Start-ups sprinkle stardust over wishes, and mint money

More than 2,000 rhinestones shimmered and sparkled on Marilyn Monroe as she let out a deep sigh before breathily singing ‘Happy Birthday to You’ to John F Kennedy for his 45th birthday. She thanked him for all the battles he had won and for dealing with America’s problems ‘by the ton’. It was not the best poetry but the former US President seemed so pleased with the whole performance that he said he could retire from politics, now that he had been wished in such a “sweet and wholesome way”.

Sixty years after Monroe sang for Kennedy, we live in a world more starstruck than ever. Today we engage with celebrities more intensely, with artistes talking to us every day, even every few hours, through Instagram, Twitter and Snapchat. We know what workouts Shraddha Kapoor likes, which party Priyanka Chopra is attending that evening, how sunlight falls in Alia Bhatt’s balcony and why Anushka Sharma’s pet lab is sad. They have come to occupy a liminal space of celeb-friend. Therefore, a birthday or a congratulatory wish from them (even without rhinestones and Monroe) carries shimmer and warmth. It can make a person’s day.

An enterprising few have tapped into this opportunity and, as recently as late 2019 and early 2020, start-ups have set up celebrity-engagement websites. Through these websites, you can choose a celeb (like you would a cake) and ask for a personalised message to be delivered through them. A voice or a video recording is sent to the recipient in two to three days. The websites have seen reasonable success so far with start-ups, such as GoNuts, UNLU and Wysh, making Rs.600,000 to Rs.3.75 million within few months. Mahesh Gogineni, founder of Wysh, says the idea has got more legitimacy after the world’s largest celebrity-engagement platform, Cameo, made headlines last year raising $50 million at a valuation of $300 million. As per media reports, Cameo, too, is exploring a partnership with Times Bridge to enter the Indian market.

Popularity of the over-the-top (OTT) platforms and the sudden spurt in their viewership after the lockdown has acted as an catalyst. Nikhil Dalal, senior consultant at RedSeer says, “Stars were missing out on interacting with fans, promoting their work… several platforms came forward with online concerts and meetings. These celebrity-engagement platforms are an offshoot of this trend.” Joji George, co-founder of GoNuts, adds that the lockdown has made digital invites the new norm. He says, “Imagine a favourite and respected celebrity such as Shankar Mahadevan or Shaan personally inviting guests on your behalf through a quick video greeting.” Memorable, surely.

Been there, sold that

The idea of celebrity-engagement is young but the entrepreneurs in this space have impressive resumes, having founded and sold successful ventures before this. For example, George started GoNuts in February 2020 along with Mayank Gupta and serial entrepreneur Vinamra Pandiya. Gupta and Pandiya were attending a child’s birthday party and wondered if they could get Doraemon to send his wishes. It was then the idea was born and they got in touch with George, an alumnus of Chicago Booth School of Business, where Gupta had also studied. George was by then familiar with the entertainment industry, having held leadership and C-suite positions at Sony Music, MTV Asia, UBM, Yahoo! and Percept Sports and Entertainment.

Wysh was started by Gogineni, Varun MS and Manan Maheshwari after they worked on Gifskey, a gifs and stickers’ platform, which was a B2B company selling content including plenty of celebrity content to third-party apps. The three of them, best friends for 15 years, had already sold their first start-up Zapluk to Quikr. This salon-at-home service had grown 30x in 11 months. With such an impressive record, it hasn’t been hard for them to get investors on board and so far they have raised over $3 million from Kalaari Capital, Whiteboard Capital and AET Fund.

Unlu’s Vipul Agrawal, Anurag Dalia and Akshay Pruthi joined hands with the former VP of Ixigo, Himanshu Periwal, after the trio sold their start-up to the travel e-commerce company. After the acquisition, the four of them decided to work together again and began researching where the next big opportunity was. In the meantime, they were involved with an experiential marketing business that required them to manage social media handles, plan campaign strategies and engage with fans of over 100 celebrities in India, Southeast Asia and Australia.

While the good sense of experienced founders is important for the success of these start-ups, what is also crucial is the catalogue of celebrities they can sign up on their platforms.  This depends on the network they have built within the entertainment industry and the deals they can offer to the stars. Celebrities can get paid anywhere between Rs.500 and Rs.50,000 per video across these platforms, based on their social equity, which is an approximation made from their number of followers, power of amplifying a message and so on.

GoNuts is focused more on music, lifestyle, television and sports. Their list of movie stars and A-listers is shorter than peers. “Top movie stars are used to getting highly paid. They tend to expect retainer money, which we are averse to,” says George. Besides a one-time fee, artistes also earn through a revenue-sharing agreement through these platforms. Usually the money earned is split 80:20 or 70:30 or 75:25, with the larger share going to the celeb. Unlu’s line-up, which includes ace shuttler Saina Nehwal, Huma Qureshi and Kalki Koechlin, is impressive and the co-founders say that they built it by approaching the popular names first. “This helped us set the bar and price level before launching and approaching other artists,” says Agrawal, who is also a well-known celebrity manager. Within 45 days of launch, the start-up had clocked $50,000 in billing and signed up over 500 artists across categories.

