ME30403 Business Case Study

UNIVERSITY OF BATH
Department of Mechanical Engineering
ME30403 Business Case Study

BUSINESS CASE STUDY REPORT

MR BEAST

Candidate number 12640

7 March 2022

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WHAT
Meet the 23-year-old American YouTuber Jimmy Donaldson (Figure 1), known as MrBeast, famous
for making attention-grabbing videos and giving away millions of dollars to charities and strangers.
As of today, his main YouTube channel “MrBeast” has over 90 million subscribers placing it on the
8th place in the world by the subscriber count. (1) Over the past 10 years his channel accumulated
almost 15 billion views from only 719 uploads resulting to an average viewership of over 20 million
per video. (2) More detailed statistics can be seen in Figure 2.

Figure 1 – Jimmy Donaldson (3) Figure 2 – “MrBeast” YouTube channel statistics as of 17.02.2022 (1)

MrBeast started making YouTube videos at the age of 12, creating funny compilations of highlights
in playing "Minecraft" and "Call of Duty" as shown in Figure 3. In 2015 and 2016, Jimmy began to
gain popularity on the platform due to his "Worst Intros Series", where he was reviewing and
making fun of the YouTuber introductions he discovered on the site. (4)
In January 2017, Donaldson uploaded a video showing himself counting to 100,000 which took him
44 hours and it went viral. He learned how to please YouTube recommendations algorithm and
quickly amassed more views with similar stunts, like saying "Logan Paul" 100,000 Times or
spinning a fidget spinner for 24 hours. By the end of 2017, MrBeast reached 1 million subscribers.
Once he discovered the secret sauce for a viral video, he started regularly making attention-grabbing
challenges involving large sums of money as well as donation and charity stunts.

Figure 3 – Evolution of the “MrBeast” YouTube channel (2)

Note: All the videos in the “Worst Intros Series” were deleted by MrBeast in 2018, presumably to avoid possible strikes
due to newly introduced “Harassment and cyberbylling policy” by YouTube. (5)

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WHY
YouTube is a global platform with over 2 billion active users (6) so it is in the best interest of any
channel to capture as much of that market as possible. Figure 4 shows that India and US have the
largest number of active users, together accounting for 707 million users. Making content
interesting for viewers from just these two countries allows to compete for 35% of the overall
YouTube market.

500
450
400
350
300
250
200
150
100
50
0

Figure 4 – Leading countries based on YouTube audience size (in millions) as of January 2022 (7)

On that account MrBeast did a great job on targeting the largest audiences as the absolute majority
of his viewers are from the US, followed by India as shown in Figure 5. Despite India’s audience
having larger overall presence on YouTube than American, it is 4 times smaller on MrBeast channel
presumably due to videos being filmed in the US and by Americans.

Figure 5 – “MrBeast” YouTube channel audience by country as of July 2020 (8)

All the content on MrBeast channel is in English so his top 5 most viewing countries are English-
speaking. Language barrier is a significant obstruction to the content reaching wider audiences. As
it can be seen in Figure 4 making content in Indonesian would bring additional 127 million potential
viewers, in Portuguese – 107 million viewers from Brazil, in Russian – 99 million viewers, in Spanish
– 110.2 million viewers from Mexico and Spain.
Following success of the main MrBeast channel Jimmy created 12 additional channels within
MrBeast brand shown in Figure 6. Seven of those channels are translated versions of the English
channels aimed for Brazilian, Russian, French and Spanish-speaking audiences. All together
translated channels accumulated 31.6 million subscribers just one year after being created.

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187 M

Figure 6 – Subscriber count (in millions) of channels within MrBeast brand as of 17.02.2022 (2)

Apart of breaking the language barriers to expand the viewership MrBeast has also invested into
diversifying his video topics in the recent years. Gaming content is thriving on YouTube now,
with ”2.9 billion people expected to play video games by the end of [2021]”. (9) In 2020 YouTube
gaming community has received another creator, MrBeast Gaming, with Jimmy playing "Minecraft"
and other computer games like in the good old days of his career. He also created a separate channel
intended exclusively for YouTube shorts using it in a similar manner as Instagram stories and a list
of other channels presented in Table 1.
Table 1 – English-speaking channels within MrBeast brand

Channel Name Year Created Description

MrBeast 2012 Main channel with expensive challenges, stunts and donations.
MrBeast Gaming 2020 Gaming content, let’s plays in "Minecraft", "GTA V", "Among Us"
with Jimmy.
Beast Reacts 2016 Jimmy and his friend Chris reacting to the internet's favourite
videos.
MrBeast Shorts 2020 YouTube shorts (horizontal videos up to 60 seconds) with
Jimmy.
Beast Philanthropy 2020 Donations and charity videos, all profits go to the food banks.
MrBeast 2 2020 Only 2 videos on the channel dated 2020, seems forgotten.

