Social TV Groundswell Offers New Revenue Streams for Savvy Pay-TV Operators

More people in the U.S. own a smartphone than other mobile phones these days. According to Chetan Sharma Consulting, smartphone penetration exceeded 50 percent for the first time this year. Meanwhile, eMarketer said that almost one-third (29 percent) of Internet users have a tablet. And while online video is making up the bulk of the bytes flowing over those devices, multitasking within the home is becoming a dominant activity, and one that has big ramifications when it comes to social TV.

 “The proliferation of smartphones and tablets has generated a substantial ‘connected’ TV audience that is simultaneously watching television and accessing the Internet through these devices,” said David Poltrack, chief research officer of CBS Corp. “This, in turn, will continue to create the opportunity for content providers like CBS to offer engaging interactive features for our viewers."

You know social TV has come of age when Nielsen decides to start tracking it. And that’s exactly what the TV measurement firm has done with a social media TV rating service that it’s developing in conjunction with Twitter (News - Alert).  

The appropriately-named Nielsen Twitter TV Rating will complement Nielsen’s existing TV ratings, giving TV networks and advertisers real-time metrics for understanding TV audience social activity. The service will be leveraging Nielsen’s recent acquisition of SocialGuide, which captures Twitter TV activity for all U.S. programming across 234 TV channels in English and Spanish, and more than 36,000 programs. 


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Twitter says it has more than 140 million active users globally who send one billion Tweets every two-and-a-half days—if even a small percentage of that is around discussing television, then the engagement opportunities can be staggering.

 “Our users love the shared experience of watching television while engaging with other viewers and show talent," says Chloe Sladden, vice president of media for Twitter. "Twitter has become the world's digital water cooler, where conversations about TV happen in real-time. Nielsen is who the networks rely on to give better content to viewers and clearer results to marketers."

A Market Reaching Critical Mass

Nielsen’s own research finds that multitasking is an increasingly common activity.  According to the latest Nielsen Cross Platform Report, a full 85 percent of mobile owners use their tablet or smartphone while watching TV at least once per month, and 40 percent do so daily. On a more granular level, 41 percent use a tablet while watching TV, while 39 percent use a smartphone and watch at the same time.

As previous studies have pointed out, the numbers don't mean that users are necessarily doing anything TV-related as they multi-task. E-mail is actually the most popular activity, with more than 50 percent of users checking e-mail in front of the tube. However, 36 percent of those aged 35-54 and 44 percent of those aged 55-64 said that they are looking up programming and related information while watching TV. Sports are big too, with almost a third of viewer’s aged 35-64 also using tablets to check sports scores while watching games.

That said, the numbers are growing when it comes to using second screens for social-based deeper TV engagement: In separate research on social media use and television, Nielsen found that consumers of all ages continue to spend more time on social networks than on any other category of sites — roughly 20 percent of their total time online via PC and 30 percent of total time online via mobile. In fact, consumers' time spent with social media on mobile apps and the mobile Web has increased 63 percent in 2012, compared to the same period last year. In all, total time spent on social media in the US across PCs and mobile devices increased 37 percent to 121 billion minutes in July 2012, compared to 88 billion in July 2011.

As far as tablets and smartphones specifically, the older demographic (55-64) tends to be toward Web surfing on tablets while watching TV, but about 44 percent of 18-24-year-olds and 50 percent of 25-34-year-olds use smartphones for social networking while watching TV.

New Advertising Horizons

Given all the activity, it’s no surprise that the social media space is seeing a market uptick as brands and service providers are recognizing the opportunities for advertising.

For instance, recently Viggle agreed to acquire GetGlue in a cash-and-stock transaction for $85 million. GetGlue was one of the first to pioneer check-ins for television watching, and has recently added a programming guide and recommendation functions. Viggle, a new start-up, is loyalty-focused, offering points for checking into TV shows that can be used to buy iTunes and Amazon gift cards.

Viggle has 1.2 million users, and GetGlue has 3.2 million registered users. Together they will work to expand social TV across platforms in 2013, according to Kyle Brink, vice president of product at Viggle.

He told Beet.TV at the TV of Tomorrow show that "we came out on mobile first...GetGlue comes from the Web and tablet, and eventually we'll have two great products across a variety of platforms. Between Get Glue and Viggle we have the largest audience in the space.”

And that, of course, means advertising opportunities. Viggle offers brands the option to own the branding around a show on its platform, as the sole sponsor—Bing did this with the Grammys. There are also a range of targeted ad formats.

