Mr Beast isn't Helping Advertisers Feel Good About Creators

The great Crunchyroll mistake, and retail media overload

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Mr. Beast is not having a good month. Suddenly, neither is Amazon Prime.

Let’s review:

• The YouTube mega star was the subject of a brutal New York Times piece uncovering some supposedly awful conditions on the set of his $100 million (!) Amazon Prime series

• A longtime Beast contributor/co star, Ava Kris Tyson, was accused of grooming minors on YouTube , leading to her dismissal

• Now, a group of would-be contestants on his Amazon show have filed a class action law suit alleging awful conditions and sexual harassment

Not good. This all comes on top of a slew of other budding, weird controversies, such as Beast (real name Jimmy Donaldson) turning a lot of folks off for his philanthropy stunts, like curing a bunch of people of blindness for views, dealing with safety concerns at his company, and even grappling with the notion his videos are so popular that they are too expensive for many brands to advertise in.

To top it all off, a venture capitalist recently compared Donaldson’s rise to that of BuzzFeed (once a compliment, not so much any more). Plus, he and Logan Paul are rolling out a product aimed to take on Lunchables.

My wife once had another mom shame her for giving our kids Lunchables. Think alot of parents are going to be excited to give their kids a mass produced lunch put together by this duo?

Since, fair or not, Mr. Beast has become the face of the creator economy, none of this can be good for creators, particularly those who rely on brands, or hoping for big media distribution.

Here are some immediate questions that come to mind:

• What are the chance that the Amazon show never airs?

• What brands are going to want to advertise on this show?

• Is this going to give other streamers pause, even as they look to find the next great creator crossover?

After all, many of these top YouTubers and TikTokers are still young adults, and no offense, but young adults aren’t always reliable or demonstrate the best judgement. Are the next crop of investors and more importantly TV buyers going to be suddenly wary of this world? Yes, I know, many creators say they don’t aspire to be on TV - but many people also enjoy money, security and exposure. Is this going to cast a pall over the entire space?

I personally hope not.

On a Crunchyroll

In 2021, AT&T sold Crunchyroll to Sony for $1.2 billion, amidst a selloff aimed at shedding media assets to help with the debt incurred by the telecom giants disastrous Warner Media acquisition. That deal didn’t get a lot of attention at the time, considering that the formation Warner Discovery was stealing the spotlight, while AT&T clearly company needed to prioritize getting leaner - and getting cash in hand for its new reality.
At the time, Crunchyroll had 5 million paying subscribers. Today, it has 15 million. The streaming service, which super serves anime fans is also branching in games and movies, while attracting a broadening, influential and hard to reach audience.

Think WarnerDiscovery could use Crunchyroll now?

“The anime fan is a special, special fan,” said Rob Sands, Senior Vice President, Business Development, Crunchyroll on my podcast this week.

“They're sticky. They consume content and then they share about that content. And they're also willing to spend money, which is really hard to find.”

Yes, it’s short cited, and easy to Monday Morning Quarterback, but big media often struggles with younger audiences, particularly gamers. Not only does Crunchyroll have a growing mobile gaming business, it produces hundreds of live events, per Sands, along with 10 of the top 20 grossing movies and anime of all time. “We're not everything to everyone, we're everything to someone.”

Exactly the kind of fandom that most streaming services would have once thought too niche, and would now kill for.

Attention All Shoppers

Terry Kawaja, CEO of Luma Partners moderated a panel on Wednesday at the Smartly Advance event in New York, where he started off citing an Ad Age report that mentioned how retail media spending is growing so quickly that it’s trending toward accounting for upwards of 20% of all digital media spending.

He, along with several other panelist at the event, openly wondered whether at some point, this massive shift in dollars might overwhelm the current ad buying infrastructure in digital.

“I can’t see a future where agencies are going to train employees on the Nth retail media dashboard,” he said. “There will need tot be some aggregation, some convergence.”

This is something I’ve written about a lot lately - the seemingly inevitable need for consolidation in this space. 

Yet Megan Clarkin, CEO of Criteo, explained why none of the hundreds of retailers that have jumped into the space will likely be inclined to pull back any time soon.

“They have audiences, and they can monetize them, sometimes at 75% margins,” she said. “They saw what Amazon did. The saw Walmart turn nothing into $4 billion dollars.”

If anything, there may be an even larger flood of dollars coming, explained Clarkin. Of the 200 plus retailers that Criteo works with, the majority of retail media dollars they have captured have been funded out trade budgets, with some national ad dollars sprinkled in.

It’s likely that these teams and their budget will soon integrate at many big marketers, Clarkin predicted. “The trick to watch out for in the future - those two teams start to come together, and [macro budget] decisions will be made on data. In that moment, you’ll see more and more trade budgets to digital.”