MrBeast’s content may look child-oriented on the first glance, however it attracts viewers of a wide
range of ages. Figure 7 shows that only a quarter of his viewers are teenagers, the same share is
made up by Gen-Z viewers and 23% by Millennials. This proves that even adults are susceptible to
click on MrBeast’s videos after seeing his eye-grabbing thumbnail and title and then watch the video
for at least 30 seconds to make the view count. (10) Gender gap of 2% between the viewers shows
that there is no significant preference of one gender group over the other.

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Figure 7 – “MrBeast” YouTube channel audience gender & age as of July 2020 (8)

Note: Data shown in Figure 5 & Figure 7 is relevant for July 2020 as no free up-to-date demographics data is publicly
available.

HOW
Jimmy is one of the highest-spending YouTubers on the planet. In 2020 he revealed that he spends
$600,000 a month just on his employees and rent (11) and later that year he tweeted that in 6
months he spent over $10 million on content. (12) Add these together and MrBeast could be
spending well over $2 million a month. In some videos MrBeast is literally giving away a million
dollars. In August 2020, for example, he spent at least $3 million (13) so his monthly spendings are
quite volatile as indicated in Figure 8.

$2.2 - 3m spent monthly

0.6 1.6 - 2.4

0 0.5 1 1.5 2 2.5 3 3.5

Rent, employees, consultants Content

Figure 8 – Monthly expenditures of “MrBeast” YouTube channel (in millions $)

The big question is how Donaldson can afford these vast expenditures. Across his channels MrBeast
is averaging about 600 million views a month (1). YouTube AdSense pays creators from $0.25 to $4
per 1,000 views (1) so it could be bringing him about $1.2 million per month. This is confirmed by
several outlets which reported MrBeast’s annual earnings of $15 million from YouTube content
alone. (14)
His other revenue streams shown in Figure 9 include brand sponsorships (15), merchandise sales
(16), and starting from 2020 a virtual restaurant called “MrBeast Burger” (17).

$3.3m earned monthly

1.2 0.9 0.5 0.7

0 0.5 1 1.5 2 2.5 3 3.5

Google AdSense Sponsorships Merchandise MrBeast Burger

Figure 9 - Monthly earnings of MrBeast (in millions $)

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MrBeast has confirmed that he keeps his primary focus on the main channel because “that’s what
drives all this”. (18) All his other ventures are there to make money so Jimmy can put it back into
the main channel which independently is just not profitable.
The gap between MrBeast’s spendings and revenue has been very narrow historically as he spends
“just as much as he makes every month producing content.” (13) MrBeast reinvests everything he
has made from his audience back into his channel which creates a feedback loop illustrated in Figure
10. He makes a video, it makes money and people buy his merch then he makes an even better video
using that money and the process is repeated. (19)

Figure 10 – The MrBeast feedback loop (19)

STRATEGY
MrBeast is a purpose-driven youtuber, his mission is to make things that have never been done
before and to make the world a better place while doing so. This makes him very likable by his
audience which is strongly willing to support him. In contrast with most other YouTubers, watching
ads on Jimmy’s channel or buying his merch makes
people feel that they are helping him change
YouTube and make other people’s lives better.
Figure 11 shows the breakdown of MrBeast
audience. There are a lot of people who casually
watch his videos, eventually becoming active
viewers who leave likes and comments. But his
“clear mission and constant reinvestment” results
to more and more people converting into his
superfans, who help “fund his ideas and back him so
strongly”. (19)

How MrBeast hooks the audience to his content?

YouTube is a competitive market with lots of
creators offering content to compete for viewer’s
time and attention. To stand out from the crowd a
channel should have a unique selling point, what it Figure 11 – Types of viewers on “MrBeast” YouTube
can provide that others cannot. channel (19)

MrBeast built his strategy around creating a monopoly in his sector of YouTube. “The easier your
content is to replicate, the more competition you face”. (19) MrBeast is incredibly hard to imitate as
his every new upload is often something that has never been done before or it elevates previously
known content to a new level due to high budget. His format of high budget entertainment videos
raises high barriers to entry swiping off the competition.

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If you look at MrBeast’s videos for the past 2 years you would need to be a multimillionaire with a
team of dozens of people to recreate these ideas. Figure 12 shows that Jimmy spends between
$100K and $1M in a giveaway video excluding the cost of production. He has three magic numbers,
$100K, $500K and $1M as round numbers “look better in the title” as they feel bigger and instantly
grab attention, according to Jimmy. (20) Comparing the number of accumulated views shows that
$100K and $500K videos bring more views than $1M, so clearly more money does not mean more
views. In addition, the “round number” theory does not prove itself on practice as the most viewed
giveaway video features $456K.

