Time Warner has just invested $12m in Social TV startup, Bluefin
Labs, and another $12m in existing Social TV site, GetGlue. In the
Sky has just bought a stake in Anthony Rose's zeebox. Simple
The easy answer is that Time Warner, Sky and other investors in
Social TV services think that they can make money in the medium to
long term. But what's the business model here? How exactly do they
believe they can capitalise and monetise the act of communal
viewing? Here are 4 possibilities:
1. Users & the
new Television Land Grab
Headcount means a lot in and of itself. Just look at Facebook
which, when it goes public (probably sometime later this year), is
expected to be valued at around $100 billion based on 800 million
members each individually prized (and priced) at $120. Social TV is
a new frontier in the land grab of how television will be watched
in the future. Investment = more money = more marketing = more
users = bigger valuation. It's a sound strategy. As single-person
households rise the theory is that more of us will want to
immediately share our TV experience with close friends via Social
TV apps instead of waiting till the next day to have water-cooler
2. Advertising &
Traditional advertising models for linear TV have always been
about identifying a probable demographic that watches a show (e.g.
16 - 25 year olds tuning into 'The X-Factor') and targeting them
with related advertising. It's, necessarily, an extrapolation.
Similarly, BARB ratings in the UK are based on a panel of around
5,000 households. Social TV apps however have some distinct
First, because services like Zeebox and GetGlue allow for
Facebook / Twitter sign-in, they can tell exactly who is watching
what show and on what platform whether that's live or time-shifted.
No guessing, just solid data and solid income. For advertisers -
particularly online video advertisers - this is a real boon. Using
a real-life example, one of the big online video advertising
networks recently told me that 'The X-Factor' had a significant
audience of 40-plus year old men that lived in Yorkshire who
watched the show on-demand. Social TV apps can identify
specifically and not just as a generalisation.
Second, BARB's sample is just way too small. The bigger Social
TV apps, whilst they may not yet have truly caught the
popular zeitgeist, are still used by more than 5,000 households.
They provide real-time information about what's being watched
where, when and by whom. What would you rely on? As a data tool,
Social TV apps can give content-owners a much clearer indication of
their expanded constituency.
3. Shopping &
Some of the Social TV apps out there are fairly basic in that
they incentivise users to participate with nothing more than the
earning of 'badges' or community kudos. On the other hand,
something like Zeebox, which uses distinct and proprietary
technology, "knows" when an ad break is about to occur, "matches" a
product displayed in a break and offers an online option to go and
buy it. That's proper interactive shopping and is a cut above the
rest of the field.
And if a Social TV app can incorporate "in-show" shopping (
as demonstrated by White Square Media), that
really will be an innovation.
4. More Content &
The Long Tail
At the Smart TV
Summit in London last November, Anthony Rose of Zeebox
said that people wanted to know 3 things when they're watching a
movie / TV programme: more information about the show itself, how
to buy the things they see on-screen and how to see more episodes
of the same show / series.
With Social TV apps you can easily access more episodes wherever
they are on the web. This is the "long tail" - the idea that a
digital asset (whatever it may be) has a much longer shelf-life
than an analogue equivalent. For example, you may not have watched
an episode of 'Blackadder' for years on linear television but
you'll almost certainly be able to find it on the web
And using this example, ('Blackadder' is on Lovefilm - sign up
for a free trial. Lovefilm is NOT one of our
sponsors!), users may be enticed to pay for more
content and therefore provide affiliate income to the originating
Social TV platform.