EXCLUSIVE: As the entertainment industry continues to remake itself during COVID-19, Palo Alto-based startup Xcinex believes it has a technological solution ideally suited to the times. As long as customers are OK with being scanned.
The company’s Venue system, scheduled to become available by the end of the year, is essentially a rent-a-system for distributors and a connected-TV streaming device with an added dimension. In a revenue-share arrangement, it plans to enable premium video-on-demand movie releases, plus concerts, comedy shows, theatrical productions and sporting events. All of those areas are under immense financial pressure due to the closures of theaters and the dark cloud over live events.
Xcinex (pronounced “scene-x”) is funded by angel investors rather than well-known venture firms or individuals. While the planned launch of Venue by the end of the year does not yet have any major studios in the fold, it has caught the attention of a number of industry figures. Mena Massoud, an actor and comedian who played the title role in Aladdin, has invested in the company and joined its advisory board. Don Tannenbaum, co-founder and EVP of Xcinex, spent 41 years as a exec at Warner Bros, ending his tenure in 2017 as SVP of sales operations and new technology. Other members of the management team have worked at companies like CBS, Awesomeness and Paramount.
After its initial founding in 2012, Xcinex was jockeying with the Screening Room, Napster co-founder Sean Parker’s PVOD purveyor, which recently rebranded as SR Labs. But unlike SR Labs, which prices day-and-date movies at a flat $50 after a $150 hardware purchase, Xcinex’s Venue system uses scanning technology to count the number of viewers and let distributors charge them according.
Rather than PVOD, Xcinex prefers the term “ticketed entertainment,” and sees flat-rate, on-demand pricing as outdated. As major studios and specialty players all grapple with shifting release windows and business models, the company hopes it can occupy a flexible middle ground. It isn’t aiming to help plant a provocative, Trolls-like stake in the ground, founder and CEO & Founder Cihan Fuat Atkin insists, but instead can help existing stakeholders prosper while giving viewers new options.
In an interview with Deadline, Xcinex Atkin waved away questions about the potentially problematic nature of a device invading private homes to scan people sitting in front of the TV. Consumers have increasingly pushed back on the idea of being monitored by smart TVs, laptop cameras and connected speakers, with companies in some cases facing regulatory or legal repercussion.
“I wouldn’t say ‘monitored,'” he said. “I would say ‘head count.’ It doesn’t do facial recognition. It just makes sure that the number of people in the room matches the number of tickets.”
As to information about who is watching, the CEO likened the setup to Snapchat’s treatment of messages, which disappear soon after they are sent. “The data never leaves our ecosystem,” he said. “It’s encrypted end to end and we’re taking all of the precautions beyond industry standards to make sure that it’s not accessible by anybody. It’s machine vision, so there’s no human being looking at a monitor.”
The Venue device, which hooks onto the top of a TV frame, also offers a mix of free and subscription streaming options, similar to devices made by Roku, Amazon or Google. At $49, the Venue is priced a bit higher than those other streaming products because it adds the option of pay-per-view or day-and-date fare. Customers will “have access to everything they provide, plus access to content that nobody provides,” Atkin said. “The only other option besides us is to go to the physical venue, whether it’s a comedy show or a concert or a new movie.”
COVID-19 and the shutdown of theaters and entertainment venues has provided new tailwinds for Xcinex. But its strategy also contemplates a post-pandemic marketplace when customers newly habituated will be willing to add new entertainment options to the mix. Single viewers could pay less via Venue to watch a first-run movie than the common $20 price point of PVOD. Couples or families looking to stream an original musical or specialty film, conversely, can support theaters by paying per viewer instead of a flat rate. If only two kids in a family want to watch an animated title and their parents didn’t, they could be the only ones “ticketed.” (A grace period allows those unaccounted for to drift through the room for a couple of minutes without being charged.)
Venue has promoted itself as a creator-friendly platform, whose technology allows suppliers to set their own pricing and even geo-target their releases. “Every artist or content company has their own strategy,” Atkin said. “You can’t put it in a cookie-cutter model.”
Bill Dosanjh, the owner of Super Boxing League and Super Fight League, plans to make bouts available via Venue, one of a dozen of programmers committed to the platform. Speaking to Deadline from his base in Dubai, Dosanjh said the popularity of boxing and MMA across South Asia and the Middle East give his leagues an initial foothold and audience in the U.S.
The detail in Venue’s data is a big part of its appeal. “When you get your viewership reports, you normally get back ‘this household tuned in,’” he said. “With this data, you will know how many people are watching in each household.”
Dosanjh doesn’t consider privacy to be an issue. Rather, he sees more opportunity. “It’s about always introducing your content to a new audience,” he said. “We saw that through Xcinex.”
Atkin said the “p” word that the entertainment business should be concerned about is not privacy but piracy.
“As PVOD has come out during COVID-19, these movies have been available on illegal torrent sites immediately,” he said. “What we do is we provide levels of traceablility.” Watermarking technology would enable Xcinex to track down content in case someone tries to pirate it from the platform.