The Audience Is the Ad Budget, Until It Isn't

At the height of the craze, a bottle of Prime could be listed on a British resale site for £1,200, roughly $1,500. Tesco rationed it to three per customer. Later, in the same country, some bottles were going for 31 pence. What had collapsed was the appetite for it.

That swing is the whole story of the creator-to-company wave in miniature, and it is the part the success narratives tend to skip. The pitch is seductive and, as far as it goes, true: a person who has spent years building an audience owns something that a packaged-goods start-up normally has to rent, at great expense, from Meta, Google and the grocery trade. The audience is, in effect, an ad budget that was paid for in advance, in content, and that renews itself. The question is what that budget actually buys, and for how long.

The ledger that inverted

The cleanest evidence for the pitch comes from the largest creator on the platform. According to documents sent to potential investors and reported by Bloomberg in March 2025, MrBeast’s Feastables chocolate business had about $250 million in sales in 2024 and a profit of more than $20 million. His media business, which includes the YouTube channels and the Amazon Prime Video show, had similar sales and lost almost $80 million. Tubefilter, working from the same slides, put the figure at $80 million lost on $246 million of revenue.

These are investor-facing numbers for 2024, not audited accounts, and they should be read as the company wished to present itself to a room of prospective backers. Even so, the shape is the argument. The thing that made Jimmy Donaldson famous loses money; the thing it advertises makes money. Beast Industries’ Jeffrey Housenbold was unusually frank about the arrangement, describing the content as “a marketing investment in everything else we do”. Donaldson himself said of his Amazon series, “I lost tens of millions of dollars on Beast Games”, and added that he hoped to break even on the next two seasons.

Read that way, a creator’s channel is not a business with a merchandise line attached. It is a marketing department that happens to sell advertising, and which, in the best case, runs at a deficit because the revenue it generates elsewhere justifies it. A conventional confectioner cannot do this. It buys attention at market prices, every quarter, from intermediaries whose prices only rise. Donaldson produces his attention at cost and, in the 2024 numbers at least, finances it with chocolate.

None of the companies in this piece publishes its customer-acquisition cost, so the claim that the audience is cheap has to be inferred from structure rather than read off a ledger. The structure is suggestive. Tubefilter noted that Beast Industries’ revenue had doubled year over year while profits “haven’t moved much”, and that the company had posted three straight years of losses after roughly $12 million of profit in 2021. The consumer-goods line was the profitable one inside a group that was, on the whole, still spending its way to scale.

The shelf is the second audience

A following converts to sales in two steps, and only the first is the creator’s to control. The first is the fan: someone who clicks, who preorders, who buys the novelty. The second is the buyer at a national retailer, who decides whether the product gets a place that anonymous shoppers can find on a Tuesday.

This is the part of the economics that the audience compresses most dramatically. A venture-backed grocery brand typically has to pay to get noticed by retailers and then pay again to stay. The venture firm Collaborative Fund warned founders in 2017 that placing a single product on a shelf at a major chain can cost “as much as $100,000”, that a product that is not selling quickly enough, often within three months, “it’ll be kicked out,” and that once out it is “nearly impossible to get back in.” That is an old and general account of the trade, not a measurement of any creator brand, and retailers’ practices vary. But it describes the incentive a buyer faces, and it explains why a creator arriving with tens of millions of followers is an unusually legible bet. The demand is, at least on day one, already visible.

Prime is the demonstration. It was founded in January 2022, made $250 million in sales in its first year, and was projected to reach $1.2 billion in 2023. It passed Gatorade that year to become Walmart’s most-sold hydration drink. By the account of the Robin Report, it ended up in more than 90,000 retail locations worldwide. Feastables, for its part, is described in the Bloomberg reporting as having first been sold at Walmart.

What the shelf does to a fad

The same mechanism that put Prime everywhere then turned on it. Retail does not forgive slow sales, and it does not care how the product got its first ones.

The numbers, in order. In the first quarter of 2024 Prime’s UK sales fell 50 percent year over year, from £26.8 million to £12.8 million. In the US, sales fell 40 percent in the first half of 2024, according to Numerator, while competitors in the category kept growing. UK profits fell more than 90 percent. In July 2025, the sports-business reporter Darren Rovell, citing Circana data, reported that Prime’s sales were down 42 percent year over year. Tubefilter’s Sam Gutelle wrote that the data was “concerning, to say the least.”

The most damaging statistic is not a sales figure at all. The Robin Report reported, in a single secondary account, that only 12 percent of consumers bought Prime more than once, despite near-universal awareness among Gen Z. Treat the number with caution. But it points at the distinction the whole genre depends on: awareness is what an audience supplies, and repeat purchase is what a product must earn. Bradley Honan of Honan Strategy Group put the consequence bluntly: “Retail expansion without repeat consumer engagement is a recipe for financial and reputational collapse.” Once velocity stalled, the same account argues, slotting fees, returns logistics and strained retailer relationships ate what profit there was.

