The YouTuber Hollywood gold rush

Hollywood is buzzing right now about the massive success of Obsession and Backrooms. Obsession has made close to $150 million, with ticket sales actually increasing in its second weekend, and Backrooms just had an $81 million opening weekend. Not only are both movies are trouncing established IP like Star Wars: The Mandalorian & Grogu, they were both made by 20-something first-time (male) directors who got their start on YouTube. And in the case of Backrooms, we can now say that there is a hit movie based on a 4chan post. Excited for Pepe: The Rise Of Soyjak in 2028.

Obsession and Backrooms solidify a trend that really took shape at some point between 2024’s Shelby Oaks and last year’s Sorry, Baby. Though, you could maybe argue that 2022’s Skinamarink, directed by YouTuber Kyle Edward Ball, really kicked all of this off. Online video creators are taking big swings at feature films and it’s broadly working. As Steven Zeitchik at Hollywood Reporter declared over the weekend, “The movie business is about to get VidCon-ized.” Though I think that implies that all of these movies are leveraging the internet and, specifically YouTube, the same way. Which I don’t think is true. Let’s actually break down what’s happening here.

First, yes, Hollywood is being invaded by young and young-ish filmmakers who all cut their teeth online. The majority of these filmmakers are making horror movies, for reasons we’ll get into in just a sec. But they’re making inroads elsewhere, as well. On the comedy front, Matt Johnson and Jay McCarrol (who got their start on YouTube) released Nirvanna The Band The Show The Movie last year and online sketch group BriTANicK made Pizza Movie earlier this year for Hulu. The aforementioned Sorry, Baby, directed by online video creator Eva Victor, was sort of a comedy and though it didn’t get any nominations, it did have Oscars buzz this year. And then you have the huge pack of horror movies from YouTubers. Obsession, Backrooms, Iron Lung, Shelby Oaks, Talk to Me, Bring Her Back, there’s been a lot of them. And Seán William McLoughlin, better known as Jacksepticeye on YouTube, is producing a film adaptation of the gothic horror video game Bloodborne.

As for why horror is having such a big moment right now and why YouTubers are having great success in that world, I think it’s fairly simple. Horror movies are fairly inexpensive to make, they’re fun to watch in a crowd, and diehard horror fans are pretty famously up for anything. Also, the modern world is a nightmare from which we cannot wake, so horror is a pretty good way to make art about that. And as Backrooms has apparently revealed to the mainstream public, YouTube — and the internet at large — has had a strong and dedicated horror community that’s been largely undisturbed by algorithms since the 2000s.

Within this YouTuber invasion, though, there are, roughly, three distinct things happening. There are YouTubers adapting their homegrown IP for the bigger screen like Nirvanna The Band The Show The Movie, Backrooms, and Skinnamarink (kinda). YouTubers being plugged into original films like Obsession, Talk To Me, and Shelby Oaks. And YouTubers effectively being the pitchmen to get people in the door like Iron Lung and the upcoming Bloodborne movie. The Iron Lung case is a little complicated because it’s a video adaptation. But the writer, director, producer, and star Mark Edward Fischbach, better known as Markiplier, was quite literally the face — the only face — of the film.

Separating these three lanes out is important because we’re still trying to figure out what the value of a YouTube audience is exactly. Are YouTubers creatives? Are they producers? Are they undeveloped IP? Based on success so far, in typical messy internet fashion, I think the answer is “all of the above, but, also, it depends.” I actually don’t think a single YouTuber, even at the MrBeast or Pewdiepie level, is big enough to launch a hit movie on their own. Being hugely popular on YouTube might even preclude them from doing well with a feature film actually. Over the weekend, YouTuber and animator Joel Haver, who has experimented with feature films, dropped an interview with YouTube long-hauler and filmmaker Freddie Wong and the timing didn’t feel coincidental. As if to almost say, “Hey Hollywood, remember us?”

Of all the movies I’ve listed here the only one that truly adapted their online video channel was Nirvanna The Band The Show The Movie and that was only after a nearly 20-year hiatus and their old videos becoming lost media. While with Backrooms, yes, there is a Backrooms YouTube series, but it’s also a seven-year-old meme and the film adaptation is a completely standalone story. The point being that we may be watching the final rungs of a real ladder between YouTube and Hollywood emerging, but it’s not linear and it’s definitely not as simple as just putting a long YouTube video in a theater.

