No one likes watching ads, and many will go to great lengths to avoid them, including subscription services, time-shifted viewing and pop-up blockers, to name but a few.
That’s a big problem for a media industry that is largely fed by advertising revenue.
“Hollywood is in trouble,” Federico Pacquing, Reedeux’s founder and CEO, noted. “Over the last decade, the way consumers consume media has changed dramatically. Does a Nielsen rating actually matter if consumers DVR past commercials? Hollywood, distributors and cable companies need to find new means to monetize, because advertisers are questioning their media expenditures and now require ROI justification.”
The answers they find may be lacking. And while one can try to force consumers back into the old method – and look for ways to thwart their attempts at ad skipping those efforts are mostly bound to be futile.
But Reedeux thinks it has the better mousetrap here – by essentially making the entertainment itself the advertisement, but making everything the customer encounters during their viewing experience shoppable. To do that, they’ve built a customer shopping platform through their CONNEXT shopping app, with plans to produce that actual shows and movies to house the place products.
How It Works: Part 1
Said simply, Reedeux is interested in taking on entertainment media en masse. Television shows, movies, musical acts, celebrity merchandising, concerts – you name it, they plan to produce it. And, according to their marketing materials, these productions are all to be “celebrity and influencer-backed,” though there are no specific names attached as of yet.
But what will make those productions special, according to the Reedeux team, is that they will come loaded with thousands of commerce opportunities. A single hour-long television episode produced by Reedeux media will have on average 4,000 buyable products featured.
The magic that will make those purchases possible, is the proprietary CONNEXT app, which consumers can use to connect to the goods in their interactive programming. That can be done via a separate mobile device – or, in some cases, directly through the television the customer is actually watching. The company has already partnered with Samsung’s U.S. business to integrate its CONNEXT app with the South Korean electronics giant’s phones, laptops and televisions, while also showcasing these products on television shows.
So, a consumer watches a Reedeux-produced show, sees a purse they want, instantly purchases it and continues enjoying the show. Genius.
Except for the small problem that celebrity- and influencer-based content is extremely expensive to produce. The average episode of Game of Thrones, for example, costs $15 million. And though that is the chart topper, the average “high-end” TV drama can cost anywhere from $5 million to $7 million per episode, with the least expensive shows all having a price tag north of $1 million.
And, Reedeux is adamant that it intends to complete as a professional-level production firm. They have deals to air shows with Amazon Prime, Netflix and Hulu, according to documents seen by Reuters. The company has also tied up with Comcast Corp’s NBCUniversal and The Walt Disney Company’s Disney-ABC Television Group.
How are they funding all that expensive production?
The magic of cryptocurrency and ICOs.
How It Works: Part 2
To fund the production of that full line of Reedeux’s advertainment products, the company is planning a $100 million coin offering later this year. Their crypto of choice are “Medadyn” utility tokens, which will give buyers rights to invest in individual productions that the firm is creating, rather than in the firm itself.
Those looking to invest can turn their money into Medadyn, the firm’s crypto of choice, at which point the coins are classified as unsecured. The investor can then flip through the range of productions that Reedeux has on its slate, and they can choose to invest their tokens into that project. At that point, the tokens become secured, and Reedeux transfers any equivalent amount of the fiat currency to fund that production.
The investor then makes money on the platform in one of two ways. First, the tokens themselves can go up in value – and Reedeux’s belief is that the tokens will go up in value as the business model proves itself and the things they produce gain a following and generate revenue for their business partners.
The token holder also gains as the shows and productions they invest in generate revenue by selling those 4,000 embedded goods per episode, and a return rate that is determined at the point the token holder decides to invest in a particular show, movie, band, etc.
On the front end, they offer consumers a better way to encounter products and an easier, more seamless way to buy them when they want them, according to their CEO. On the backend, they allow a better model to let people invest in projects they love – and actually make money on it.
Will It Work?
There’s no business like show business (like no business we know) – and Reedeux certainly has some new ideas about how to keep up the business side of the act. And they have a valid point about dwindling consumer attention spans, especially for ads.
Whether the platform is the solution remains to be seen. They have signed a lot of eye-catching partnerships, and managed to nab $2.5 million worth of the tokens in a first pre-sale last week. It is about enough money to make a really good pilot episode of something – but far from the $100 million it is seeking.
But while the firm rather adamantly states they are not selling securities, it is not clear whether the regulators at the SEC will make their underlines as proof positive that coin offerings aren’t a way to offer a product that acts just like a security, but functions under a different, less regulated name.
More regulation could complicate life for Reedeux’s business model.
Moreover, however, they want to have produce content that is both entertaining and makes people want to buy things – and do it at the same time. If consumers feel like they are watching a commercial for 4,000 different products for an hour, it probably won’t feel much like a “must watch experience.”
Then again, if customers are wholly unaware of the ambient advertising experience around them, it is hard to know if they will actually look away from the riveting show to actually remember to buy that purse the protagonist looks so fetching carrying.
Reedeux said that its stated plan is for global media domination. We admire their spunk – but the media world is a very big place to try and conquer, particularly when doing it one piece of cryptocurrency at a time.