After Moviepass fired co-founder Stacy Spikes in 2018, the entrepreneur got to work planning a Steve Jobs-style sequel. Sticking to his usual script, he’s been devising a new twist for an old industry, this time tackling the flicks before the feature film: “We’ve heard from the advertising world that the large majority of advertising is wasted,” says Spikes.
Spikes is setting out to solve that problem with a new platform called PreShow Interactive, which he beta-launched in April 2021. The service lets users earn credits for watching branded content–while facial detection software confirms they’ve actually watched the ads and that they’re not instead making a bowl of popcorn mid-advertisement.
“We basically created a machine that says, ‘I’m going to pay [a person] for their time,'” Spikes explains of his ad model, which he hopes will create value for users and brands.
PreShow was inspired by, and complies with, data privacy laws like the European Union’s General Data Protection Regulation (GDPR), a legal framework that lays out guidelines for the collection and management of consumers’ personal information. That means Pre-Show users have to opt-in to facial detection, and the data collected about their ad-watching experience is anonymized. In Spike’s words, PreShow is making it so that, for the first time, advertising gets to be consensual.
And to sweeten the deal, Spikes says he’s putting a lot of thought into the branded content that PreShow will serve up to credit-hungry cinephiles. His early research shows that consumers prefer watching what Spikes calls “advertainment”–longer, more cinematic advertisements–before their scheduled content runs (much like in a movie theater). People who love movies generally enjoy visual storytelling, Spikes explains, which is why advertisements like the infamous James Bond Heineken commercial are so popular.
That’s, of course, a boon for advertisers, Spikes says, because it gives brands more time to develop and convey their intended message. And don’t forget about the facial detection, which, combined with short surveys at the end of each advertainment, has allowed brands participating in beta testing to increase consumer engagement by as much as 75 percent.
The other big twist? PreShow will likely create a way for MoviePass users to trade credits for tickets. In 2021 Spikes bought his old company out of Chapter 11 bankruptcy for $140,000 and is working on some changes for MoviePass’ next chapter, including a three-tiered payment system. The new system aims to be more sustainable than the infamous $10 monthly price tag that tanked the company last go round (though Spikes is quick to point out that price cut happened after he left).
Under the tiered system, users would pay a little more for prestige content–though Spikes doesn’t think that monthly costs will be north of $30. And users in Waco, Texas for example, probably won’t pay the same amount as a user in New York or Los Angeles.
With PreShow’s ad revenue and MoviePass’s revised subscription model, it’s possible Spikes might finally win big: “The release of a movie really has not changed in 50 years,” he says: “You make a trailer and some TV spots, you put that out in the ecosystem, and then Friday night you pray that people come. That’s been the business model forever-but we’re talking about a subscription-ized model where you can communicate down to the consumer.”
“Attention is one of the most sought-out assets on the planet because where attention is, money will follow,” he adds.
From the May/June 2022 issue of Inc. Magazine