stacy spikes
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MoviePass co-founder’s PreShow Interactive raises $3M to expand into gaming
PreShow Interactive is giving gamers a new way to earn in-game currency in exchange for watching ads — a concept that’s become familiar in mobile games but hasn’t really made much headway on PCs or consoles.
The startup is led by MoviePass’ founding CEO Stacy Spikes. When I spoke to Spikes about PreShow two years ago, he was beta testing an app that provided users with free movie tickets in exchange for watching ads. But obviously, theatrical moviegoing has taken a big hit in the past year.
Spikes told me yesterday that he’d always hoped to bring the PreShow concept to four categories — theatrical movies, gaming, subscription streaming and video on demand — but the pandemic forced the startup to shift focus more quickly than expected and explore what a gaming experience might look like.
The current plan is to launch a new PreShow Interactive app this summer, where viewers can connect their in-game accounts and identify how much virtual currency they want to earn. Then they watch a package of ads and PreShow will automatically transfer the currency to their account — in other words, it’s buying the currency for them.
Users will have to download a separate app to watch the ads and get the benefits, but Spikes said this is actually better than trying to integrate advertising or branded content into the game itself, which can be a slow process for the developer and the advertiser, while also being distracting for the players. And this means PreShow Interactive should be able to support 20,000 games at launch, across PCs, consoles and virtual reality.
Image Credits: PreShow Interactive
“We just didn’t see the purpose of spending the time on integrations when it’s not really necessary,” he added. “Our deal is only with the consumer for their time. We’re saying, ‘This is your time. It has value.’ ”
One of the key elements to Preshow’s approach is technology that can detect when the viewer is actually looking at their phone screen — the ads will stop playing if you turn away. This has been criticized as “creepy surveillance tech,” but Spikes claimed that early PreShow users have embraced it. He also argued that it’s more transparent than the data collection and targeting currently driving online advertising.
“We used to think data was the new oil, but now our feeling is that permission and engagement and attention is the new oil,” he said.
In addition to revealing its new strategy, PreShow is announcing that it has raised $3 million in seed funding led by Harlem Capital, with participation by Canaan Partners, Wavemaker Partners, Front Row Fund, ROC Fund, BK Fulton and Monroe Harris.
And to be clear, Spikes said PreShow isn’t abandoning theatrical movies. He said that the PreShow app will eventually offer both movie and gaming deals “under one roof,” but brands aren’t currently eager to advertise to moviegoers.
“We’re ready to go when the marketplace is ready to go,” he said.
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MoviePass co-founder’s new startup PreShow gives you free movie tickets for watching ads
As founding CEO of MoviePass, Stacy Spikes has already changed the way we think about paying for movie tickets. Now he’s pursuing a new approach — providing a free ticket to people who watch 15 to 20 minutes of ads.
Spikes noted that when it comes to watching movies outside the theater, there are three basic business models — pay-per-view, subscription and ad-supported. MoviePass brought a subscription approach into theaters, but Spikes (who stepped down as MoviePass CEO in 2016) told me he kept wondering, “Well, why can’t you have an ad-supported version that will allow you to go to movies for free?”
It’s hard to imagine digital advertising being worth enough to really pay for that ticket, but Spikes insisted, “You’re paying your way. This is not going to be a loss-leader model. It’s an ad-revenue based business.”
To make that work, he said the new service, called PreShow, is bringing a of couple innovations to the table. First, there’s facial recognition technology that ensures you’re actually present and watching the ad.
Spikes demonstrated this feature for me last week, showing me how his face unlocked the PreShow app. Once he’d chosen the film he wanted to watch, he was presented with a package of video ads that were specifically selected to run with that movie — and any time he looked away from the screen or moved too far away from his phone, the ads would stop playing. (Apparently the sensitivity can be dialed up or down depending on user feedback.)
Spikes also said the ads should tie into the film in some way, whether that’s thematically, or by highlighting products that are also featured in the movie. And they’ll always include an opportunity to further engage with the advertiser.
So although 15 to 20 minutes might sound like a long time to watch ads, it should be more interesting for the viewer than just a random collection of promotional videos. And for the advertisers that are already paying for product placement in a film, this could be a way to reinforce their message with consumers who are actually watching the movie. (Spikes also compared this to the marketing packages that usually play before showtime in theaters — hence the company name.)
By watching one of these 15 to 20-minute packages, you should earn enough points to purchase a ticket at the theater using a virtual credit card provided by PreShow. Technically, those points can be used to buy any movie ticket, but Spikes said you won’t be able to earn more than two tickets at once, “so people don’t stockpile.”
As for whether PreShow is competing with his old company, Spikes said, “I don’t think they’re competitive in any way. If you compare a subscription platform to an ad platform to a pay-per-view platform, they’re different animals.”
Stacy Spikes
The plan is to start testing the service with a select group of users in the next three to six months, and to find those users, PreShow is launching a Kickstarter campaign today. Pledge levels range from $15 to $60, with the amount you pay determining how early you get access, and how many friend invites you receive.
Spikes said he’s less interested in raising money (which is why the campaign’s official goal is only $10,000) and more in attracting film lovers who want to try the app.
“It’s a way to have innovation happen more organically, versus if you just open it up for the general public,” Spikes said.
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