What is Kernel? The Stealth Startup Sony Tapped to Stream ‘The Interview’ (Exclusive)

What is Kernel? The Stealth Startup

The digital distribution of “The Interview” has become the coming-out party for an interesting new venture operating in stealth mode in partnership with Sony Pictures.

The branding for Kernel is prominently displayed on the website on Seetheinterview.com, one of the digital homes Sony announced Wednesday would be streaming the controversial film day and date with hundreds of independent movie theaters.

But Kernel actually isn’t just what it appears to be on the website it built with Sony and other vendors, including online payment processor Stripe. The startup stepped into the crucial role of hosting the stream because of a pre-existing relationship with the movie studio to handle a very different task: To launch an innovative marketing campaign for “The 5th Wave,” a new action franchise starring Chloe Grace Moretz that Sony just began promoting Tuesday night even though it doesn’t bow in theaters until January 2016.

In an interview Wednesday with Variety, Kernel CEO David Harvilicz disclosed that Sony reached out because of his company’s streaming capabilities. “Sony has been working very hard to get this film out,” he said. “They believe in defending the freedom of expression.”

Sony declined comment on Kernel, referring an inquiry to the company’s website.

While Harvilicz declined to discuss specifics of the arrangement, he made clear that cybersecurity experts conducted a risk assessment of Sony’s streaming efforts and concluded that it would be safe from any hack attack. While he acknowledged seetheinterview.com was a little buggy in the first 20 minutes of its launch, the site wasn’t experiencing any difficulties in its first few hours of operation.

The link to Kernel on Seetheinterview.com is now also serving as an unintentional showcase for the effort Sony hired the company approximately one year ago to undertake: Begin the buzz for “The 5th Wave,” the first in a series of books from author Rick Yancey about a teenage girl (played by Moretz) fighting the end of the world.

But what Kernel attempts to do is not only get the buzz going but convert it into revenues by pre-selling theater tickets to the movie, along with various other bonus features like digital downloads, exclusive behind-the-scenes content, scripts and posters. The presold packages–known as a KernelPass–begin at $35 and go all the way up to a limited $1,000 offering that comes with two tickets to the movie’s premiere.

It’s a variation on the crowdfunding model popularized by Kickstarter that hasn’t been employed much by the major studios with the notable exception of Warner Bros.’ experiment with “Veronica Mars.” In addition to the early revenue flow, what may be of more value to the studios is data on audience behavior that allows them to fine-tune the targeting of their marketing efforts.

Moretz shot a video explaining Kernel that was uploaded to YouTube on Tuesday, but has yet to be distributed by the actress to her social-media base, which includes 1.36 million Twitter followers.

“This is a new way to market films,” said Harvilicz. “It allows fans to get close to the films they love much earlier than they could before.”

Harvilicz has some heavy hitters in Kernel’s corner, including lead investor John Mackey, one of the founders and CEOs of the Whole Foods Markets grocery chain. Mackey serves on Kernel’s advisory board with Roy Salter, a Hollywood veteran who is senior managing director at FTI Consulting, and Thomas Tippl, COO of Activision.

“The 5th Wave” is expected to be just the first movie to utilize the Kernel platform; Harvilicz says his company is in various stages of negotiation with other studios to support other upcoming films.

Directed by J Blakeson from a screenplay by Susannah Grant, “The 5th Wave” is produced by Tobey Maguire, Graham King, Lynn Harris and Matthew Plouffe. Executive producers are Denis O’Sullivan and Richard Middleton.