250

200
Views (millions)

150

100

50

0
0 $100K 0.2 0.4 $500K 0.6 0.8 $1M
1 1.2
Money Spent (millions $)

Figure 12 – Video views vs Money given away in a video in the past 2 years (as of 04.03.2022) (2)

The advantage of lower budget videos becomes even more apparent when comparing the views per
dollar spent as shown in Figure 13. There is a clear trend of the diminishing return as $100K videos
can bring up to 20 times more views per dollar than the $1M ones. Considering that not many people
would be interested in watching a $10 giveaway video there must be a bell curve trend with a peak
at around $100K. Red dashed line in Figure 13 represents an approximation of this bell curve for
the videos with budget below $100K. More data would be required to draw a more accurate
relationship.

1200

1000

800
Views per $

600

400

200

0
0 $100K 0.2 0.4 0.6 0.8 1 1.2
Money Spent (millions $)

Figure 13 – Views per $ spent vs Money given away in a video in the past 2 years (as of 04.03.2022) (2)

It is worth noting that two of three $1M videos were uploaded in the past 3 months so comparing
them to the videos which were out for up to 2 years may be misleading. It is likely that $1M videos
have not reached their full potential yet so better comparison could be made in the future.

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CRITIQUE
Finding the optimal giveaway amount
MrBeast started making philanthropy videos in the early 2016, when he gave away two $15 dollar
gift card to his followers. (2) That video brought only 27K views and the results were similar for the
next two videos where he gave away $100.
Jimmy took a gamble in his fourth philanthropy video where he donated $10K to a homeless person.
The gamble did pay off as the video generated 9.9 million views as illustrated in Figure 14. At that
moment Jimmy realised that bigger donations bring bigger views, so he continued giving away $10K
to strangers on the streets and online and the videos kept bringing him millions of views.
The next Jimmy’s move was to increase donations even more, this time to $100K. He gave this
money to his mother and received positive feedback as the video accumulated 28 million views. This
was his record-breaking philanthropy video at a time, however it cost him 10 times more than his
previous videos but brought only 1.5-2 times the amount of views.

110
Money Spent (thousand $) or Views (millions)

100
90
80
70
60
50
40
30
20
10
0
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49
Video Number in chronological order

Views (millions) Money Spent (thousand $)

Figure 14 – Video views vs Money given away in the first 50 philanthropy videos (as of 04.03.2022) (2)

The big questions are:

• What sum of giveaway brings the most views?

• What sum of giveaway is the most cost-effective?

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MrBeasts’s first 50 philantropy videos have been analysed as each of them has been out on YouTube
for at least 3 years. This makes the comparison between the videos relatively fair as the fast growth
phase has already passed for all of them.
Figure 15 shows that as the giveaway amount increases the views also rise but at a decreasing rate.
The first peak is reached at $25K after which there is a sudden drop in the views. The viewership is
regained again at $50K after which it continues to drop. MrBeast has not made any videos with
donations above $100K within the analysed period.

100

80
Views (millions)

60

40

20

0
0 10 20 30 40 50 60 70 80 90 100 110
Money Spent (thousand $)

Views
Views(millions)
average (millions) (millions)
Views per video (millions)

Figure 15 – Video views vs Money given away in the first 50 philanthropy videos (as of 04.03.2022) (2)

The trough in the graph could be explained either by the eye-catchiness of numbers 25 and 50
compared to 30 and 40 or simply by a lack of relationship within that region. On average $50K
videos bring 74M views, which is the highest money can buy within the $100K budget.

12

10
Thousand views per $

0
0 10 20 30 40 50 60 70 80 90 100 110
Money Spent (thousand $)

Thousand
Thousandviews
viewsper
per$$ average Thousand
Thousand views
views per
per $$ in a video

Figure 16 – Video views per $ spent vs Money given away in the first 50 philanthropy videos (as of 04.03.2022) (2)

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However, it turns out $50K videos are not the most cost effective. Figure 16 shows that the most
cost-effective giveaway videos have a budget of only $1K. There is only one video with this budget,
so the evidence is weak. There is more certainty however, that the peak of cost-effectiveness is
around $1-10K as videos with lower or higher budget bring less views on average per every dollar
spent.
The most views per dollar donated MrBeast has ever achieved was 9.8 and this was in a $10K video.
For comparison, $100K videos only bring 0.5 views per dollar.
To summarise:

