Whalerock Industries founder/CEO Lloyd Braun took the stage at The Grill on Tuesday to discuss the evolution of media and how to make content outside of the system.
The former ABC and Yahoo exec described his company’s approach to media hubs, which are essentially apps that contain every conceivable type of media. Whalerock operates media hubs for several members of the Kardashian family, as well as rapper Tyler the Creator. Kourtney Kardashian’s app will be coming soon, as Braun pointed out that each Kardashian has their own audience and they’re not necessarily the same.
“They all have different audiences. We’re not programming for the people in the room or down the street, but programming for those audiences. All the girls have the capacity to live-stream from their phones. Kylie is involved in an anti-bullying campaign so she and Caitlyn [Jenner] put on blue lipstick and we took a piece of that live-stream and made a video, so we repackaged it. You feed this beast all the time, but there are no rules to any of this. We’re creating the rules as we go,” said Braun, who adding that there are a myriad of revenue streams from affiliate fees to creative advertising. “E! is not involved, but I’d love them to be involved someday, because the show is a huge engine for all of this.”
Tyler the Creator’s was the first media hub that Whalerock created, and he was a deliberate choice due to his passionate fanbase.
“Tyler’s favorite movie is ‘Jumanji,’ so we went to Sony and licensed the movie for literally a week for his app. They didn’t even know who would be in charge of something like that, but we were able to navigate it and we told them to give us a trailer for whatever movie they wanted to promote. We had 35,000 people watch ‘Jumanji’ on the app that first night, and we know everything about those people,” said Braun.
Right now, each app is free to download, but for $3 a month, users can unlock premium content that offers a far more intimate personal experience.
“We’re not saddled with the problems that existing media companies have. Those are brick and mortar companies operating in an analog world. Back in the day, the key to everything was distribution. Someone had to press a record or publish a book and put it in a record store or a book store. If you didn’t have access to distribution, you’re out of luck, because those businesses were built on that premise and have to continue to service those big infrastructures.
Braun pointed out how media companies monetize rights by selling ad time, but sports leagues and their teams get to monetize everything else, such as merchandise. “In the world we’re heading into right now, if you’re a media company, you want to own and monetize everything that you can for everything that you’re doing. What this new world allows you to do is just that, but you have to bring value.
Braun cautioned the press not to rush to judgment based on overnight ratings. “Years ago, Alex Wallow, my former boss at ABC, would throw a fit about fast national numbers. He’d cut your arm off if you talked about the overnights, and he was right! But I guarantee TheWrap is talking about fast nationals today and you should. If the show performed poorly in fast nationals, you’re going to say it and everyone will believe that show bombed. But if there’s a huge bump in Live +3, now you’re trying to change the perception that the thing was a flop, so you still want those fast national numbers to be good because that’s what everybody is writing about. It’s a tiny piece of the picture. Everybody knows that’s not how people are watching shows. Perception matters in a lot of different ways and the paradigm has changed, but no one want to read that the numbers were bad.”
Back in the day, a record company would ask an artist to give them a piece of touring simply because they’re the reason the tour exists. The artist would have no incentive to give up a piece of that pie, but according to Braun, “if you go to the artist and offer to help them do the things they can’t do on their own,” they’re more inclined to share revenue. “If you ask any of the Kardashian or Jenner sisters, they’re having the time of their lives because this is opening so many revenue streams and new opportunities that were right there, but they weren’t able to access before.”
“Jeff Zucker would love to have everybody out there go on their phone and get CNN, but he’s got MSOs to deal with and they have deals. Will subscribing to a television bundle be the requirement in the future. I get why that’s the case now, and if I was running one of those companies I wouldn’t be running away from that revenue either, but that’s not a sustainable model. And the Milllenials increasingly are not going with that model. They’re getting older and more people are doing things the new way,” said Braun, before concluding that “people do what’s easy and what’s simple.”