Amazon poaches MrBeast to generate a hit for Prime Video

The news: Amazon has signed a deal with James Donaldson, the YouTube star known as MrBeast, to produce a reality competition series for Prime Video, the company announced Tuesday.

• The show will be titled “Beast Games” and feature over 1,000 contestants competing for a $5 million prize.
• MrBeast’s name is synonymous with YouTube. He has the second-most subscribed-to channel on YouTube and has leveraged his audience to launch several CPG businesses. He frequently produces reality competition-styled videos (like one styled after “Squid Game”) with cash prizes.

Poaching talent: It’s unlikely that Donaldson will stop producing content on YouTube as a result of the deal, but it shows that his loyalties don’t lie with a specific platform—even if it afforded him internet superstardom and a vast fortune.

• It’s YouTube’s openness as a platform that gave Amazon the opportunity to swoop in and strike a deal with the creator, who’s become something of a mascot for the platform, where he routinely rakes in tens of millions (if not hundreds of millions) of views.
• By creating a reality competition series in the vein of Donaldson’s existing content, Prime Video can cheaply produce a show that attracts Donaldson’s enormous viewership at a relatively low cost, essentially guaranteeing a hit.

Prime Video needs a hit: Amazon made an aggressive push into the video advertising market early this year when it made ad-supported viewing the default tier for Prime Video. That change gave Prime Video the largest audience for an ad-supported subscription video service in the US, but it will take more than flipping the switch to ensure success.

• Prime Video, with its treasure trove of user data from Amazon, competitive CPMs, and steep user penetration, is an enticing prospect for advertisers. But there are still headwinds.
• For one, original content spending on Prime Video is high; for every $1 Netflix spent on content last year, Amazon spent $3. Amazon’s handling of its ad-supported launch has also received blowback from consumers, and subscription growth is stagnating for most leading services.
• The MrBeast deal targets all three of those pain points. Reality content is far cheaper to produce than scripted content, and Donaldson’s presence is likely to draw a large audience of new, young users to the platform—users who are already accustomed to seeing mid-roll ads on MrBeast videos.