YouTubers Hold the Key Ingredient

Today’s Edition

• How the top YouTubers are building businesses in the food and beverage space

• TikTok tests an AI-powered Script Generator

• Twitch faces backlash for controversial branded content guidelines

How the Top YouTubers are Building Businesses in the Food and Beverage Space

The food and beverage industry has surprisingly been a successful venture for some of the biggest YouTubers. Despite the historical challenges of this industry, creators have found success with businesses ranging from chocolate bars and sports drinks to quick-service restaurants. These include MrBeast's MrBeast Burger and Feastables, Logan Paul and KSI's PRIME Hydration, Emma Chamberlain's Chamberlain Coffee, David Dobrik's Doughbrik’s Pizza, and the Sidemen's Sides.

What They Have Accomplished

These creators have achieved notable milestones in their businesses. Feastables generated $10 million in sales within its first few months, while PRIME reportedly did $250 million in retail sales during its first year. Chamberlain Coffee expanded its distribution to include major retailers such as Walmart and Sprouts Farmers Market. Looking ahead, the Sidemen have ambitious plans to launch over 200 locations for their fried chicken restaurant over the next ten years.

Why Food and Beverage Works for Creators

Although breaking into and achieving long-term success in the food and beverage industry can be challenging, launching a business in this space can offer several advantages over other industries, such as beauty or tech, for creators:

• Everyday Demand: Food and beverages are part of everyday life, creating a consistent demand from people.

• Accessibility: They are often priced lower, making them more accessible than other types of products that creators could sell.

• Shareability: Food and beverages are prime for social media, allowing creators to benefit from their fans sharing photos or videos of their products in stores, consuming them, and more. This leads to an always-on type of awareness and word of mouth.

Combining Dynamic Creator Skills with Tried-and-True Strategies and Tactics

Creators and their massive YouTube audiences are at the core of the success of these businesses. However, they are not relying solely on that. Instead, they are combining their dynamic content creation, marketing, and community-building abilities with tried-and-true operational and marketing strategies and tactics. This allows them to deliver the best of both worlds.

Examples of these include hiring industry veterans to run their businesses (such as MrBeast, who hired former RXBAR's President, Jim Murray, as CEO of Feastables), securing distribution in prominent retailers (like Chamberlain Coffee in Walmart and Sprouts Farmers Market), becoming official sponsors of other companies, and investing in commercials, out-of-home advertising, and partnerships. All of this is true for PRIME, who ran a Super Bowl commercial this year, has partnerships with the UFC and the Los Angeles Dodgers, and much more.

The Gap Between Creator Brands and Legacy Brands

Currently, there is a significant gap between creator brands and category leaders. For example, PRIME generated an estimated $51.7 million in sales over a four-week period last April, compared to Gatorade's $263.5 million in the same period, according to market research data by Circana.

While creator brands still have a long way to go to surpass some legacy brands, the gap will narrow over time. In some cases, legacy brands may even acquire these creator brands for hundreds of millions or even billions as a way to expand their own businesses or reduce competition. This could make way for the first true digital billionaire creator.

Until then, don't be surprised to see some of these brands out and about. In the last two weeks alone, I came across Feastables at a 7-Eleven in New Hampshire during a road trip, and PRIME while grocery shopping at Target last week.

TikTok Tests New AI-Powered Video Script Generator Tool

TikTok launched a new AI-powered Script Generator tool in beta. The tool creates scripts for TikTok videos that promote products or services based on user-entered information and criteria. Through a quick and easy workflow, users can identify an industry, provide product or service information, choose a video format, add keywords, and decide on video duration. Once completed, the tool produces three unique scripts in a matter of seconds. These scripts feature voice overlays, on-screen visuals, and text overlays.

Although not perfect, the Script Generator offers a solid foundation for creators and marketers to generate TikTok-specific scripts with just a few clicks. These outputs can be tweaked and refined to reflect their unique voice and add a human component, which is still an important part of creating engaging content. This saves time, allows for exploring multiple script variations, and overall accelerates video creation for both organic and paid media purposes.

