California startup XCINEX is betting on moviegoers staying at home

Posted December 8th, 2017

Picture this: A new Marvel superhero movie is about to come into theaters. You’ve been excited to see it ever since the last Marvel movie. The only issue is, you live at least 20 miles from the nearest theater, and only go into town when you really need to. 

Related: Let’s talk about the “Avengers: Infinity War” trailer

Or, imagine you’re a movie fan who’s also a new parent taking care of a child at home, and you don’t have the time to just go downtown to watch a movie. You have to carefully plan your outings and you’re missing out on a lot of new films.

Or still yet, imagine that you’re a disabled person who doesn’t leave the house that  much, and you like watching movies on Netflix or HBO. You still want to see that new Marvel movie, but takes a lot of time and energy to go down to the theater.

How do you watch new movies? Probably through Netflix or on-demand. Maybe you go to the local Wal-Mart and use the Redbox there. Or maybe you just stay at home.

Related: I watched the ‘Christian Netflix’ for a week. Here’s what I learned.

A new, in-home movie viewing device wants to change that.

XCINEX (pronounced “See-nex”) is an entertainment distribution company based in Palo Alto, Calif. that aims to bring its new on-demand service, Venue, into living rooms across the country.

For a yet to be determined price per person (pricing will be determined by content owners), Venue will allow you to watch new release movies from the comfort of your own home.

“Disruption. That’s what’s really needed in the film industry,” XCINEX founder and CEO Cihan Fuat Atkin said over the phone last month.

But just how does Venue work? That’s where technology like blockchain systems comes into play.

Scan, pay, then play

Venue is an app and a utility box, much in the same vein as Apple TV. The app allows you to use your phone as a remote to control the utility box that is attached to your TV. The app will be free; the box will run anywhere from $49.99 to $160 depending on what kinds of bells and whistles you want the box to have. Eventually, Atkin said, Venue will become like a Roku or a Chromecast, a housing device for all your streaming services.

Related: I tried MoviePass, and if you’re a movie lover, it’s almost too good to be true

What’s different about XCINEX’s Venue is that instead of paying a subscription, like MoviePass or Cinemark users, Venue allows the chance to pay per person. But how does the system know how many people are watching?

Cameras. Specifically, tiny little cameras with an 180-degree field of vision that monitors your living room for the duration of the film to make sure that the number of tickets bought corresponds with the number of people in the room. These cameras scan for thermal recognition, eyes, noses, lips and other facial cues to make sure that real people are actually watching the film. (This isn’t just done to make sure the company is getting its money’s worth; it’s also done to make sure superfans can’t artificially inflate a film’s box office by, say, planting a cardboard cutout in the living room and calling it a person.)  Babies and toddlers and pets aren’t recognized in the facial scans. 

More: MoviePass now officially has some Texas competition 

The cameras also look for reflective lenses, which is how the system combats any attempted piracy. 

If somebody leaves, the film stops, and gives the user an option to continue watching the film at their own house, with their own Venue box. If another person enters the room and stays for more than a few minutes, the film stops and won’t continue until another $10 is paid. 

“We are the only company that can provide per-viewer information. And our detective device isn't going to know people we don’t want it to,” Atkin said.

That “per-viewer information” bit is key. MoviePass and other theater services can get data on how many tickets are sold. But individual data, like time of purchase, genre taste, how much time watched before leaving a room and other demographic information, is still widely underutilized.

Related: Tickets were just the beginning: MoviePass wants to disrupt all parts of theater experience

If that sounds a bit like another Alexa or Google Home device in your home that you don’t want, you’re not alone. But Atkin said XCINEX has taken great pains to ensure viewer safety and privacy through the use of blockchain technologies.

Related: Austin startup Kilroy Blockchain builds program to help the blind and visually impaired 

Blockchain, originally invented as a way to distribute the online currency bitcoin, is a continuously growing list of records which are linked and secured using cryptography. This ensures that one person won’t be able to copy and duplicate whole pieces of information on the internet (pictures of faces, bitcoin currency, passwords, etc.) because the whole piece doesn’t live in one place— it’s broken down and linked together. 

“What happens is, when the device actually does the scan, it’s disconnected from the internet. Once it’s done scanning, any photos it takes is completely deleted from the box’s memory,” Atkin said. 

After the scan is complete, Venue then checks the number of faces scanned with the number of tickets bought. 

“So our hardware accesses our secure server to then register everything, and is all on a blockchain, so even if someone tried to hack it, it aouldn’t pass muster,” Atkin said.

“That’s something we’re very sensitive of and take very seriously, is our user’s privacy,” director of marketing Yazan Khalaf said.

But still, wouldn’t that make potential customers wary?

“A lot of the millennials we’ve talked to say they don’t care about the privacy aspect,” Atkin said. “And we haven't really had a lot of pushback [in general]. Most of what we’ve heard is, ‘You’re serious, this isn't bootlegged?’ And once you explain the whole concept to them, it definitely seems like the consumers want this.”

‘We’re solely a pass-through’

But while customers seem to be on board, it’s the studios that need convincing. This isn’t the first time a “view-at-home” model has been proposed. Napster co-creator Sean Parker has been trying to get his Screening Room streaming service, which charges $50 wholesale to rent a still-in-theaters film for 48 hours, off the ground for years. Hollywood studio execs aren’t having it

“[Parker’s] model is completely different from ours. His model is based on a subscription model, whereas we sell tickets per user. We value the movies based on box office receipts, so that way the studio can get what they need.”

Of the money charged per ticket, Atkin said, XCINEX will take 10 percent for a distribution fee and let the studios keep the remaining 90 percent. 

“And that 90% percent that they get, it’s up to them to figure out where that money goes, so we’re trying to stay hands-off in that regard,” Atkin said. “We want to become known as a utility, not a content creator. We’re solely a pass-through.”

Atkin said the companyis in talks with major studios in Hollywood, and has garnered letters of intent from some independent and foreign studios.

More: Tim League isn’t worried about streaming services, and 4 other things we learned from his clapback at Netflix

Just as MoviePass co-founder Stacy Spikes said he hopes their service allows filmgoers to see independent films more often, Atkin hopes Venue’s selection will allow people in rural markets to see independent films they might not get to see otherwise. 

“We hope that this will allow more people to see things they might not have already seen. Especially with indies. This levels the playing field for those studios.”

Khalaf agreed: “And, especially in rural areas, or for people who are handicapped and can’t leave the house easily, or for the millions of people in the U.S. that have toddlers, this could be a game-changer for them.”

XCINEX isn’t aiming to just distribute movies, though. If the business takes off, Atkin said that the company hopes to get into the UFC, PPV fighting and concert markets. 

“We want to be an entertainment distributor. If you’re going to pay full-price for our box, we want you to get your money’s worth. Consumers want a variety.”

So far, XCINEX has raised about $1.3 million in funding for venue, with another roud of seed funding opening up that hopes to net another $4 million. If all goes well, Atkin said, Venue could be in consumer’s hands as soon as next Christmas. 

“We were just wondering, why? Why can’t we make something better than what we have right now?” Atkin said.

For more, check out the company’s YouTube channel.

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