We had no outside funding, just intrinsic motivation and a few friends from university. We worked for clients during the day and on Kurzgesagt at night, 80-100 hours a week. It was a real struggle but also very rewarding.

But then, Patreon launched, sponsorships started, our views increased, Youtube changed. In 2015, the channel began to break even and then to earn a profit. But we were pretty burned out at this point, so we decided to bring in more friends and hire the first team members full time, creating a legal entity. More people meant that we could stop overworking, do more, and improve. But we also needed to earn more; the livelihood of real humans depended upon it. None of us had any experience in running a company. We didn’t plan to become big or to grow – it sorta just happened. A decade later, Kurzgesagt is not a small project anymore.

We are an animation studio, with offices in Munich and Berlin. We need computers, monitors, tablets, desks, coffee, contracts, pay licenses, taxes, rent, and insurance. In 2023, our team consists of over 60 full-time employees and a lot of freelancers around the world. Salaries alone cost millions of dollars a year, just to stay around. This creates an interesting problem: with such high production costs, how can we publish our work for free?

How we finance Kurzgesagt. We have added up our earnings from 2015 through 2022. Our sources of funding change depending on opportunities and the state of the world. Early on, agency work was our main source of income; ad revenue varies. In some years, we got more sponsorships than in others. The shop didn’t exist for a long time, then it became pretty big after we launched our calendar.

62% of our revenue comes indirectly or directly from you: you watch our videos with ads, support us on Patreon, or buy from our shop. The single biggest source of income by far is our shop that alone accounted for 40% over the last 8 years. The shop started small, but once we published our calendar for the first time in 2016, we realized it could really help us do more things, and we started producing more and more science products, from our posters to our gratitude journal or universe scented candles.

YouTube ads accounted for 13% and Patreon 9%. So without your support, we would cease to exist. Our shop and Patreon are our most important sources of revenue, and because we see ourselves as science communicators – we don’t just do merch, but sciency products that we spend hundreds of hours researching, discussing with experts, polishing up, and working on directly with the manufacturers. They are part of the science story we try to tell. It also just feels good to get directly funded by you guys and give you something back for it, on top of our videos.

YouTube ads are a crucial part of our funding as well, but they are not within our control. Then there is paid agency work, which we stopped doing in 2022; it accounted for 9% of our revenue over the last 8 years. A lot in the beginning, not much by the end. Then there are commercial sponsors advertising products - they accounted for 12% of our revenue. We also got about 7% from German Public Broadcasting for the German Channel, but ended this partnership in 2022. Finally, there are institutional sponsors representing about 10%. Some people take issue with this – especially Bill Gates has come under public scrutiny, and we’ve been criticized for even working with organizations funded by him.

So let us look at this 10% in more detail: about 3% of our revenue over the last eight years came from the Gates organizations for a wide variety of topics, often suggested by us. 5% comes from Open Philanthropy and is only used for specific projects. With these funds, we have started Arabic, Hindi, Korean, Japanese, Portuguese, and French channels, bringing more free science content to more people. Then there is a two-year funding for original TikTok content, which gives us freedom to explore and learn how to do short-form science communication. The final 2% came from other organizations like the Red Cross or the UN, for example.

We choose institutional sponsors carefully, but if organizations want to fund videos that help us spread quality information about relevant topics, this is an easy yes for us, if we have the capacity for it. On top of that, the institutional sponsors we are working with align with our values. We have contracts with every grant giver or sponsor that bars them from editorial influence, other than suggesting topic areas like “global health” or “climate change.” We agree on video topics together, but sponsors can neither influence details nor our conclusions. The final decision always remains with us.

And usually, we develop the topics of the videos autonomously and tell the sponsor what we are doing afterward. If you are interested in how we research our videos in detail, our head of research wrote an article about it. Running an educational YouTube channel is a balancing act that we take very seriously. We are doing our best to maintain this balance, adjusting whenever necessary. As a team and company, we want to grow to give more people access to a science-based outlook on the world.

This brings us to our final topic – why are we doing Kurzgesagt? Our Values and Our Vision. Our core mission is to spark curiosity. We want to make science and humanism accessible for as many people as possible. The effort we put into creating our videos is a way of achieving that – our videos are beautiful because that helps to spark curiosity, to understand complex topics, and because it just feels good to create and watch. Our research is as intensive as it is so our videos are a good simplification of very complicated topics.

We want to make people excited about science so they rediscover subjects they hated in school and see how amazing they are. On top of curiosity, we want to inspire long-term thinking and a positive, constructive outlook. Being optimistic about the future of humanity is not mainstream, and we think this is horrible. Pessimism often sounds smart and gets more views, while optimism can sound naive, but this is a bias that is not helpful for us as a species.

So despite the gloominess of many topics, we want to approach them with informed and well-researched optimism – not brushing humanity's very real challenges aside, but also not falling into the trap of pessimism. We want to inspire you to dream a little about the glorious future that we could actually build – but only if we believe it is possible.

In the long run, we don’t only want to do this on Youtube. The idea is for Kurzgesagt to be a positive influence across more media. On our TikTok channel, in the long-form content we are exploring, in apps, in the VR game that will be released later this year, and the games we plan to make in the future. Our shop is a central part of this vision: we start our stories with a video and end them with a poster. There are so many things we want to do.

And thanks to you watching this right now, we have the freedom to work to the best of our knowledge and ability. In the end, we hope you like what we offer and that we will be doing something worthwhile for as long as we exist. And hopefully, we’ll have a lasting impact by making science and learning more fun for as many people as possible.

If you personally want to help us do this, you can watch and share our videos, check out our shop, become a Patreon or give us an ad blocker exception. We exist because of you, and you have no idea how much we appreciate that you are here. And hopefully, we are less of a black box now.

In any case, doing Kurzgesagt for a decade has been a pretty crazy ride. So from the whole team – thank you so much for being with us all these years.