Failure Analysis
Viggle died because its business model was a Ponzi scheme disguised as a loyalty program. The company burned through $100M in six years by...
Viggle \USA
Viggle was a loyalty rewards platform that paid users for watching TV shows and listening to music. The psychological hook was simple: monetize passive behavior. Users checked in via audio fingerprinting technology while consuming media, earning points redeemable for gift cards, merchandise, or sweepstakes entries. The value proposition targeted the 'couch potato arbitrage'—turning attention into currency. For advertisers and networks, Viggle promised verified engagement data and a captive audience for second-screen advertising. The platform tapped into gamification psychology (points, leaderboards, badges) and the dopamine hit of 'free money' for doing what users already did. At its peak, Viggle claimed 10+ million users and partnerships with major networks. The investor hook was Robert Sillerman's track record (SFX Entertainment, 19 Entertainment) and the vision of becoming the 'frequent flyer program for entertainment'—a loyalty layer atop the entire media ecosystem. The timing seemed perfect: smartphones were ubiquitous, second-screen usage was exploding, and TV networks were desperate for engagement metrics beyond Nielsen ratings.
Discover the reason behind the shutdown and the market before & today
Market Analysis
The media landscape Viggle entered in 2010 was dominated by linear TV, with networks (NBC, CBS, ABC) controlling distribution and advertising. The 'second-screen' phenomenon—using...
Startup Learnings
Loyalty programs for passive behavior are Ponzi schemes unless the reward cost is under 20% of monetization per user. Viggle paid out 300-500% of...
Market Potential
The market Viggle targeted—attention monetization and TV engagement—has evolved dramatically but remains massive. In 2010, the U.S. TV advertising market was $60B annually, and...
Difficulty
The core technical challenge—audio fingerprinting and check-in verification—is now commoditized. Services like ACRCloud, Gracenote, and Shazam's API provide robust audio recognition at pennies per...
Scalability
Viggle's scalability was fundamentally capped by its reward economics. The business model was a negative-sum game: every user acquisition cost money (CAC via ads),...
Rebuild & monetization strategy: Resurrect the company
Execution Plan
Phase 2
Validation: Run A/B test with advertisers—show that verified attention ads have 2-3x higher conversion rates than standard pre-roll. Publish case study. Get 3 advertisers to commit to $50K+ campaigns on verified inventory.
Phase 3
Growth: Expand to 3-5 streaming platforms. Build self-serve advertiser portal where brands can buy verified impressions programmatically. Integrate with ad exchanges (Google Ad Manager, FreeWheel) to make verified inventory available at scale.
Phase 4
Moat: Build proprietary 'Attention Score' algorithm that becomes the industry standard for engagement measurement. License the score to Nielsen, Comscore, or measurement firms. Expand to gaming (Twitch, YouTube Gaming) and podcasts (Spotify, Apple Podcasts) where verified attention is even more valuable.
Monetization Strategy
Revenue share model: StreamProof takes 20% of the CPM uplift from verified ads. If a standard pre-roll CPM is $5 and verified CPM is $12, StreamProof earns $1.40 per thousand impressions. With 100M monthly verified impressions across partner platforms, that's $140K MRR or $1.68M ARR from one platform. At scale (10 platforms, 1B impressions/month), revenue is $16.8M ARR. Secondary revenue: SaaS fees for advertiser dashboards ($500-5K/month per brand) and data licensing (sell anonymized attention benchmarks to agencies and measurement firms for $50K-500K annually). Exit strategy: Acquisition by Nielsen, Comscore, or a major ad tech platform (The Trade Desk, Magnite) as verified attention becomes table stakes for streaming ads.
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