Channeling big names — through the Web

Published 12:00 am Tuesday, February 24, 2015

SANTA MONICA, Calif. — An under-the-radar media company here called Whalerock could become a threat to the entertainment establishment.

Following the cut-out-the-middleman model pioneered by Glenn Beck, who left Fox News in 2011 to start his own subscription-based Internet television channel, Whalerock Industries has made deals to create similar personal networks for some big names: the Kardashian sisters, Howard Stern and the rap star Tyler, the Creator.

These channels, set to arrive in the coming months and available via the Web and a mobile app, will offer a mix of paid and free programming, said Lloyd Braun, the owner of Whalerock and a former senior executive at ABC and Yahoo. Depending on the channel, offerings will eventually include music, video, exclusive photos, interviews, merchandise, games and other “premium” content, Braun said.

Whalerock’s longer-term goal is to shift the power — and the lion’s share of the profit — from traditional media companies and toward talent. Beck has an estimated 400,000 subscribers paying $9.95 a month for TheBlaze TV, his streaming network, and continues to host his traditional radio show. Whalerock is now trying to burst through the door he cracked open. Braun made it clear the goal is for “the ultimate control” to lie with artists, not media companies.

He said these “media hubs” should not antagonize the likes of NBCUniversal’s E! network (home to “Keeping Up With the Kardashians”), Sirius XM Radio (Stern’s home since 2006) and Sony Music Entertainment (Tyler, the Creator’s label). “We are well-aware that current business deals exist, and we respect them,” Braun said.

Braun said he planned to create app-based channels for 12 to 20 performers and brands by 2018. If he succeeds, Whalerock could bundle the channels in various configurations and make distribution deals with cable providers and services such as Apple TV, just as Viacom and Time Warner do today with networks MTV and CNN.

Reaching the masses used to require access to distribution. If you wanted to publish a popular book, you needed a Random House. If you wanted to release a hit song, you needed a record label. But mobile apps and the Web are making distribution ubiquitous, as Netflix has proved, and Braun and others — WWE, CBS and comedian Louis C.K. among them — are now trying to capitalize on that shift.

In particular, Whalerock is focused on a new generation of “cord nevers,” people who have never paid for a standard cable TV package, and “cord cutters,” who have canceled their cable service. Instead, these consumers pay only for the networks or programs they want to watch. And they decide how, when and where to watch them. Increasingly, according to Nielsen, a mobile device is the preferred viewing platform.

“I would rather be a guinea pig than spend my career rearranging the chairs on the Titanic,” said Christian Clancy, a music manager whose clients include Tyler Okonma, aka Tyler, the Creator. “The problem for artists like Tyler is that once they get done paying all of these middlemen, they’re not left with much.”

There still is a middleman, of course: Braun, whose company will handle things such as ad sales, design, marketing, e-commerce, technology infrastructure and video production. Whalerock will make money by taking a cut of the net revenue. Braun declined to be more specific; terms vary depending on the client.

For the record, Braun — a Hollywood character if there ever was one, often speaking in a near shout and gesticulating wildly — does not see himself as a middleman.

“We’re not a middle,” he said. “We’re a facilitator.” (Fun fact: Braun was the inspiration for a recurring character, Lloyd Braun, on “Seinfeld.”)

To help finance Whalerock’s digital expansion, Braun sold a minority stake in the company to GF Capital, a New York private equity firm that describes itself as making investments of $15 million to $50 million. It has also backed Blue Man Group and the Collective, a talent management and digital video production company.

Okonma’s app will roll out by June, according to Jeff Berman, Whalerock’s president. Channels for each Kardashian sister — Kim, Khloe, Kourtney, Kendall and Kylie — and Stern will follow in the months afterward.

“Each will look really, really specific,” said Raphy Fedida, Whalerock’s head of design.

Pricing decisions are still being made. Nearly all of the channels will be supported by advertising and free to consumers. Many will also sell subscriptions for premium offerings and special offers, such as a pay-per-view concert or exclusive merchandise.

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