Twitch Faces Backlash for Controversial Branded Content Guidelines

Earlier this week, Twitch updated its Branded Content Guidelines for streamers, which limit on-screen logos to 3% of the screen size and prohibit “burned-in” display and audio ads. Due to the significant restrictions, there was an uproar within the Twitch community. Many streamers saw the move as Twitch trying to insert itself into the relationship between creators and brands and take a cut. It even caught the attention of MrBeast. Twitch eventually released a statement and reversed the guidelines.

This is the latest misstep by Twitch, which is causing a greater divide between the platform and its creators. As other platforms like YouTube and TikTok delve further into live streaming and upstarts like Kick gain traction, streamers are beginning to explore alternatives. In the future, Twitch should consult with creators more before making significant updates that could negatively impact them. This will help limit the number of issues that the platform continues to experience.

Instagram is Developing a Chatbot with 30 Different AI Personalities

Instagram is developing an AI-powered chatbot, as revealed by screenshots shared by reverse engineer Alessandro Paluzzi. Users will be able to choose from 30 different AI personalities, ask it questions, receive advice, and get help with their creativity, such as crafting messages. The chatbot aims to create a more fun and engaging experience across the platform.

Once released, Instagram will join the ranks of Snapchat, Discord, TikTok, and LinkedIn in providing chatbot functionalities. This trend indicates that chatbot features are becoming a standard offering across major social media platforms. Who will be the first platform to help creators create a native AI chatbot version of themselves?

TikTok to Allow More Creators to Monetize Through Paywalled, Premium Content

TikTok is expanding its Series feature, which allows creators to monetize their premium content by placing it behind a paywall. Creators must meet certain criteria, such as having at least 10,000 followers and having posted more than three public videos in the last 30 days. If a creator does not have 10,000 followers but meets other requirements, they can apply by providing a link to their premium content on other platforms via the Creator Center in the TikTok app.

This is one of the first instances where a social media platform considers granting access to specific features or programs based on a creator's presence on other platforms, including direct competitors like Instagram and YouTube. Hopefully, more platforms will adopt this approach to democratize more of their monetization tools and help creators earn more money.

Creator Start-Ups Announce AI-Powered Contract Summarizer Tools

Two creator startups recently announced new AI-powered features to help creators with brand partnership contracts. First, July announced AI Contract Analyzer, which allows creators to upload a contract and get an instant summary of compensation, deliverables, and deal terms. They can also ask specific questions about the contract and receive responses. Second, Klaia announced Contract Scanner, which also allows creators to upload a contract and get a summary of it. In addition, it will generate a customized email response that creators can send to brands for negotiation.

With brand contracts often being complex, easy-to-read summaries featuring key components in plain English make it easier for creators to understand what they are agreeing to and the scope of work. This is especially true for creators who don't have managers or legal counsel to consult during the contract and negotiation process of a campaign.

WWE and Twitch Announce Multi-Year Partnership Following Lifting of Ban on Wrestlers Streaming

WWE and Twitch have announced a multi-year partnership following WWE's lifting of its three-year ban on WWE Superstars streaming on Twitch. The partnership will include an official WWE channel, channels for top talent, and a companion sidecast for Monday Night RAW. The sidecast will feature a rotating cast of hosts, appearances by WWE superstars, and unique, exclusive content, including backstage interviews. Additionally, the WWE channel will serve as an alternate live-streaming feed for all premium live event press conferences.

This partnership will allow WWE to increase its digital reach, adding to its previous partnership with TikTok. The alternate streams for events follow the examples of ESPN (ManningCast) and NFL (Amazon’s Thursday Night Football with DudePerfect), which provide alternative live streams of their events led by athletes or creators as a way to reach audiences where they are, especially younger ones. For Twitch, this potentially means an increase in viewership as more WWE fans come to the platform to engage with their favorite wrestlers.

What I’m Reading

• How GoPro uses its Million Dollar Challenge to source user-generated content year-round (Modern Retail)

• Beauty brands and influencers join Lemon8 with ‘TBD’ mindset (Glossy)

• Mavrck Releases AI Enhanced Search To Streamline Creator Discovery (Mavrck)

• How a Texas High Jumper Used His TikTok Savvy to Score Nearly $1 Million in Deals (TIME)

• Inside American Eagle’s tie-up with ‘The Summer I Turned Pretty’ (Marketing Dive)

Thank You

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