Why YouTuber and philanthropist MrBeast spent an estimated $3.5m recreating the Netflix hit Squid Game.
Bigger & better: Video success formula
MrBeast AKA Jimmy Donaldson has hit upon a formula for success on his YouTube videos. The formula has paid off handsomely in video views and subscriber figures. His main YouTube channel boasts 81.2 million subscribers. Combined, his YouTube videos have been viewed 13.5 billion times.
Donaldson is often credited with pioneering a video genre that centres on extravagant stunts with a philanthropic angle. Incrementally his videos are evermore elaborate. Production intricacies and high value of prize giveaways such as Lamborghinis require big cash investments. This is the essence of his formula. More money → Better videos → More views → more money. In September Donaldson told Logan Paul on the Impaulsive podcast that he spends $4 million on making YouTube videos per month.
Mr Beast's long-awaited real life Squid Game finally landed last week (24 November). 456 players went head-to-head hoping to win $456,000 (£341,000) in prize money. As with the original Korean Netflix sensation the contestants played games including tug-of-war and red light green light. Donaldson’s homage to Squid Game video is a natural progression of his winning formula: More money → Better videos → More views → more money.
you are actually ridiculous… how much did the total project cost?— Ghost Forpz (@forpzy) November 13, 2021
Cycles have a ceiling, however. Donaldson needs to continually fuel the machine increasing video views to offset the increases in costs per episode. How does Donaldson fuel the machine? He extends his product offering and diversifies his interests.
Donaldson operates two sub channels of YouTube: Beast Reacts and MrBeast Gaming these sub channels complement MrBeast’s business because episode production is minuscule in comparison to his main channel yet revenues consistently perform well. The revenue proceeds of which are re-invested into his main channel.
Market penetration & market expansion
With Squid Game Donaldson is doing two things: he’s further penetrating his existing market whilst also expanding that market geographically. MrBeast’s primary YouTube channel ranks 6th in the US. Subscriber growth amongst his home market has slowed as he reaches high utilisation among his target audience. His channel gained an extra 100,000 subscribers per day in the period leading up to the Squid Game upload. On the day the video was published subscribers jumped by 700,000. Then by 1.4 million the following day. 900,000 the day after and 1.3 million the day after that.
Jumping on Squid Game maintains his cultural relevance whilst bringing awareness of his content to a new and wider audience. Squid Game is Netflix’s biggest hit. It was the most popular show on the video-on-demand streaming service in more than 90 countries.
By running his own version of Squid Game Donaldson is pushing his existing formula of YouTube videos without having to tinker with his winning formula. Squid Game is designed around action, not dialogue making it attractive to non English speaking countries. With one video he pursues both a market penetration plus market development strategy.
Scale buys Donaldson influence. Since uploading $456,000 Squid Game In Real Life! on 24 November the video has been viewed 113,200,000 times* helped by appearing on YouTube’s trending page and through world-wide media attention. This scale of popularity enables Donaldson to work in various other business and philanthropic areas. YouTube scale brings him several revenue streams: AdSense, brand collaboration - in this instance from game outfit Brawl Stars - plus micro payments in the form of tipping from fans, channel membership, and merch.
Maintaining the flywheel of his video success formula allows Donaldson to devote time and resources to charity. In 2019 he and fellow YouTuber Mark Rober set up #TEAMTREES a charity which, to date has planted 23.5 million trees worldwide. Last month the duo came together again. This time their aim is to clean up the world’s oceans. #TEAMSEAS has a goal to raise $30M by January 1, 2022. As of today, the charity is over halfway to hitting his goal having raised $16.7m. Every dollar added pays to have a pound of rubbish removed from the ocean.
Scale also enables Donaldson to rollout new products and services targeted at his existing markets to achieve growth. In December 2020 he launched MrBeast Burgers selling a million burgers in the firm’s opening eight weeks.
In April Donaldson announced his partnership with Jellysmack to optimize and distribute his YouTube videos on Snapchat and Facebook in order to further boost his reach and grow his fanbase.
Scale + Generosity of give-away + charity work = deep trustworthiness with his fan base. This makes him an ideal ambassador for fintech companies. Donaldson both promotes and holds equity in Current a neo-bank. The relationship blurs the line between content provider and business owner.
Looked through the lens of these factors the $3.5 million spent on production and prize money for the Squid Game video forms a strategic part of Donaldson's long-term growth plan.
*Video views climbed 3 million throughout the day on 29 Nov from 07:00 when I started sketching out the article to 19:25 when I laid it out as an article.