While most were chasing national icons, Wysh decided to start small by targeting regional stars from movies and TV shows; it is yet to enter the sports and lifestyle categories. Therefore, they began with names such as Samantha Akkineni, Kajal Aggarwal and Aditi Rao Hydari among 50 others from the Telugu film industry. They eventually expanded to Punjabi and Hindi (Bollywood) and are targeting Malayalam and Tamil next. “The Southern industry is a complex business and works quite differently from Bollywood. Each celebrity manager there handles only three to four artists and not 20. Besides, each state enjoys huge popularity in foreign countries,” says Gogineni. GoNuts, too, plans to cater to region-specific markets in the coming months.

“It is relatively easy to get a celeb on board,” says Anshu Prasher, general partner at Whiteboard Capital, an investor in Wysh, “but what is difficult is getting them to respond within the promised time. It is crucial to respond on time to retain customers.” Prasher proudly adds that Wysh has 98% request-completion score.

‘Brand’ of merry men

A major source of income for these platforms, and therefore for their partner celebs, is brand partnerships. It is when the stars post shoutouts and promotional videos on their social media handles. “Celebrity engagement has been a rising segment, paving the way for newer forms of niche, personalised offerings for consumers,” says Albert Almeida, COO-live entertainment, BookMyShow, which has a tie up with GoNuts. 

Of course, ad agencies have been arranging this for ages for bigger brands, but these new platforms help smaller agencies and brands connect with modestly-priced celebs. Wysh recently got one of its stars to endorse apple-cider gummies and then another to promote a rural ATM chain. GoNuts had Shaan, Kailash Kher, Usha Uthup and Shankar Mahadevan promote an Apple reseller, Imagine, with videos for Independence Day.

Unlu’s Agarwal says that their social media marketing campaigns cost a tenth of what it would otherwise. The platforms work better for the celebs too, says Karthik Srinivasan, communications strategy consultant and social media branding expert. “To bag ad deals, a TikTok star or a social media influencer has to network and pitch to the brands regularly, to ensure that they have a steady pipeline of offers and endorsements. It is very much like working as a freelancer. These platforms give them a chance at a steady income and employability.”

Whiteboard Capital’s Prasher says, “We have these wrong notions that all celebrities make a lot of money. It’s only true of the topmost layer. Yes, post-lockdown the massive rate at which the platforms grew in the past few months will slacken, but it will surely continue to grow at a steady pace.”

RedSeer’s Dalal is not so certain. “There are already platforms such as Instagram and TikTok where brands and artists go for live sessions and posting videos. Historically, an app needs to have 50 million monthly active users for the advertisement spend to pay off. With their current reach, it is hard to achieve or at least will take time,” he says. He adds that most of the platforms target Tier-II cities but overall spending in these cities is likely to fall from the recent job losses. Therefore, the platforms may not see any more than the initial trial orders.

There are other business models in this space, like EscapeX which helps celebrities create their own apps. Sonam Kapoor’s app, created on Escapex, has so far seen 100,000 installations. But, as Srinivasan points out, it is one thing to install an app and quite another to check its updates regularly, maybe on a daily or even a weekly basis. If the users don’t check it regularly, the stars have little incentive to create new content, and slowly the apps are relegated to dusty corners of smartphones, where they hide until the next clean-up.

Truefan, which has tied-up with A-listers such as such as Hrithik Roshan, Ranveer Singh and Kareena Kapoor, is fighting this obsolescence by gamifying their app and keeping the entry fee low at Rs.40. Here, the users get to play quizzes and games related to their favourite celebrities and as they win and collect points, the ultimate prize is a video message from the actor. The user is charged additionally for the games in smaller ticket sizes. Truefan recently raised $4.3 million in seed funding from prominent investors such as Ronnie Screwvala, Mayfield India and Saama Capital.  

With all these platforms and apps, Srinivasan warns that celebrities should also be careful about over-familiarity. “They need to control their value and premium, which might cause many of them to get off these platforms. There is a real danger of over-exposure if they don’t choose the right platform. Obviously, the celebrities and their managers are aware of that and are currently just trying to utilise the downtime of lockdown,” he says.

The lockdown has definitely helped these start-ups. But, if they are to survive in the post-lockdown world, they have to innovate beyond video and voice messages. People tire fast of celebrities and no one knows that better than celebrities themselves. Therefore, once the offline channels are open, the stars may pull out of these platforms, too. To meet that challenge, the celeb-engagement platforms may need more than star power.