How This 22 Year Old Built A $77M Business On YouTube

$3.36m/month from ads, $2.4m/month from merch and $690,000/month from sponsorships. Quick math. The sum of those figures multiplied by twelve months in a year gives you about $77m/year. Okay. I am not baiting. Let's get into it.

If you have been on youtube for any amount of time, there is a really high chance that you have heard of Mr. Beast. Yes. He is the YouTuber I’m talking about today.

Jimmy makes money that comes from mainly the audience he has on his two youtube channels — Mr. Beast and Mr. Beast Gaming.

Some of the information here is taken as an industry average since Mr. Beast’s company is a private one and so his financial reports are not available to the public.

His youtube income comes from 3 sources that we shall talk about. His business model, however, was to create viral content that involved giving money away.

This gave him attention from people of all intentions that either wanted a part of the action or those that wanted to expose him.

The attention all groups brought to him helped him in building an audience that he could later monetize.

Let us talk about the revenue streams in detail.

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The revenue streams

The amount of money I talk about here is just revenue. Meaning that this is not the money he gets to keep. I have not accounted for expenses he incurs like employment, rent, and so on plus the taxes.

It is important to note that this is the money he makes. It is not the money he keeps. But even if after all taxes and expenses he gets to keep 30%, that is still $24m+ if I am being conservative, but I digress.

Anyway, Mr. Beast makes money from 3 main sources. Of course, am sure that there are other ways he makes money like other investments but here, we are only going to talk about the income coming from his youtube channels.

Mr. Beast makes money the same way all other YouTubers do.

1. Ad Revenue
2. Merch
3. Sponsorships

Let us cover each one in detail.

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Ad Revenue

According to the social blade, Jimmy’s main channel gets about 10,000,000 views per day and his gaming channel gets about 6,000,000views/day.

Since he does not have a channel with a high CPM according to industry standards, we shall consider two factors to determine his CPM. The industry average, and the value of his channel.

The industry average for gaming channels is about $3/1000 views and this applies to both of his channels since they are both listed as gaming channels according to the social blade.

Another metric we shall use is the value of his channel. His channel has a very low cost for advertisers to place their ads on, and at the same time, it gets an incredibly high level of volume of views.

The combination of those two factors makes it possible for advertisers to bid higher than $3 to place their ads on his videos bringing his CPM to about $7.

With a CPM of $7 and 16,000,000/day across both his channels, we can divide those views by 1000 and multiply the answer by 7. This will give us about $112,000/day.

This means that he makes about $112,000/day from ads or $3.36m/month from ads alone.

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Merch

The next revenue stream here is Merch sales. Most“big” YouTubers have some form of merch they sell on their websites outside of Youtube whether it be clothes, mugs, prints, cuts, and so on. Mr. Beast is no different.

He, too, sells apparel on his site called shop Mr beast.

According to data from SimilarWeb, this site gets about 1000000 visitors every single month, with 99% of that traffic being organic visits, 96% of which come from Jimmy’s youtube channels.

Before we crunch the numbers, I will also add that Mr. Beast drops a limited run of Merch about once a month that helps him get the money to fund his content ideas. We shall factor in these numbers to find his average monthly earnings.

Let's start at…

The industry-standard conversion rate on e-commerce according to Bigcommerce data is about 1%-2% on average.

Am sure Mr. Beast does way above average but let us keep it simple and conservative and place him at about 3%. Yeah, I know. Too little for someone whose word of mouth has raised $22m for team trees in a year. Bear with me. I am not going to overestimate anything here. 3%. Let’s keep going.

With one million monthly visits and a 3% conversion rate on his store with an average order value of $35, Mr.Beast makes $1.05m/month from those organic visits.

When he makes a drop, however, those numbers jump up a bit.

On his last drop, he sold 68,337 units at an average of $35. If we subtract his 3% organic conversions. We would be left with 38,337 conversions due to the drop.

This means that there is an extra $1,341,795 to be added to the original $1,050,000 giving us a total of $2,391,795 or in other words $2.4m/month from Merch.

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Brand deals

Another and the last way Mr. Beast makes money is from Brand deals.

Contrary to what most sources say, I do not believe that majority of Mr. Beasts' income comes from Brand deals. It is significant though.

According to Noah Kagan founder of Appsumo, Mr. Beast gets 1.32 sponsorships on his main channel for $390,000 each and 2.64 sponsorships for his second channel at $150,000 for each sponsorship.

According to those numbers, we can say he makes about $918,720/month on average.

