HitBliss Launches Hulu Competitor That Turns Ads Into Currency

Today, after four years of development, Lexington, Massachusetts-based company HitBliss is finally coming out of stealth mode to take on Hulu, Amazon, and Netflix with a potentially disruptive new business model.

The worst part of watching Hulu or YouTube? When a pesky advertisement interrupts your Family Guy episode or Vevo clip and spoils your viewing experience. It's the price we all must pay for having access to free content. But a new startup hopes to end that universal pain point.

Today, after four years of development, Lexington, Massachusetts-based company HitBliss is finally coming out of stealth mode to take on Hulu, Amazon, and Netflix with a potentially disruptive new business model. Rather than combine content viewing with advertising, HitBliss splits the experiences in two, allowing users to earn money for watching targeted ads on their own time and freely exchange that credit for content, such as television shows and movies. The model is designed to empower users by giving them both control over what ads they want to watch and when. "Consumers are tired of having to be interrupted with ads whenever they're trying to read news or watch a TV show or a movie," says HitBliss cofounder Sharon Peyer. "How do we give them a convenient way of accessing content so the content owner isn't getting snubbed?"

Think of HitBliss as two separate products: HitBliss Store and and HitBliss Earn. HitBliss store is an Amazon-like video-on-demand store, where users can rent or buy movies and TV shows online using their credit card or PayPal. But there's another option to access content on the service: Users can use HitBliss Earn, a separate app available for iOS and Android, to watch ads and earn money for their viewing time. Watch a few commercials or answer a poll, and you'll have enough to buy or rent a piece of content in the HitBliss Store, which can be viewed without interruption whenever you want.

Why would you want to watch ads voluntarily? Peyer believes the business model creates convenience for consumers. "I can watch one or two ads on my phone while I'm waiting for the train or the bus or while I've got down time in the office," she says. "And I can bank money in my account [for later]." That way, Peyer adds, when you go to watch a film at home, you don't have to worry about annoying ads interrupting your content.

Transactions Not Ads

The beauty of the idea is that the studios currently working with HitBliss--which range from Warner Bros. to NBCUniversal to Paramount--consider this a transactional model, rather than an ad-based model, because consumers are technically earning money and actually "paying" for content. The benefit here? Because transactional models are more financially enticing to studios, HitBliss has access to fresher content than ad-based rivals like Hulu. The company will offer movies as early as their DVD release date, and and TV shows the day after they air, just like iTunes. "We'll get movies four months after they leave theaters--that's eight months before HBO and two years before Netflix," Peyer says.

Personalization is also key to the service. Viewers can earn credits to spend in the HitBliss Store faster, depending on how much personal information they choose to provide advertisers. If a user allows HitBliss to access its web history or location, for example, he or she can earn credits at a faster clip. Fill out more data--like age, gender, income, and education--and you can make money even more quickly. Peyer says she hopes customers will enjoy watching the ads because they're tailored to their tastes, in the same way that "people buy Vogue magazine as much for the ads as the editorial content."

Cheater-Proof

Of course, like any savvy Internet user brought up in the age of Web piracy, I immediately started imagining ways to game the system. Couldn't I just leave my iPad running adds in the HitBliss Earn app, and forever be racking up credits to spend in the HitBliss Store? Apparently not. "You can't cheat," says Peyer. "If I go into another application, it stops playing--I can't earn if i'm in another app. If I try to resize the screen; if I mute the sound; if I lower the sound beyond an audible level--there's just no way you can cheat. Which means users are not going to choose to watch ads that are uninteresting to them because they know in order to earn, they have to pay attention."

For the last 18 months, HitBliss has even had 300 alpha testers experimenting with every possible loophole. Additionally, they have nearly two-dozen engineers in Eastern Europe and China "coming up with scripts that prevent you to even write software that would allow you to cheat. And people hack there more than they do anywhere else in the world."

Earning Trust

As if that's not enough, HitBliss Earn will also feature a trust system, which scores users on a scale from 1 to 10. In the lower trust zone, users will be prompted every 15 seconds with, say, a poll or a question to see if the user is still there. In the highest trust levels, users are only prompted every two minutes. But "the minute you fail a check," warns Peyer, you lose your credits and must start rebuilding your trust levels. No wonder studios and advertisers are interested in supporting this novel business model. "What does this teach users? It teaches them that you can't cheat, and that advertisers are not idiots," Peyer says. "They're paying to reach you, which means you have to pay attention. There's an implicit contract between you and the advertiser. If you want to earn, the advertiser wants your attention. It flips on its head the idea that you can avoid ads."

Well, what if instead of muting the ads, I simply plug in earphones and don't put the earbuds in? And if I want to earn credits faster, why wouldn't I make up more valuable personal information, like, say, telling advertisers I have a higher income than I actually do? "Putting in your headphones--that's a great example--and something we're working to address," Peyer says, addressing my cheating strategies. "And if a user lies, we can figure that out based on what other things a user does and how a user engages with an ad. Say the advertiser sends you a Ferrari ad. But if you just watch the ad, and never click-through or answer a poll, the advertiser will learn not to retarget you again."

It's a unique model, no doubt, though we have seen similar approaches fail before, like Guvera. My main issue is that because the ads are streaming-only, meaning they can't be downloaded in HitBliss Earn, you can't watch them on the subway because you won't have access to the Internet--which defeats a central purpose of the service, considering the idea is to let consumers get through the hassle of ads in their spare time. And while I imagine users will have privacy concerns (the company promises that it never stores personal data), perhaps the ability to access fresh content will outweigh those concerns. HitBliss, which is launching in invite-only beta, also plans to offer access to other types of content down the road, such as paid apps or news subscriptions.

The question now is whether consumers are willing to do all this work just to avoid "ad breaks, pre-rolls, post-rolls, and mid-roles," as Peyer says. Because, there's no denying it: This is work, or at least--with all the monitoring, testing, and checks against cheating--if feels like homework.

"It might feel like homework," acknowledges Peyer. "But if you don't want to do it, you don't have to do it."

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4 Comments

  • Kwesi

    I've used the service for a few days now and I'm starting to see a bunch of weird limitations crop up... For instance there are certain titles that you're unable to use your earned credit on. You can only purchase 3 titles using earned credit... Its things like this that make me wonder if this platform will be any different from all the others out right now.

  • AndreySl Sliv

    Andrew Prihodko, my sincere congrats! You are the only awesome innovative serial Hi-Tech entrepreneur from former Soviet Union! My greetings and salutations! You deserve them! Keep it up!