But there is clearly juice there. The trick for studios rushing to hand out blank checks to random creators will be figuring out exactly what kind of creator (and audience) they’re tapping into. I assume there are going to be a lot of misfires. But it’s also very possible that by the time the Oscars start airing on YouTube in 2029 a YouTuber-led movie will win one. A sentence that would have been unthinkable to type out even five years ago.

Her name is Selia Hooten and she is officially our very first intern. This is super exciting. She’ll be running Garbage Day’s Instagram for the summer so please head over there and say hi! And if there’s anything you want us to do with that page, let us know.

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Last week, I wrote about the eerie similarities between the dot com bubble and the current AI boom. Both were based on feverish speculation, the extremely short-sighted belief that a single feature of the internet is its own industry, and a desperate need to buy up some form of internet real estate. My argument for a while has been that some form of generative AI is here to stay and will continue to evolve, but standalone AI products and AI companies are almost certainly doomed to fail. This is basically what always happens — websites, digital media, crypto — and it almost always happens after a handful of the bubbly companies du jour decide to go public.

The New York Times reported today that Anthropic is eyeing an IPO for as soon as this year. Meanwhile, SpaceX has just rolled up xAI and is eyeing an IPO of its own. No word on OpenAI filing for an IPO, but it’s clearly coming. As for how these IPOs will play out, well, here’s a shotgun blast of bad news from the AI world for you.

Bain & Co. has a survey out revealing that nearly half of AI companies with more than $100 million in revenue are basically not making enough money to exist. Michael Burry (The Big Short guy) is posting full-on red-string-corkboard diagrams on X now, claiming Nvidia’s balance sheet doesn’t make sense. And, finally, GitHub launched token-based billing and users are burning through their entire month’s budget after barely a full day of work. Oh wait, also, SoftBank CEO Masayoshi Son said today that the AI boom is “50x bigger” than the dot-com bubble and that “there may be some correction, but that will be the best investment opportunity to me.”

Buckle up, folks.

Here’s a little mystery for you. Back in March, a member of Kalshi’s “Growth” team reached out to Garbage Day, asking if we wanted to promote their billion dollar college basketball bracket. This was confusing for a few reasons! First, we almost never cover anything related to sports in this newsletter. Second, we’ve written quite a bit about how prediction markets are, by definition, evil. And, third, the spokesperson from Kalshi believed that the campaign would “align” with our audience. Brother, our audience doesn’t want us to even mention X, crypto, or AI, you think they’d want us to advertise Kalshi?

What I do know is that we weren’t the only ones Kalshi reached out to. As The Wall Street Journal reported back in March, Kalshi has been doing a huge influencer marketing push this year. I’ve reached out to Kalshi several times over the last few months, hoping to get some more information about how we got put on the influencer list, but they haven’t responded.

If you work at Kalshi and would like to talk to us about this, my Signal is ryanbroderick.69420. Excited to hear more about this!

TheBurntPeanut is a VTuber — or PTuber — that uses a peanut avatar and is, at least in theory, very popular. Though, as we’ve written before, his popularity is more than a little dubious. TheBurntPeanut is also, not to be too woke, kind of a mess! He has a regular segment on his stream called “Slur Saturday.” He’s also just extremely annoying. But that hasn’t stopped both AT&T and Fortnite partnering with him.

AT&T sponsored an esports tournament called The Annihilator Cup and then changed their X profile pic to TheBurntPeanut until people started complaining. Their post calling out TheBurntPeanut’s fans, the “bungulators” (groan), is still up, though. And users are equally upset that TheBurntPeanut is going to be added to Fornite this week.

Look, when this guy has a large-scale Dr. Disrespect moment, at least you can say you heard about it hear first.

It’s summer, baby, so we are being inundated with dumb viral food trends. I don’t have enough data to back up the idea that idiotic food content is seasonal, but I fully intend to ask our researcher Adam about this. Last week, I wrote about dot cakes, which have taken over TikTok. Meanwhile, on apps like Instagram and X, Kool-Aid Pineapples are blowing up.

It is, as the name would imply, a big jar of Kool-Aid with pineapple chunks it in. And a lot of the Kool-Aid pineapple videos are filmed in parking lots, which makes me think this is actually a Facebook Marketplace phenomenon. If you’ve purchased one, let me know! One Kool-Aid pineapple video, in particular, has gone very viral because the teenage boy in it has one of the most remarkable accents I’ve ever heard in my life. Here’s an interview with him. Apparently the kid’s name is Bubba Harrelson. And I believe he is saying, “that be tough, that be good.”

P.S. here’s some good journalism.

***Any typos in this email are on purpose actually***