Axios Media Trends

October 25, 2022
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1 big thing: Scoop... MrBeast raising big money
Photo: Denise Truscello/Getty Images for Amazon's Crown Channel
MrBeast, the YouTube star turned entrepreneur, is looking to raise around $150 million for his business at a roughly $1.5 billion valuation, three sources familiar with the conversations told Axios.
Why it matters: The funding would help MrBeast — whose real name is Jimmy Donaldson — quickly expand his massive video empire further across restaurants, consumer goods and merchandise.
Details: In recent weeks, MrBeast has been speaking with venture investors about what would be his first institutional investment into his overall portfolio, which includes several businesses, in addition to his YouTube empire.
- 🖥️ In addition to his own YouTube channel, MrBeast runs Beast Reacts (19.8 million followers), MrBeast Gaming (29.1 million followers), and MrBeast Shorts (16.2 million followers).
- 🍔 In 2020, MrBeast launched a food delivery business called MrBeast Burger, which delivers in more than 1,000 locations across the U.S., Canada, and the U.K. He's now beginning to open actual restaurants.
- 🍫 In January, he debuted his own snacks business called Feastables, which made over $10 million in its first few months of operations.
Between the lines: It's unclear how the new investment would be structured. Night Media, the talent management company that manages MrBeast, has helped launch consumer ventures under MrBeast's brand. Some of his individual businesses have taken on separate investments.
- Feastables, for example, raised $5 million in January at a $50 million valuation, from 776, Shrug Capital and Sugar Capital, per Insider.
Be smart: While MrBeast Burger is a much larger business than Feastables, Feastables is much more profitable, one source said.
- Feastables will bring in "tens of millions" in revenue this year, according to one source. MrBeast Burger tweeted in July that MrBeast Burger "has shared over $100 million in revenue with restaurants across America."
- MrBeast also makes significant advertising revenue from his YouTube channels, which he says he uses to reinvest in his content.
- Many of MrBeast's most viral videos center around elaborate philanthropic stunts and giveaways.
⭐ The big picture: YouTube stars have become ripe entities for content investors, thanks to their ability to develop cult-like followings and loyal fans.
- Night Media raised $100 million from The Chernin Group earlier this year for a new growth equity company called Night Capital that aims to link content creators to consumer businesses.
2. Media braces for cold winter

U.S. media companies are headed for a brutal shakeout.
- 📉 Economic danger signs are forcing networks and publishers to slash costs and prepare for trouble in ways that are reminiscent of the early pandemic days.
What's happening: Outlets are responding to the new economic reality with layoffs, hiring freezes and other cost-cutting measures.
- New data from Challenger, Gray & Christmas finds that news media layoffs are beginning to tick up again after a relatively stable summer.
- Nearly 3,000 media jobs have been cut this year, with more than one-third (1,100) coming from the news media industry.
- Recount, Gannett, BDG, Recurrent, CNN, Netflix, Acast, Future, Warner Bros. Discovery, G4, and more have all announced layoffs in the past two months.
Between the lines: Inflation and supply chain issues have slowed the ad market dramatically ahead of what's typically the most lucrative time of the year.
- Analysts expect the slowdown to continue well into 2023. One firm has cut its ad spend percentage growth projections for next year in half.
- The financial stress on Big Tech firms has killed most programs that pay publishers for their content.
Zoom in: News companies are also seeing a significant traffic slowdown in response to a post-Trump news cycle that's riddled with depressing headlines.
- The Washington Post is on track to lose money this year, and it's lost digital subscriptions in the Biden era.
- The Atlantic is staring at another year of roughly $10 million in losses.
- Other billionaire-backed publications, including the LA Times, are still struggling to find their footing in the digital era.
Reality check: Some points of optimism in the industry remain.
- The New York Times continues to grow its paid subscriber base at a healthy clip.
- Semafor was able to raise $25 million ahead of this month's launch.
- News Corp. revenues rose to a record $10.4 billion for the fiscal year ending in June.
What's next: For media startups, the murky economic outlook has created a rough fundraising atmosphere and has killed incentives to go public.
3. Major loss for press freedom in Hong Kong
Police lead Jimmy Lai away from his home after he was arrested under the new national security law in Hong Kong on Aug. 10, 2020. Photo: Vernon Yuen/AFP via Getty Images
Media mogul Jimmy Lai was found guilty by a Hong Kong court of two fraud charges today.
- He's one of the most prominent pro-democracy voices to be prosecuted in the region following sweeping protests in 2019.
Why it matters: The guilty verdict marks a huge loss for press freedom in Hong Kong, where the government has pushed to stamp out pro-democracy voices after passing a draconian national security law in 2020.
- "To call it a kangaroo court is unfair to kangaroos!" Mark Clifford, president of the Committee for Freedom in Hong Kong and former editor-in-chief of the South China Morning Post, told me in an email.
Details: Lai was arrested in 2020 and is currently serving a 20-month prison sentence for charges related to his role in unauthorized demonstrations during the 2019 protests.
- He is currently awaiting trial on separate national security law charges. The trial, which is expected to take place in December, could have Lai sentenced to a lifetime of imprisonment if found guilty.
Catch up quick: Lai founded Next Digital, a media company that housed one of the most widely read pro-democracy newspapers in Hong Kong, Apple Daily.
- The paper was forced to shut down last year after its assets were frozen under China's national security law.
The big picture: Press freedom advocates say Lai's conviction is a clear example of ways Hong Kong authorities are using the law to go after independent journalism.
- "Hong Kong authorities need to stop misusing the court to target people for exercising their rights to freedom," said Carlos Martínez de la Serna, program director at the Committee to Protect Journalists.
- Lai, he said, is a symbol of the struggle to maintain peace and freedom in Hong Kong.
What's next: Lai plans to appeal the charges, a Next Digital executive told CPJ.
Go deeper: Free press crackdowns intensify in Hong Kong
4. Big media's cash cow rapidly unraveling

