In Q1 2023, PARQOR will be focusing on four trends. This essay focuses on the trend, "Hollywood’s future lies in the creator economy, but who is the talent?”
In August 2018, YouTube and Vine influencers Logan Paul and JJ Olatunji aka KSI faced off in a boxing match in Manchester Stadium (in Manchester, UK). 860,000 viewers paid $10 each to livestream the much-hyped boxing match on YouTube, and another 1.2MM pirated the stream for free via Twitch.
Last year, the two co-founded a sports beverage company called Prime Hydration “to showcase what happens when rivals come together as brothers and business partners to fill the void where great taste meets function.” In the past year that company has secured a sponsorship of English Premier League team Arsenal FC (which is currently first in the standings), and has become the first creator-led brand to air a Super Bowl ad (worth $7MM, according to YouTube creators and podcasters Colin and Samir),.
On Tuesday January 31st they announced the signing of a multiyear sponsorship deal with the Ultimate Fighting Championship after the previous five-year sponsorship, Coca-Cola’s BodyArmor, ended. Prime will appear in the Endeavor Group Holdings Inc.-owned mixed-martial-arts company’s broadcasts, including pay-per-views and Fight Night events on ESPN+, and inside the fighting arena (including branding on Octagon corners and stools).
Bloomberg’s Kim Bhasin reports “Prime had more than $250 million in retail sales in 2022, with management aiming to break $1 billion this year behind an aggressive marketing push.” Paul also has said they have sold more than 100MM bottles sold in 30,000 retail stores in their first. year.
This story both is and is not an example of the trend “Hollywood’s future lies in the creator economy, but who is the talent?” It is in the sense that UFC is owned by Endeavor, a Hollywood talent agency, and in that both KSI and Logan Paul — who is now a WWE wrestler — have successfully built their brands with similar playbooks to celebrity athletes. But, it is not in the sense that this is a basic story of a sport sponsorship deal that also reflects the business savvy of their two business partners from Louisville, KY: Max Clemons and Troy Steiger.
Ultimately, though, it is a story that highlights how YouTube is a different medium for talent in ways that force a rethink of the Hollywood "flywheel."
Key Takeaway
The UFC's deal with Prime Hydration and KSI and Logan Paul proves that there is something magical about YouTube.
Total words: 1,800
Total time reading: 7 minutes
How we got to here
KSI and Logan Paul are examples of media entrepreneurs who would make Walt Disney “proud”, as former WarnerMedia CEO Jason Kilar recently tweeted to me. They have leveraged their enormous popularity — Paul has 23MM subscribers on YouTube and KSI has 41MM — to turn Prime into a business that is the “hottest sports drink on the market”, as White said in the press release.
At the heart of the UFC-Prime partnership is a marketing “flywheel” — the press release highlights that “Collectively, UFC, Paul, and KSI reach nearly 400 million social media followers worldwide, which provides them with unparalleled engagement opportunities with their loyal fans.” Paul and KSI already promote the drink across their respective channels — Paul, in particular, constantly promotes the drink on his podcast IMPAULSIVE, which has 4.39MM subscribers. He also carried a bottle of Prime out in his WWE matches — he entered WWE’s Royal Rumble last week doing so, and that event saw 52% more viewership than in 2022.
The backstory of how they went from YouTube creators to professional athletes, and more, helps us to understand how they got to this big moment.
About KSI
KSI is a 29-year-old from London born to Nigerian immigrants. He is more interesting because he has a more diverse “flywheel” than Paul. He is part of a collective known as The Sidemen, who are seven YouTube creators that collaborate across each other’s channels with original content and gaming commentaries. They have multiple businesses including a clothing line, a restaurant chain and a vodka known as XIX Vodka. They also host annual football matches to raise money for charity.
As of October 2022, they had 138MM followers across all their channels, of which KSI has around 40MM. Google searches pop up a range of net worth across all seven members of $54MM (£44MM).
During the pandemic KSI launched a music career, with Top 10 singles that included collaborations with hip hop artists Craig David and Lil’ Wayne. Last May it was announced he had signed with Atlantic Records and Warner Music UK. He has a gold album and a recent number one on the UK’s The Official Big Top 40.
He still is pursuing his boxing career: He fought Brazilian YouTuber FaZe Temperrr last month and won in a first round knockout. He has challenged Logan’s brother Jake Paul to a fight, which is expected to happen later this year in London’s Wembley Stadium.
About Logan Paul
Logan Paul is a 27-year-old American who has been creating content for YouTube since he was 10 years old. He has a more controversial track record than KSI (and rather than summarize it for you, here is a link to his Wikipedia page). But in a nutshell, he successfully made the transition from being a star on the Vine platform to being a star on YouTube, with some very public and expensive missteps along the way. Paul has multiple collaborators including his brother Jake, and his IMPAULSIVE co-hosts George Janko and Mike Majlak (with 4.4MM subscribers), all of whom have their own channels and their own followings.
His brother Jake Paul is a successful creator in his own right, including having a career at Disney as a child actor, and has built a professional boxing career.
