There was a rumor in January that MrBeast was renting out Disney World for a massive game of hide and seek.
It wasn’t true, and that’s too bad. Not because of the YouTube video it would have given us, but because it would have given us a nice, poetic bow to underscore this whole piece: To understand MrBeast (Jimmy Donaldson), you mostly need to understand the making of Walt Disney.
One was a young kid with a penchant for entertaining in a way that others hadn’t and the other was … well, the other is just the same.
This is not a piece about the genius of either individual. There is enough of that.
But if you want to understand Jimmy,—as well as where he’s at in his potential to reshape entertainment, a good way to start is to understand what it took to do it the last time.
And that’s Walt Disney.
Entertainment is Marketing, Duh
The surest sign of the hype cycle of the creator economy is when the venture capitalists begin their hero worship.
In Jimmy’s case, we saw just that back in September, as Donaldson co-headlined along with household names like Gwyneth Paltrow and Elon Musk.
MrBeast, at one point discussing Feastables, quipped that retail was “easy” (his words) — “You put it on the shelf and people buy it.”
You’d think David Sacks, one of the more cynical “Besties” of the All-In Pod, might have called B.S. But, no. In fact, no one stopped him. No one asked him how that could be. Of course retail is easy for MrBeast because he is Feastables; the brands are inseparable, and he, Donaldson, is a (rounding error here) top-five famous Youtuber.
In fact, quite a few, Chamath Palihapitiya being the biggest offender, seemed like they wanted so badly to be “besties” with MrBeast that they leaned into Jimmy’s overstated narrative that he doesn’t “spend any money on marketing” — while simultaneously bragging that production costs have ballooned to $2.5 million for some recent videos.
That was a mere five weeks before Feastables rebranded, and became the jersey patch sponsor of the Charlotte Hornets. Jersey badge sponsorships go for an average of $21M across all NBA teams; though Feastables may have scored a sweet tooth of a deal, given the team finished second-to-last in their division in the 2022-2023 NBA regular season.
So, while no lies were detected, it’s on a technicality. As far as we can tell, MrBeast’s production studio and Feastables are two separate businesses, but Feastables could not exist without its most valuable marketing channel, MrBeast’s 205M global subscribers to his dozens of YouTube channels. Intellectual dishonesty at its finest.
The Feastables/MrBeast overlap is so strong and so well blended, that it’s quickly becoming hard to tell which is the primary product. The products — chocolate, gummies, and cookies thus far — are not just chocolate bars and cookies. They’re tickets to a world his fans know deeply.
You may not ever get selected to be in a MrBeast video (he has more than 100 million subscribers), but that doesn’t mean you can’t participate in the world of MrBeast. He’s bringing YouTube to IRL.
It seems, too, that MrBeast thinks about his businesses 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.”
Finding Synergies: MrBeast is a Modern Walt Disney
Any framing that Feastables lacks a dependence on MrBeast obfuscates the truth around two things:
- How expensive it is to break the mold and grow as quickly as Feastables is growing
- How expensive it is to break the mold and grow as quickly as MrBeast is growing
While Disney’s “synergy map” is the obvious choice for MrBeast-Disney parallels, this, it seems, is where the historical similarities really come into play.
Disney, in 1937, released Snow White and the Seven Dwarfs through his production studio. A few years earlier, he had estimated the film could be produced for a mere $250,000. It came in just shy of $1.5M.
Disney had to mortgage his house to help finance the production and take out a $250,000 loan to finish it.
The payoff was immense: Snow White grossed $8M.
Three years later, Disney struck again with Fantasia (1940) — but almost by mistake. The movie was originally a short with spiraling production costs that could certainly not be made back without going even bigger. Fantasia didn’t reach Snow White numbers, but it remains a top-25 highest-grossing film in U.S. history (inflation-adjusted).
