In 2009, five students at Texas A&M University began posting videos to YouTube where they would sink seemingly impossible basketball shots with ease. Their channel Dude Perfect developed a massive fanbase in the years that followed, boasting more than 60 million subscribers and over 17 billion views. This huge audience attracts both marketers and investors alike: along with earning millions annually through ads on YouTube, Dude Perfect recently signed a deal with the financial firm Highmount Capital. Reports indicate that the creators received an investment worth as much as $300 million.
This huge windfall allows Dude Perfect to continue operating on their own terms but with a much bigger budget. “We’re really excited to try to unlock some of the vision and stuff that we were afraid would only be dreams up to this point,” said Dude Perfect cofounder Coby Cotton. “We’re really just looking to scale a lot of the things that up until now, we’ve just never even had anywhere close to the capability to do.” In previous eras of entertainment, independent talents like Dude Perfect’s founders would eventually sign contracts with Hollywood studios to create television shows or act in movies. These days, though, creators can leverage their enormous social media followings to negotiate directly with investors, not entertainment industry firms and middlemen.
For example, the 12-year-old YouTuber Ryan Kanji will release a feature film this summer based on his channel Ryan’s World without help from a major Hollywood studio. Taylor Swift adopted a similar strategy with her concert movie last year, allowing her to reap an enormous profit by dealing directly with film distributors and theaters. Other creators are opting for a more traditional route to mainstream stardom. MrBeast, who has the most followers of any channel on YouTube, recently signed a deal with Amazon Prime to create a reality competition show. Popular channels like these will likely continue to garner interest from outside investors who are looking to capitalize on a creator’s built-in following. “YouTube is the place where new franchises are made,” said consultant Will Harrison. “They’ve done the hard part already by building the audience and the brand.”
Questions:
- What makes big YouTube channels like Dude Perfect and MrBeast appealing both to investment firms and companies like Amazon?
- Do you think YouTubers are better off staying independent like Dude Perfect or by signing contracts with established entertainment companies?
Sources: Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni, “Dude Perfect’s Multimillion-Dollar Trick Shot,” The New York Times, April 10, 2024; Lucas Shaw, “Popular YouTube Channel Ryan’s World Pulls a Taylor Swift With New Movie,” Bloomberg, March 24, 2024; Zach Vallese, “Popular YouTube Channel Dude Perfect Scores More Than $100 Million Investment,” CNBC, April 9, 2024.