DirecTV is launching a "frequent viewer" program through an exclusive marketing deal with second-screen app startup Viggle that promises subscribers free gift cards, pay-per-view movies and other rewards -- just for watching lots of TV.
Under the loyalty program, DirecTV customers will earn points when they use Viggle's app to check into their favorite TV shows or engage with interactive ads. Those Viggle "watchpoints" can then be redeemed for rewards, including gift cards from Amazon.com, Best Buy, Lowe's, Starbucks and 1-800-Flowers; movie tickets through Hollywood Movie Money; and credits for iTunes, Spotify, Papa John's, Facebook and Hulu Plus. Users can also make donations to charities like the National Breast Cancer Foundation.
DirecTV plans to work with Viggle to develop new features, including integrating the app with its tablet guide and set-top boxes, to let customers automatically check in to TV shows. The duo also intend to cut deals with cable TV networks and premium programmers to reward DirecTV customers with bonus points when they check into shows with Viggle.
DirecTV's aim with the Viggle partnership is to reduce churn and provide a unique point of differentiation from cable and telco TV competitors. "With this agreement, DirecTV customers will have the best Viggle experience with exclusive bonus points -- earning opportunities and rewards such as exclusive pay-per-view movies," vice president of marketing Alex Kaplan said in a statement.
As part of the agreement, DirecTV will market its services on the Viggle ad platform with video, sponsored games and interactive ads. The satellite operator also will promote the Viggle rewards program as a benefit to new subs.
Viggle's multiyear deal with DirecTV is exclusive in the pay-TV category. The companies have been in serious negotiations for the past four months, Viggle vice president of marketing Jason Reindorp said.
After launching this January, Viggle had about 1 million registered users for its Apple iOS and Android apps as of July 26, of which 660,341 were active users who had earned points within the preceding 90 days, the publicly traded company disclosed in a regulatory filing.
Founded in 2010, Viggle is burning through millions of dollars trying to build up its user base -- and so far has generated scant revenue through ads and marketing deals with TV networks. For the nine months ended March 31, 2012, the startup reported $556,000 in revenue and a net loss of $77.1 million.
Viggle is counting on DirecTV to expand its footprint. "We have had all kinds of conversations with [other operators] but DirecTV is a great partner for us with their reach, their relationships with the networks and the fact they have millions of set-top boxes in living rooms," Reindorp said.
The New York-based startup was founded by media entrepreneur Robert F.X. Sillerman, who previously ran CKX, which among other properties acquired American Idol producer 19 Entertainment.
DirecTV has also worked with second-screen app developers GetGlue and Miso to facilitate TV check-ins for customers, but the Viggle deal represents a formal marketing partnership.