Disney, it seems, flew as close to the sun as possible. A financial misstep, perhaps, and we wouldn’t be talking about him in the way we do today. The comparisons to Jimmy’s risk-taking enterprise seem obvious to us, and Walt’s own words mirror the modern content creator:
“For years we got by on ‘shorts’ — borrow some money and make a ‘Mickey’ or a ‘Duck’ and then pay off enough to borrow some more,” Disney told the Los Angeles Times in 1964. “Animated cartoons are more expensive to make than live-action films. Where they pay off is on revivals. Every seven years they come back for a new audience. And they don’t date like live-action does.”
But he made it.
And that’s exactly what MrBeast is trying to do. However, he lacks the power of the monoculture that Walt Disney enjoyed.
Absurd as it may sound, the world’s largest YouTuber has not “made it”; not yet. He is, in fact, earlier in his production career than Disney was when Snow White was released. At present, MrBeast is building a $14M production studio in Greenville, North Carolina (a town that lacks an international airport), taking on rising production costs, and trying a modern version of getting by on “shorts.”
For a minute, then, let’s treat MrBeast 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
- $2.5 million every two weeks is $65 million annually. We’re assuming this is main channel only and that other videos have additional production costs. Let’s assume they’re nominal and exclude those for now.
Back-of-napkin revenue, which David Saks did live at the All-In Summit in front of MrBeast, was that MrBeast videos gross $60 million per year (which MrBeast didn’t dispute).
So, that’s production costs of $65M annually, currently growing at 60% YoY, and revenues of $60M, with YouTube subscribers growing at roughly the same rate.
He is, it seems, a modern-day Walt Disney — at least financially. And he needs a big bet. Walt’s insight, however, was that animated cartoons have a pay-off in revivals and IP. Note the above, “every seven years they come back for a new audience. And they don’t date like live-action does.”
MrBeast has yet to publicly share any meaningful information on the half-life of his videos. But he does seem to buy into Disney’s insight. From a writer's job description for his production studio:
“It takes a team of the world’s best to stay cutting edge in an ephemeral culture. Therefore, we are looking for obsessive people that are smart and well-versed in content creation…Writers are key to bringing big ideas to life. They are internet savants, storytellers, scientists, and conduits for all things trending. While they are creatively inspired by their surroundings, they must also have a unique ability to understand that video virality is purposeful.”
And this is just videos.
Unlike Disney, MrBeast sells more to his fans instead of borrowing from the bank. And that, perhaps, is Feastables' current value lever.
But it cannot be the final value lever to be pulled. He’s called snacks a “sleepy space where they don’t really innovate and it’s kind of boring.”
During the All-In Summit, he stated that Feastables would do “a couple hundred million” this year. That, probably, really means $150 million because MrBeast felt comfortable rounding up (hey, we all do it). Including the $60M from MrBeast’s videos, that’s $210 million gross.
With $65M in marketing expenses (his main channel production costs), that’s 31% of gross revenue going to marketing. Inclusive of the rebrand and NBA jersey sponsorship ($1M + $10M, generously), we’re up to $76M, or 36% of gross revenue on marketing, for a fledgling snacks brand.
Do you know what Hershey’s spends? 23%.
Retail, it seems, is easy, when you allocate 35% more of your budget to marketing than the incumbent.
Still, all of it results in MrBeast sort of just barely breaking even across it all.
A $5M loss on the production side seems likely to be offset by a $3M profit on the Feastables side (assuming something like a 20% profit margin, since marketing is a nominal expense on that balance sheet). There are probably sponsorship dollars and a few other things that help round it all out. The balance sheet might balance in the short-term, provided he doesn’t need to tap debt or equity in the face of rising rates.
There are many more sources of both revenue and risk for Jimmy. For instance, his ongoing spokespersonship with Shopify, the “entrepreneurship” company. And then there’s his insistence that he can’t sell sponsorships on his main Youtube channel, because, “most brands can’t afford my reach.”
To his credit, none of this seems easy. In fact, it seems incredibly hard. It takes a gamble, and a generational creator, to make this type of investment and impact into the culture.
But to sustain it will take something else.
A financial misstep, though, and the hype cycle will end. He’ll become another zeitgeist relic (Remember MrBeast!? What happened to the creator economy, anyway?) rather than a persistent part of the culture.