• $50K, followed by $25K is the sum of giveaway that brings the most views

• $1K to $10K is the most cost-effective sum of giveaway

It is important to note that the sum of a giveaway is not the only factor that influences video
popularity. Figure 14 highlights the biggest spikes in views of new videos and it is clear that the
most successful videos feature a wide variety of donation sums. One common thing between the
best performing videos is that they are all novel, nothing like this has ever been done on MrBeast
channel and in some cases on YouTube. Examples include donating to famous game streamers,
eating very expensive food, challenging people to stay in one place like pool to compete for prize
money.
The type of content can be previously known, like “Last to Leave "X" Wins $Y”, however coming up
with what to substitute for "X" is what helps MrBeast to stand out. Given Jimmy has money and team
to implement even the craziest ideas the hardest part of a successful video is, in essence, to come up
with its title.
In the past years there have been less and less $10K and $50K philanthropy videos and more and
more $100K, $500K and $1M ones on the MrBeast channel. This aligns with Jimmy’s strategy to
reinvest everything he is earning back into the channel which so far has shown incredible results.
However, it is becoming apparent that additional zeros in the title give diminishing marginal returns
in terms of views. In addition, people receiving money would not react drastically differently if they
were given $500K instead of $1M. It is bad news for Jimmy given that people watch MrBeast’s
philanthropy videos mainly to see the reaction of strangers being awarded money.
Therefore, it is best to spend money on increasing the production quality rather than increasing the
giveaway pot size. This strategy has already proven itself in the recent MrBeast video shown in
Figure 17.
At the moment it is the most viewed video on
Jimmy’s channel despite being just 3 months old
and featuring $465K pot size which is a non-
round number and far from being the biggest
Jimmy has spent. What helped this video to
become so viral is the production quality which
cost Jimmy $3.5 million dollars. (21) The video
features 456 contestants plus the production
crew. (2) More videos like these will help
MrBeast to keep growing in the future.
Figure 17 – Statistics of MrBeast’s most popular video (2)

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• Novel video idea with small giveaway pot outperforms known video idea with
large giveaway pot

• Money spent on production quality bring more returns than money given away

Expanding to foreign markets

MrBeast has already made effort translating his content into Spanish, Portuguese, Russian and
French languages to reach foreign audiences. Figure 19 shows that India is a country with by far the
greatest number of active viewers on YouTube. MrBeast has already captured part of its market due
to English-speaking Indians amongst his audience as
illustrated in Figure 5. However, India is a multilingual
nation, with English speakers representing only 10.6%
of total population as it can be seen in Figure 18.
There is already evidence that MrBeast’s content is 32.3
interesting to English-speaking Indians, so it is worth
creating a Hindi-speaking channel to make his videos
57.1
available to 266 million additional viewers from India
as indicated in Figure 19.
10.6
Indonesia, Japan and Germany are the next top nations
by active viewers which currently do not have
translated content of MrBeast. Creating channels in
Indonesian, Japanese and German languages would Hindi English Other
bring additional 286 million potential viewers. Figure 18 – Languages spoken in India (21)

500
450 Potential markets
400 to be captured
350
300
250
200
150
100
50
0

Figure 19 – Expansion into leading countries based on YouTube audience size (in millions) as of January 2022 (7)

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References
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3. Paige Leskin, Melia Russell , Steven Asarch. Meet the 22-year-old YouTube star MrBeast.
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11. Muaaz. [MrBeast comment] Reacting To Why Mr Beast is a GENIUS - How He Grew his YouTube
Channel. https://www.youtube.com/watch?v=6ZtWo4v1apw : YouTube, 2020.
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businessmen/producers/jimmy-donaldson-aka-mrbeast-net-worth/ : s.n., 2022.
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0and%20merchandise%20profits. : Screen Rant, 2021.
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youtubers-sell/ : s.n.
17. Karan. How MrBeast Burger is Earning $720,000 per month.
https://www.businessmodulehub.com/blog/how-mrbeast-burger-is-earning-720000-per-
month/ : Business Model Hub, 2021.

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18. Colin and Samir. How MrBeast Spends More Money Than He Makes.
https://www.youtube.com/watch?v=jaKINKK09FY : YouTube, 2021.
19. Paddy Golloway. How MR BEAST Built His Business Empire ($1 Billion on YouTube?).
https://www.youtube.com/watch?v=CV0jN0P0Zi8 : YouTube, 2020.
20. Colin and Samir. The Full Story of MrBeast.
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21. Pearce, Matt. How much did MrBeast’s ‘Squid Game’ remake on YouTube cost? We did the math.
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video-
hit#:~:text=During%20the%20video%2C%20Donaldson%20says%20that%20its%20production
%20cost%20%243.5%20million.&text=Doing%20napkin%20math%2C%20that%20would,minut
e%2 : Los Angeles Times, 2021.
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