Celebrity, Revisited (Again)
When you step into the world of Mr. Beast, you so easily get caught in the momentum that it’s hard to slow yourself down. We watched it happen last week (or this week, if you weren’t there live) when “The Besties” interviewed him at the All-In Summit.
In a quote first teased out by Phillip Jackson at Future Commerce, Mr. Beast quipped at one point that retail was easy: “You put it on the shelf and people buy it.”
The normally challenging All-In group let him go. No one stopped him. No asked him how that could be. Of course it was easy for Mr. Beast, because he’s, like, a top-5 famous person in the world.
In fact, quite a few seemed like they wanted so badly to be “besties” with Mr. Beast that they leaned into his narrative that he doesn’t spend any money on marketing while he simultaneously told them he spends about $2.5 million on producing each video.
As longtime readers of this newsletter know, we have reframed our thinking of Mr. Beast as a modern-day Disney flywheel.
As we previously wrote:
Feastables is eschewing a number of traditional brand retention elements in favor of the unfair advantage that comes with having a creator who is best known for games, hijinks, and stunts. The latest? A two-pronged launch: one at Walmart, where there was promise that members of Mr. Beast’s crew, would be hanging out (a version of his “ultimate hide and seek” episodes); the other, an online game of Rock, Paper, Scissors, with daily giveaways and a grand prize (a version of his “win a Lamborghini” episodes).
The message?
You may not ever get selected to be in a Mr. Beast video (he has more than 100 million subscribers), but that doesn’t mean you can’t participate in the world of Mr. Beast. He’s bringing YouTube to IRL.
The Feastables products/Mr. Beast overlap is so strong and so well blended, that it’s quickly becoming hard to tell which is the primary product. And that’s near genius. The products—chocolate and cookies thus far—are not just chocolate bars and cookies. They’re tickets to a world his fans know deeply.
It seems, too, that Mr. Beast thinks the same way.
During his All-In Summit conversation:
“It’s nice, because the same people who I would take pictures with in Walmart when they see our product there they're like, ‘Oh, it's the guy from YouTube,’ and they'll buy it.”
In a podcast interview from 2022, he told “Iced Coffee Hour:”
“I just want to keep making the best videos possible. I have to reiterate … I’m going to sound like a broken record. Everything I do stems from that. If I stop making the best videos, people stop watching. And then Feastables is irrelevant, Beast Burger is irrelevant, all the companies are just literally irrelevant.
What irks us about this is not what’s being built. We’re far from haters in that regard. But we are irked by how it’s being framed: through a lens of separate, independent businesses (and the benefits of accounting practices that reinforce it).
The reason this irks us is mostly intellectual dishonesty (since we have an overriding personal distaste for it), but it’s also the fact that it obfuscates the truth around how expensive it is to break the mold and grow as quickly as Feastables is.
The narrative on display at the All-In Summit was one of independent entities with mutual benefits. But that can’t be. Not if “all the companies are just literally irrelevant” if the production side goes south.
So, let’s set it aside, treat Mr. Beast as Disney, and look at numbers (briefly):
Self-reported production costs of $2.5 million per video is up from $1.5 million per video around a year ago, a 60%+ YoY increase. Those videos roughly account for Mr. Beast’s corporate marketing costs. $2.5 million every two weeks is $65 million annually. The other videos have additional production costs (much less) and Feastables has some marketing expenses. Let’s assume they’re nominal and exclude those for now.
Back-of-napkin revenue, which David Saks did in front of Mr. Beast, was that Mr. Beast videos gross $60 million per year (which Mr. Beast didn’t dispute) and $200 million in Feastables revenue (which Mr. Beast walked back, but didn’t give a new, firm answer).
So, let’s assume “a couple hundred million” from Feastables really means $150 million because Mr. Beast felt comfortable rounding up (hey, we all do it) and $60 from Mr. Beast’s videos. That’s $210 million gross, with some sponsorship money and a now-defunct Beast Burger arrangement not included.
In the Disney-fied view of Mr. Beast, that’s 31% of gross revenue going to marketing.
You know what Hershey’s spends? 23%.
In order to disrupt the “sleepy space where they don’t really innovate and it’s kind of boring,” Mr. Beast is allocating 35% more of his budget to marketing.
This, it seems, is the big insight. And it’s one it’d be much more interesting to hear him talk about.