The U.S. pay-TV (cable and satellite) market is now shrinking by more than 6% per year, setting a new record for the all-time worst level of decline ever.
- Without skinny bundles (digital live TV packages), the pay-TV market is shrinking by nearly 10%, according to an analysis from MoffettNathanson.
Why it matters: The cash cow that has fueled the streaming ambitions of the world's biggest media companies is unraveling as Wall Street's love affair with unprofitable streaming bets wears off.
- The number of new subscribers to "skinny bundle" packages has leveled off, meaning digital alternatives to cable can't be counted on to help offset the losses.
- Sports is the only thing keeping the traditional TV bundle alive, and more of those rights are headed to streaming.
- Case in point: Despite a 40% increase in sports viewing in September, new data from Nielsen finds that cable usage remained "basically flat" compared to August.
By the numbers: New research from Leichtman Research Group finds that just 66% of U.S. TV households have pay-TV subscriptions, down from 88% in 2012.
What to watch: Free, ad-supported services continue to gain market share as consumers tighten their wallets.
- YouTube (including YouTube TV) topped all streaming platforms last month for the first time, according to Nielsen's monthly TV consumption ratings.
- Pluto, Paramount's ad-supported streaming service, became the first free streamer outside of YouTube to gain more than 1% of consumption market share.
5. 🐦 Inside Twitter: "People are exhausted"
Illustration: Aïda Amer/Axios
Twitter is the only social-media stock that hasn't cratered this year. But all signs point to ugly finances ahead.
Why it matters: Twitter's dramatic deal with Elon Musk has overshadowed its business weakness. But when you pull back the curtain, Musk couldn't have picked a worse time to overpay.
- Timeline: Barring any further twists and turns, the deal is expected to close this Friday.
Employees told Axios that inside Twitter, despite best efforts to operate business as usual, the takeover saga has made it hard to discuss long-term deals with clients and vendors.
- "People are just exhausted," a Twitter employee told Axios. "It can be conflicting because as a shareholder you’re happy, but as an employee, there's a lot of uncertainty."
- The drama is sapping morale, especially after a Washington Post report suggested Musk plans to cut up to 75% of Twitter's workforce.
Go deeper with our latest podcast: "How it Happened: Elon Musk vs. Twitter"
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Sara Fischer’s inside look at the forces reshaping media.