Prime also shows the second vulnerability, which is that an audience is a reputation, and a reputation is shared with the brand. A class action filed in April 2024 alleged that Prime contained excessive caffeine and “forever chemicals”; Paul denied the claims. Caffeine concerns, those allegations, and a public rebuke from Senator Chuck Schumer led, in the Robin Report’s telling, parents to pull back. The report also argues that Paul’s own reputation added to the suspicion of parents and regulators. That is one analyst’s reading rather than a measurement, but it names a cost that a conventional brand does not carry: the brand’s controversies and its founder’s are the same controversies. A cereal does not get cancelled because of its chief executive’s vlogs. A drink named for a streamer’s audience can.

The skeptic’s case, taken seriously

There are three versions of the skeptical argument, and they are worth separating, because creators and their investors tend to answer only the weakest.

The first is that attention is not demand. A following is evidence that people will watch, and watching is free. The Fortune account of Prime quotes Andrea Hernández of Snaxshot on the point: “A brand cannot live on hype alone.” She also asked whether the brand could survive its core audience growing up. The audience that lifts a launch is also the audience most likely to move on.

The second is that this has happened before, in other categories, to people with real followings. Business of Fashion, as relayed by Net Influencer, noted that earlier influencer-founded labels such as Something Navy and Gal Meets Glam secured nationwide US distribution deals before quickly fading. The newer generation of creator founders, it reported, largely avoids big investors and retail partnerships and self-funds. One founder quoted in the report said, “We don’t want to be an influencer brand that only peaks because there’s this massive hype in the beginning.” That is a notable shift in behaviour. It suggests that the people closest to the model have concluded that national distribution is not a prize but a test they might fail in public.

The third is that the winners we can name are the survivors of an uncounted field. Nobody keeps a register of creator brands that launched to a polite fortnight and a clearance rack. We have no sourced failure rate, and this magazine will not invent one. What the record does contain is a pattern across the cases that are documented: the early curve is steep, the decay curve is documented in months, and the distribution that was meant to be an asset becomes a liability when the product does not turn over.

The slow version of the same problem

Emma Chamberlain’s coffee company is the useful contrast, because it is not a fad story. It is an operations story, and a duller one. According to investor materials obtained by the newsletter writer Natalie Jarvey and relayed by Sprudge in March 2025, Chamberlain Coffee had revenue of $19 million in 2023 and nearly $22 million in 2024, up 14 percent and short of its own forecast. The company operated at a loss that year; it blamed co-packer problems that caused stock shortages, and executive shake-ups. It was in over 10,000 retailers, and was scaling that back to concentrate on its own cafes under a stated policy of “profitability over growth.” Its forecast for 2025 was $33 million, a rise of 53 percent and a return to profit. Sprudge, notably, did not publish the documents themselves, and a forecast is a forecast.

The point is not that Chamberlain Coffee is failing. It is that the audience solved the problem of getting noticed and left untouched the problems of a food company: sourcing, co-packing, margin, the logistics of ten thousand doors. Reaching the shelf is the cheap part. Keeping the shelf stocked, at a profit, is manufacturing, and no follower count manufactures anything. The retreat to cafes is revealing too. It is a move toward the one channel where the creator can control the product experience, and away from the one in which she is one brand among many on a grocery rack.

The new template

The latest entrants appear to have absorbed these lessons, at least in how they launch. Alix Earle, 25, with more than 14 million followers across TikTok and Instagram, launched the skincare brand Reale Actives in March 2026. According to Fortune, she teased it for months with unlabelled products in her content and ran a teaser Instagram account that later became the brand’s; it had more than 500,000 followers. She built the company with an investor, Imaginary Ventures, and a chief executive with a background in established beauty brands. On why she waited, she said she “didn’t want to just rush into anything or just do anything for a paycheck.”

Fortune also notes that Earle took equity in Poppi, the prebiotic soda, which sold to PepsiCo for $1.95 billion. That is the other half of the model: the creator who does not make the product but is paid in the upside of one. It is arguably a better position than founder, since it takes the audience’s marketing value and leaves the factory to someone else. Fortune’s author is also candid that founders without a 14-million-follower audience cannot copy the playbook exactly. The rest of the field is being sold a method that works best for the people who need it least.

What is actually obsolete

It would be easy to conclude that creators have made distribution obsolete. The evidence says something narrower. They have made the introduction free. The first purchase, the first meeting with a retail buyer, the first week of sell-through: these used to cost real money and now can be bought with content that was going to be made anyway. That is a real and lasting change.

But the second purchase belongs to the product, and the tenth shelf belongs to the supply chain. Prime is what happens when the introduction is mistaken for the relationship. Feastables is the harder test, because it has the better numbers and the same exposure: its own investor slides describe the media operation, the audience engine, as the money-losing half of the company. If that engine stalls or sours, the chocolate will have to sell on its own merits, in a category with entrenched competitors and no appetite for sentiment.

Which leaves the line from the ledger that is easy to read past. The channel loses $80 million so that the candy can make $20 million. An audience is not an asset in the way a factory or a recipe is an asset. It is a loan, extended by strangers on terms they never signed, and callable at any moment. The creators who last will be the ones who spent it on something that could stand without them.