KSI v. Logan Paul I & II
In February 2018, KSI challenged Paul to a boxing match. That was the first step in this journey. Julia Alexander documented for The Verge how a “flywheel” of "overly dramatic events" worked leading up to the fight announcement over a 43-day period:
"KSI created a poll for people to vote on suggesting other YouTube creators he could fight
Rumors leaked that KSI and Logan Paul’s teams were talking about a potential fight
Deji, KSI’s younger brother, called out Jake Paul.
Deji traveled to Los Angeles, and posted a series of vlogs calling Jake Paul out.
Jake Paul met Deji at a local park, armed with boxing gloves and vague, half-hearted insults.
KSI confronted Logan Paul at a training gym where nothing much happened aside from a few insults tossed back and forth.
It is all word of mouth across creator channels. On March 18th, 2018 they announced the fight, and the impact of the marketing stunts were measurable: the turnout in-person and on streaming for the August 2018 boxing match in Manchester Stadium, above. The bout attracted ticket buyers from the US, Dubai and Europe. It ended in a draw. The pirated streams may have cost both fighters and YouTube as much as $8MM to $10MM.
A second bout took place in November 2019 at the Staples Center in Los Angeles. It was a six-round professional cruiserweight match broadcast on sports streamer DAZN (NOTE: the first fight was a “white-collar boxing match” and not a professional match.). The fight was broadcast live on Sky Sports Box Office in the United Kingdom and Ireland for a fee of £9.95.[26] The fight was streamed live on FITE TV in the countries where the rights are not sold. On British radio, the fight aired on BBC Radio 5 Live.
Sports promoter Eddie Hearn has said the fight sold over 2MM Pay-Per-View (PPV) buys worldwide, including DAZN, which would make it the fifth-highest PPV fight in history. DAZN later reported the fight as 5th on the top 10 most-streamed events of 2019, and in the top three fights. [1] However, there were 12,000 attendees at the Staples Center, over 40% fewer in-person attendees than in Manchester.
Key takeaways
There are obvious limitations with summarizing the history between these two creators leading up to this deal: We do not have the data or a sense of what worked over time or why it worked. We do not have a window into the demand side of the equation as KSI and Logan Paul and their management teams do.
The only clear signal is that these two are marketing geniuses, as are the creators they work with. Leveraging Paul's and KSI's YouTube, TikTok and other social media channels for marketing awareness of limited supply to millions of target customers (who seem to be primarily Gen Z and Gen Alpha) has helped Prime Hydration to capture lightning in a bottle. 100MM bottles sold in only one year from YouTube creators is unprecedented. [3]
Overall, I think there are three particularly notable takeaways. First, this Prime-UFC deal would not have been possible but for YouTube. Yes, TikTok, Twitter, Instagram and other platforms are factors, but YouTube has been the backbone of everything the creators have done across sports and entertainment, to date. It is a reasonable question to ask whether, without YouTube’s livestreaming offering in 2018, both creators would be here today. Perhaps above all else, its data and user interface has helped them to identify new opportunities to engage with and market to their audiences.
Second, KSI and Paul are unusually talented and multi-faceted in ways that transcend what I had meant by “Hollywood’s future lies in the creator economy, but who is the talent?” It is not just that both are talented content creator. It’s that each has individually and jointly expanded their talents for the purpose of delighting their biggest fans way beyond their original skillsets: Logan Paul started making stunt videos, and KSI started with gaming commentary.
In some ways they are mirroring Walt Disney’s famous 1957 multispoke diagram because they are evolving their personal brands into new verticals outside of YouTube. But in other ways they are subverting it by evolving their skillsets based on what YouTube’s data tells them. It’s not Disney buying ESPN in the 1990s, it is more like Walt Disney boxing welterweight matches in the 1950s when he wasn’t animating because market data told him to. It is surreal to imagine and/or witness today.
Last, it proves that there is something magical about YouTube. I hate using that term, but each of these guys has leveraged the platform to transform into completely different versions of themselves that co-exist at the same time. They have evolved the platform and the platform has evolved well past any familiar reference we may have from when the linear model was dominant. It may just be that the platform rewards *and* evolves with talented marketing geniuses.
Ultimately, the UFC-Prime deal and the events leading up to ultimately do not fit neatly into any previous paradigms. It is extraordinary, and it forces a rethink of what star talent is in the YouTube. [2]
Footnotes
[1] Because DAZN is private we do not know how well the fight performed in terms of revenues or viewership. Back then, DAZN offered a 30 day free trial, and costs $20 per month or $150 for a year. Amusingly, Tubefilter observed a spike in Google searches for “How to cancel DAZN account” after the fight.
[2] My small sample size of 1 GNC store in midtown NYC told me they sell out frequently. I bought a 12-pack, tasted it, hated the after taste and had stomach issues after.There are plenty of websites and Reddit posts describing the same experiences with the aftertaste and stomach issues.
The Internet normally enables and empowers counter narratives but they aren’t happening with Prime. That’s how effective their marketing has been.
[3] In the UK, national supermarket chain Tesco is not stocking the popular Prime Hydration drink due to the "security cost to protect shoppers”. KSI says the only places Prime can be found in the UK are at the supermarket Asda and Arsenal Stadium. It’s now popular on the black market, and KSI is openly angry about that unintended consequence.