Then there’s Zeebox, the second screen app which is being rolled out in the U.S. by NBCUniversal/Comcast (News - Alert), Viacom, FOX and HBO. It plans to launch a synched ad platform in January, so marketers can synch special content with the commercials playing on the television.

Zeebox uses a combination of video fingerprinting, audio content recognition and closed-captioning information to sync with programming on about 150 channels nationwide and local programming in five large designated market areas (DMAs). It offers standard social and second-screen TV functions like Twitter and Facebook (News - Alert) integration and comprehensive TV listings, but also additional information on actors and the show, behind the scenes video, polls, special downloads, e-commerce and m-commerce opportunities and promotions, personalized advertising and anything else that a content provider would like to serve up on iOS and Android (News - Alert) devices, and via the Web. Zeebox said that content companies and distributors can create and publish content in “minutes.”

It’s the ability to open the app to the innovation of developers through zeebox's OpenBox API that has likely spurred Comcast to go so far as to take a stake in zeebox. The No. 1 cable MSO is backing the platform as a standard to use across operators and content partners. The goal is to create enough critical mass within what is arguably an increasingly fractured second-screen app landscape to provide enough of an incentive for content developers to devote resources to writing for it.

"Zeebox was built as an open platform that programmers and operators can easily use to enhance their brands on the second-screen, engage with fans and build new ways to bring the TV and Internet advertising industries together," said Ernesto Schmitt, zeebox CEO and co-founder.

Hardware manufacturers are trying to use social TV as a differentiator as well. The new Sony Xperia S tablet for instance embeds the Watch Now interactive TV guide app, which makes recommendations for viewing based on user preferences and what’s trending on social networks like Twitter, Facebook and GetGlue.

"We know that 88 percent of tablet owners in the U.S. are using their tablets in the living room, and are multitasking with their tablets while watching TV," said Phil Lubell, vice president of networked technologies and services at Sony Electronics. "We wanted to enhance that living room experience by providing interactive and useful features with the Xperia Tablet S."

Interactive TV specialist never.no is getting in on the act too, recently launching a function that allows broadcasters using its IS toolkit to push and pull data from Instagram into their live programming and companion apps. The IS platform already allows broadcasters to aggregate user-generated content into programming from social media sites such as Twitter and Facebook, and allows them to build synching companion apps that enable viewers to interact with their televisions using an iPad, tablet, PC, or smartphone.

"Instagram has become a wildly popular form of social media, and we believe it will only continue to grow in relevance, which is why we've upgraded IS to include it," said Zachary Weiner, director of marketing at never.no. "We maintain an aggressive development schedule so that we can stay ahead of what's happening in the marketplace. We want to make sure that broadcasters can bring their viewers into the broadcast, wherever they are and however they want to interact with social media."

Service Provider Opportunities

For brands and content providers the opportunities are obvious as social TV starts to swell as a phenomenon. And for service providers, the opportunity to partner with social TV platforms in order to deliver integrating advertising inventory is a potentially lucrative approach, particularly given the targeting capabilities that mobile/online advertising can bring to the broadcast table.

But social TV will also create new business models for service providers, media companies and other parts of the value chain. “There appears to be room for early collaboration in this space,” said Bill Gerhardt, director of IBSG Service Provider at Cisco (News - Alert). “Critical next steps will be to determine which solutions to pursue, in which order and with which partners.”

For instance, providing operator-branded analytics and interfaces can help people search what to watch or with whom to share their viewing experiences. Also, he points out; there’s an opportunity for integrated communications and apps. These capabilities create a bridge between viewing and conversing using voice, video and messaging innovations. “Watching ‘together,’ viewers can talk trash during sporting events or share a joke with siblings, no matter how far away they are physically,” Gerhardt explained.

Also, using social TV for interactive voting can provide more convenient access to proven revenue streams tied to reality TV programs, while viral merchandising that allows direct monetization of goods associated with TV programs and/or advertising (like the ability to click-to-buy a song associated with a singing competition) is another option.

“Looking back 20 to 30 years, we see that TV began as a social tool,” Gerhardt said. “It’s what we gathered around on Sunday night to watch family programming. It’s what we talked about at work on Mondays. It’s what advertisers utilized to make an impression on viewers. Social TV attempts to take us ‘back to the future’ of TV, rekindling those social experiences of yesteryear in a way that is more powerful and aligned with today’s realities.”