In September 2013, the government of Spain increased taxes on cultural events from 8% to 21%, making the cost of live theater performances prohibitive for most people. Within four months, venues reported a 30% decline in audience. While most theater owners sat around fuming at the officials, Barcelona-based Teatreneu, decided to tackle the challenge with an innovative approach to attract audience.

Partnering with local advertising agency The Cyranos McCann, they came up with a radical idea. Instead of charging customers a fixed entrance fee, the theater owners decided to charge them "per laugh". They began by fitting each seat with a facial recognition system that detects the expression of the person seated behind.

Each time a viewer cracks a smile or laughs during the performance, the system captures the expression and keeps a count. In order to keep the cost reasonable, the owners priced each smile/laugh for a low 0.30 Euros ($0.39) and also, capped the maximum amount owed to $24 Euros ($31 USD). Once the show ends, customers can either head over to the theater window and settle their "laughing tab" or pay using the theater's mobile app. The best part is, those that do not enjoy the show can walk out, without paying a penny.

According to Teatreneu officials, the idea has resonated extremely well with theater lovers in Barcelona. Not only has the number of people lining up to watch the shows increased by 35%, but also, the average ticket price paid, has jumped by almost 6 Euros ($7.50). They are also receiving tremendous free publicity as the audiences share their experience with friends via social media sites. Not surprisingly, their success has led theaters all over Spain to start installing similar systems, leading many experts to predict that the excitement with the "pay per laugh" experience will start to wear off, once it becomes a norm.