The widely followed family announced this week that it is releasing apps for four of the five Kardashian sisters (Kourtney declined for now) that allow fans to follow their comings and goings directly (for a fee), bypassing regular social media.
The Kardashian apps show that for celebrities with sufficient popularity, it's better to go directly to the customer rather than through an intermediary -- even a frictionless one like Facebook or Twitter. If the trend catches on with other celebrities, it could have a big impact on those social media outlets.
As Neil Cybart noted on Twitter, the Kardashians' apps have been rocketing up the App Store charts.
Yesterday, the standings for the apps were Kylie at No. 1, Khloe at No. 13, Kim at No. 32, and Kendall at No. 44. Today, Kylie is still No. 1, with Khloe at No. 9, Kim at No. 11, and Kendall at No. 17. Clearly, this is a prodigious family.
It should be noted that all the apps were brought to the market with the help of Whalerock Industries. Whalerock is headed by Lloyd Braun. Eleven years ago, Braun -- who helped bring The Sopranos and Lost to the small screen -- was brought in to Yahoo! (YHOO) by then CEO Terry Semel to bring Hollywood talent to be shown on Yahoo!
Is that even controversial anymore? Yet, Braun and Semel were vilified by many at the time. We basically had to put up with seven years of debating if Yahoo! was a technology or a media company after that.
Braun's idea a decade ago was to bring stars more directly in contact with their fans. Instead of watching them through a cable box, you could see them on the Web and interact with them more. Fast forward to today, and Braun is doing exactly the same thing with the Kardashians, but using mobile and over-the-top -- distribution over the Internet without traditional networks, cable TV, or even major social networking sites.
Why are the apps OTT? Because each has a subscription model tied to it, at $2.99 a month for the true diehard fans. Are there many of them? There sure seem to be.
Yesterday, a post appeared on Medium from Alaxic Smith discussing how he was able to get inside each of the apps and actually see how many people had signed up for the service. (Smith confirmed to me this morning that he's since taken the post down, although he won't say more on why.)
What he found was that, in less than 24 hours after being released, 891,340 users had signed up for all four apps.
What that means is that, if all of those passionate users converted to pay subscribers, the Kardashians (and Whalerock) will be earning $32 million a year from their OTT service. And that's just from the users in the first 24 hours.
We still are in the early days of figuring out which talent will make the leap to go OTT. Glenn Beck has 400,000 subscribers paying him $10 a month, which is $48 million a year. On the other hand, Sarah Palin recently shut down her pay Web site and network, presumably due to low sign-ups.
On a recent podcast, Peter Kafka and I discussed what type of talent might go OTT. We both thought Howard Stern would do well. Bill Simmons and Jon Stewart could probably also go, but there are reasons why they might prefer to stay part of a bigger media company (as Simmons did).
Peter argued that OTT could be a refuge for those seeking to unshackle themselves from big media (as it was for Beck) or for a totally new crop of talent coming up on Google's (GOOG) (GOOGL) YouTube. Michelle Phan is an example of this. In fact, her subscription service just raised $100 million in venture capital money to try and monetize her 1.5 million YouTube subscribers. If she got all her YouTube fans to subscribe at the Kardashian price point, Phan would be making $54 million in annual revenue.
Peter and I failed to mention the Kardashians, though, in hindsight, it's an obvious move for them. They're taking almost a Michelle Phan approach to sell their subscription service: tune in for beauty and style tips and other sneak peeks into their lives.
All celebrities must be watching how the Kardashian experiment in OTT goes. It used to be that stars interacted directly with their fans by going on Facebook or Twitter. They will likely use those platforms to promote themselves in a one-way fashion.
But this Kardashian subscription service really points the way to really make money from being a celebrity: have a core OTT service and then tie yourself to a bunch of products you own a piece of rather than just making money off endorsements -- although you can do that too.
Celebrities are getting more sophisticated in leveraging tech and social media. The Kardashians are leading the way.