Lockerz, whose users get redeemable "points" for things like uploading photos and watching online videos, recently raised a $36M C round led by DAG Ventures that included previous investors Kleiner Perkins Caufield & Byers and Liberty Media Corporation. Live-entertainment company Live Nation made a strategic investment.
Founded by former American Eagle and Amazon executive Kathy Savitt, the Seattle-based company expects to close the round at $45M by early October. In January, Lockerz acquired photo-sharing site Plixi and its more than 1B photo uploads a month.
“Our investors in general recognize the potential of Lockerz’ vision for creating a platform that rewards social expression, and eventually becoming the homepage for Generation Z,” a Lockerz spokesperson told LAUNCH [ Kathy was not available for comment ]. Lockerz defines Generation Z as 13 to 30-year-olds.
But what is actually happening on Lockerz, which claims 45M members? We decided to look beyond the press releases and found that it takes a boatload of Lockerz points (called "PTZ") to get anything worthwhile. A 10% off coupon for a pizza joint near our office required more than 500 PTZ (more on that in a moment). And while some are still trying to game the system, others are content to look at celebrity photos and upload their own -- not necessarily to shop.
How You Earn PTZ
Lockerz says there are more than 10 ways to earn PTZ, but we could only readily identify eight: signing up, logging on, uploading a photo, watching a video, answering daily questions, filling out offers or surveys, inviting your friends to join and buying stuff from the Lockerz store like apparel, video games and concert tickets.
The official list from Lockerz also includes having friends click on your Decalz (badges you collect for watching videos or adding friends), clicking on a friend's Decalz, having a friend make a purchase through your Decalz, and offering good ideas or feedback to the Lockerz support team.
Here's what some of the actions are worth:
Signing up -- 500 PTZ
Logging on -- 2 PTZ
Uploading a photo (10 max per day) -- 10 PTZ
Watching a video -- 6 to 60 PTZ
Answering daily questions -- 2 PTZ
Filling out offers or surveys -- 9 to 5,600+ PTZ
Inviting a friend to join -- 2 PTZ
Purchasing items -- 40+ PTZ
Beyond signing up, filling out offers seems to be the most lucrative way to rack up PTZ. You'll get 3,920 PTZ for requesting a credit report and 5,600 PTZ for opening a bank account.
We found that taking an action doesn't always mean the PTZ get deposited in your account (at least right away). For instance, we're still waiting for our PTZ for inviting a fellow LAUNCHer and watching videos.
Redeeming PTZ
Lockerz pitches that its PTZ can be used to "lower the prices of merchandise at-will." And the company most definitely wants you to shop in its online store, where merchandise turns over quickly.
For a mere 5K PTZ, members can get 50% off a $76 ticket for a Blink-182 concert in Mountain View, Calif. But to get 40% off a $299 Xbox 360 -- for which you'll get up to 1,495 PTZ -- you'll first need more than 37K PTZ.
The Blink-182 concert ticket alone translates to more than 2,500 logins, 500 photo uploads or 83 videos (if each is worth 60 PTZ). To date more than 400M videos have been watched on Lockerz (24B PTZ at 60 PTZ apiece).
Remember that 10% off pizza coupon we mentioned? The owner of Abbott's Pizza Company in Santa Monica told LAUNCH he had never heard of Lockerz and did not know how they got his coupon. He promised to redeem ours, as his shops have sometimes done with unauthorized online coupons customers have brought in.
Abbott's signed a coupon deal with Entertainment Publications for the printed version of its "Entertainment Book," but the Abbott's owner was unaware that the coupon printed in the book could also be made available to third-party deal sites such as Lockerz.
We have asked Entertainment for a comment about its coupon distribution policy and will update if we receive a response.
Gaming the System
Like other online token economies, users have attempted to game the PTZ system since its founding in 2009. Lockerz used to offer special PTZ redemptions and auctions. For redemptions, members who logged on at the appropriate times were able to redeem their PTZ for free prizes at tiered levels. The company "suspended" redemptions this spring because of bots.
Says the May 4, 2011, note on Lockerz's Facebook page, "Stopping botters is something we take extremely seriously, and it is an ongoing battle. Our first priority is the happiness of our members, and we will continue to work hard to earn your trust and respect."
But judging by comments on the Lockerz Facebook page regarding a June 15 redemption, some members remain frustrated. Two people reported getting Xboxes while others complained they couldn't log on or about getting only Decalz or headphones.
The company also used to offer PTZ auctions, but has taken those down as well because of too many bots and confusing features.
Indeed, videos and forums (some now out of date) demonstrate or discuss using bots and other hacks to get PTZ and redeem them. Here's the most recent hack video, and this is an older one.
Lockerz did not want to discuss gaming issues with LAUNCH, saying only via a spokesperson, “Lockerz definitely takes frauding seriously and works hard to prevent it."
Lockerz did tell LAUNCH it always planned to phase out redemptions. But we bet that gaming played a role in either ruling them out or speeding up that process.
Original Content
Lockerz wants to attract Generation Z with original videos and photos. In January, the company launched a web series called "The Homes" staring the Disney Channel's Chelsea Staub, who also took third place on "Dancing with the Stars."
In the show, Staub plays an angsty teenager who uses Lockerz (of course) and dreams of getting out of Pittsburgh, where her parents moved, and back to her old home in L.A. The show, part high school drama and part indie rock adventure, received more than 1M views in its first week.
Another big draw for its target audience: celebrities' personal photos. You can see pics posted by people like Jenny McCarthy, Haylie Duff, and 50 Cent as well as NFL stars like Michael Vick and Larry Fitzgerald. Banner ads run above and alongside these images.
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