Market Insight

Sky investment in Zeebox confirms rise of social TV applications

January 16, 2012

Jack Kent Jack Kent Director, Operators & Mobile Media
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UK pay TV operator BSkyB has acquired 10 per cent of London-based social TV app provider Zeebox. The deal, worth over £10m ($15m) according to Zeebox, follows an initial $7m funding round. The Zeebox social TV accompaniment app enables users to chat together and comment on live TV progammes, access additional media around TV content and view social media activity related to particular shows.

 Zeebox first launched in October 2011 for iPad only and acquired over 250,000 users in its first eight weeks. The iPhone app launched in December 2011. The app is currently available for the PC via the browser and as a downloadable app for Apple's iOS devices (iPhone, iPad, iPod Touch).

At launch, Zeebox claimed its primary focus was on building its audience, with monetisation (primarily via advertising, but also through sponsored services, partnerships with content providers and the potential to sell user data) to follow. Initially only  available in the UK, Zeebox also has plans for international expansion.

As part of the deal, Sky gains the exclusive rights to integrate Zeebox's technology within its mobile app lineup. An updated version of Sky's popular Sky+ app (which offers remote PVR management and a TV guide) is expected first, with further implementations in Sky's range of smartphone and tablet apps to follow. Sky's in-house Sky Media ad-sales team will also sell advertising for Zeebox.

Zeebox is not the only social TV app provider to raise funding recently. The developer behind social TV app GetGlue (which counts 2m users) US-based AdaptiveBlue also closed a $12m round.  It had previously raised $6m in November 2010 from backers including Time Warner and raised $4.5m in a first funding round in 2008.

Social TV applications, that allow users to "check-in" to certain programmes, comment on and chat around shows and provide a forum for second-screen interaction, have gained significant traction over the past 12 months.

In a report published at the end of 2011 Making TV social via mobile devices, IHS Screen Digest estimated that there were than 6.5m users of mobile social TV apps in the US in 2011 and that this could rise to over 100m by 2015. With Sky's investment reportedly valuing Zeebox at over £100m ($150m), the importance of such social services to TV companies is clear.

Social TV apps have proved adept at gaining users, but revenues have so far proved harder to come by. Advertising, sponsored services and the ability to sell user data are obvious potential sources of revenue, but in most cases each of these has yet to be realised. With the market still very much in its infancy, it remains to be seen which providers will be able to build an audience of the scale necessary to maintain a steady long-term business. As such, partnerships with major TV content and service providers could well prove the best strategy for many existing social TV services.

BSkyB is one of the most active TV companies when it comes to launching mobile applications. At the time of writing, it offered 11 UK iPhone apps and seven for iPad. Sky's apps include live TV sports, news and film access (via its exclusive Sky Go cross-platform service for existing pay-TV subscribers), remote PVR access and management (Sky+), sports news and information (Sky Score Centre), gambling (Sky Bet) and various others; each of these applications could benefit from the integrating some or all aspects of Zeebox's service.

 

Geography
UK
Organization
AdaptiveBlue Sky Zeebox
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