Whalerock Industries lands a huge deal – the Kardashians. Together they plan on dominating the digital space with the launch of several Kardashian-branded digital channels. This “media hub” available via web and mobile app offers their insatiable fans all-access, basically filling in the gaps between the show and their social feeds.
“I see what we do on social media as the appetizer,” said Khloe Kardashian. “This is the whole dinner.”
What Is Whalerock’s Strategy?
These digital channels will become direct-to-consumer offerings with a mix of paid (meaning a monthly subscription) and free programming. Meaning, they’ll likely bypass major distribution platforms like YouTube and Vimeo. And, they’ll capture the revenue that leaks away from the YouTube advertising revenue split (YouTube takes about 45 percent) The Whalerock owner, former ABC executive Lloyd Braun is trying to capitalize on the success of standalone networks like Glenn Beck’s The Blaze. Glenn Beck left Fox News created his own channel where his fans pay $9.95 per month for his content. The Blaze boasts 400K paying subscribers. Braun believes his strategy will shake up the industry and transfer power back into the hands of celebrities – not TV networks and distribution platforms.
Is It Sustainable?
It sounds like a great strategy, especially when you build channels based on celebrities with built-in digital fanbases. But at what point, do consumers get fed up with their numerous subscriptions all promising the same thing – content whenever and however you want it?
The monthly fees start to accumulate: Netflix charges $7.99, Hulu charges $7.99, The Blaze charges $9.95. If Whalerock’s idea catches on we’ll have at least 5 Kardashian channels alone. Are we approaching the cap at which point we cant support any additional subscription-based services? I think so. I would rather see these companies not just take the easy route and make consumers pay for content they’re accustomed to receiving for free. It works for a small targeted audience willing to pay a premium for content from a celebrity they identify with, i.e. the Kardashians and Glenn Beck. This can’t be a one-size fits all model, like the Whalereock announcement seems to be describing. I would much rather see these content channels get more creative with alternative revenue sources like merchandising, branded content/sponsorships, branded games (a la Kardashian’s Hollywood) or even branded services.