I also did my own manual research on his channel and found that he on average gets one sponsorship for his main channel a month and 2 sponsorships for his second channel. Using Noah Kagan’s figures for each sponsorship, I think he makes about $690,000/month from them.

You can see in both cases that none of them are higher than both Ad revenue and Merch sales.

I am going to go with my own research since I could not verify the sources of Noah Kagan on how many videos of Jimmy get sponsored per month but his dollar amount I agree with.

This means that Jimmy(Mr. Beast) makes about $690,000/month from sponsorships. Impressive.

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Results

When we add up all the money he makes from those three income streams, we come up with a value of $6,441,795/month. Which we can then multiply by 12 months to give us $77,301,540/ years.

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How did he get there?

There are many ways he got there but I am going to repeat the principle back of all those ways. Virality.

Virality can be created as long as there are enough people interested or curious about what you are doing to capture their attention.

Mr. Beast was good at using both of those factors to his advantage in the following ways.

1. Appealing to people’s emotions

There are very few things that command people’s attention as money does. Remember, you can only communicate or better still build a relationship with people only if you get their attention first. Money is one of those things that command that attention.

People who came to watch Jimmy’s videos out of curiosity ended up becoming fans that he could count on. This is because his videos always delivered on what they promised.

I cannot tell you how many times I have clicked on a video and been baited. Some people try to give away $20 for a kiss or some weird stuff like that. But Jimmy gave away money without expecting anything in return from the other person just so he could record it and share it with the world.

And he did not just give away $20 he gave away more than that. I have seen people crying after he donated so much money on their twitch streams. This is something most people find dear and they tend to like the person who does it.

This has earned him respect among not just famous people but brands like Nike as well. Appealing to people’s emotions can go a long way in helping you build virality.

2. Capitalizing on trends

Do you know who one of the biggest winners of the battle between PewdiePie and T-series last year was? It was Mr. Beast.

During this time, he made a lot of content urging people to subscribe to Pewdiepie and even got noticed by Pewdiepie himself. This ended up driving views and lots of subscribers to his channel as well.

Another trend that Mr. Beast capitalised on was an environment one and the trend around climate change. He ended up mobilizing people to donate over $22million as of today toward that cause.

This also got his name out to other people who may not have known him anyway.

Mr. Beast does not do this very often but when he does, it almost feels like the whole internet is on board and you can be sure that his stats benefit from this.

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Final Takeaways

If you have followed Mr. Beast since 2017, chances are you may have heard him give some incredible insights and these are the ones am going to share here.

1. Commit To Making Videos

Mr. Beast Made a video in 2015 and scheduled it to go public in 5 years. That video went public this year(2020) and it shows the commitment he made to himself to have a million subscribers by the time this video went public. Of course, he did that and more.

It is completely possible to build your life the way you want it to be like but you have to first commit to getting it done.

Holding yourself accountable or getting someone to hold you accountable in reaching your goals is an important task in this journey. Commit to doing the work first.

2. Get a team

You can do a lot on your own but there are so many advantages to having people to help you out. Mr. Beast has about 30 of those. Having a team not only forces you to show up making sure that you meet your goals but it also lifts a lot of work off your shoulder and helps you focus on what is really important.

In his 20s, Bill gates struggled with meeting payment deadlines of his employees, many of whom were as old as his dad, and this caused him to show up to work and think smart to make sure that his company made money from which he could pay his employees. Having them around, he would also be able to work on projects that could not have been possible on his own.

Get a team as soon as you can afford to.

3. Reinvest your money

In the beginning, Mr. Beast reinvested most of his money into content and this helped him generate virality. Giving $10,000 to a homeless man was the beginning of his business strategy.

Knowingly or unknowingly, that video served as the foundation of his business model.

It is clear now that he gives away so much money which generates a lot of attention and the dollars that come with it.

Imagine giving away $10m and you make back $24m. This is more than 100% ROI.

In your business, you should also invest your profits into it. If you are a writer, you can invest in software that makes your writing better instead of using free versions.

Little investments done into your business will compound over time to give you the best ROI your business can get you.

4. Remember to have fun

Wherever you think that you want to get to, you will definitely get there if you keep going so there is no need to worry about obstacles in the journey. Try to have fun and fulfillment along the way so that when you reach your destination, it is something you not only learned a lot from but also something that you really enjoyed doing.

Having fun will also keep you away from stress and things that may cause you sicknesses.

I hope we can all learn from Mr. Beast a thing or two that will help us get to where we want to go.