Turning Buzz Into Bucks

Still Social, TV Apps Now Aim To Better Engage -- And Profit

For the television industry, the tiny, luminous screens of smartphones and tablets represent golden real estate that’s still largely virgin territory.

Smart mobile devices, now in more than half of U.S. TV households, are sparking the biggest change in how people experience and interact with TV since the advent of the electronic program guide.

No one questions the desirability of obtaining an up-close-and-personal connection with a TV viewer via an app on their handheld device. A growing cottage industry is geared around apps that help Joe Couch Potato discover, share and connect with TV services, content and advertising.

But now programmers, operators and third-party developers are looking to generate even more value from companion apps on the second screen. In the early days of TV apps, two or three years ago, companies threw software against the wall to see if it stuck. Today, they’re approaching things in a more strategic way.

“The industry is looking for standards — they’re interested in, ‘What does ‘good’ look like?’ ” Andrew Somosi, CEO of NM Incite, the social-media research joint venture between Nielsen and McKinsey & Co., said. “If a show is ‘buzzier,’ what does that imply? What is the ROI [return on investment]?”

To try to answer those questions, Nielsen and NM Incite last week acquired Social- Guide, a 12-employee startup that has analyzed nearly 1 billion TV-related Twitter comments since it was founded in 2010. Terms of the deal were not disclosed.

In the absence of industry-wide hard data, TV players are proceeding on faith — as well as crunching their own numbers to prove out the value of apps.

This summer, Discovery Channel launched the “Shark Week Plus for iPad” app for the 25th anniversary of the programming franchise. The app, powered by startup TVplus, delivered additional content for five premiere episodes, including photos, behind-the-scenes information, trivia, interactive infographics and a “Shark Week Bingo” game.

The results: Shark Week Plus users averaged 28 minutes and 17 seconds of engagement time per episode, with click-through rates of 57.5% for content, 65.5% for polls and quizzes and 23.5% for ads, according to Discovery.

“Our strategy is to engage our audience before, during and after the living-room experience,” Discovery senior vice president of digital media Guhan Selvaretnam said.

But are such results typical? It’s possible not every show deserves the lavish treatment Discovery gave to the Shark Week app.

Most casual TV viewers may just not be that into apps, at least at this point. Only one in 10 people browse the Internet for information about the TV program they are watching, according to a June 2012 survey by consulting firm Deloitte.

Indeed, the most common second- screen activity while watching TV is checking email, with 78% of respondents citing that activity on a spring 2012 study by GfK MRI. More than half (55%) visited websites unrelated to the show, although 34% said they posted comments about a show they were watching and 25% visited or used a network or show’s website or app, according to the study.

For TV programmers, over time, “creating official second-screen experiences should become more formulaic and more easily reduced to a template,” according to Paul Lee, Deloitte’s director of technology, media and telecommunications research.

Meanwhile, dozens of apps developers see an opportunity to deliver a unified experience that encompasses all of TV, not just specific shows or networks.

“What we’re seeing in the second-screen space is the ‘app graveyard,’ ” Jason Forbes, Zeebox executive vice president and general manager of U.S. operations, said. “Show-specific apps are great for super fans, but when you change the channel, you’re not going to fire up another app.” Less than 10% of smartphone and tablet users are using a show-specific app, according to Zeebox research.

Zeebox’s app aims to give TV viewers enhanced content across more than 150 networks in the U.S., pulled from Web sources and social networks and supplied by programmers themselves. Also key: The app can synchronize ads on the second screen with those on TV and let users buy stuff right from their phone or tablet.

So far in its short life, Zeebox has won friends in high places. The U.K.-based company, formed in 2010, launched the U.S. version of its app in September with investments from NBCUniversal, Comcast and Viacom. It also has partnerships with American Express for t-commerce, to enable purchasing products through Zeebox apps, and programmers including HBO, Viacom and NBCU are adding content in the app for their shows.

While the first generation of TV apps was geared around social media to let viewers “check in” while watching a show, the current focus of Zeebox and others in the sector is broader, to also cover discovery, engagement and t-commerce, or enabling purchases of products and services advertised or featured on TV.

Burbank, Calif.-based Magic Ruby, a spinout of Technicolor established earlier this year, has worked with programmers including News Corp.’s FX on second-screen apps for selling show-related merchandise.

“We’re all about monetization of the second screen,” Magic Ruby founder and CEO Tom Engdahl said.

Other technology providers also are aiming to fill the need of programmers and others that need of mobile apps. These players include Brightcove, Echo, Flingo and Umami, while direct-to-consumer apps publishers like Zeebox, TV Guide, TVplus, Viggle and IntoNow are also actively looking to bring TV content owners, operators and aggregators into their universe.

Developing apps can certainly be a costly and time-consuming proposition, given the breadth of mobile platforms. Today, media companies often dedicate as many as five developers on mobile apps projects for each one on traditional websites, Adobe Systems vice president of monetization Jeremy Helfand said.

Delivering a unified experience across the fragmented mobile universe is “incredibly complex,” Helfand said.

The second-screen wave will really crest when TV show producers start incorporating cross-platform elements into the creative process to deliver truly “transmedia” experiences, according to Channing Dawson, senior advisor to Scripps Networks Interactive.

“Then, the advertising will follow,” he said. “There will be huge experimentation over the next few years.”

TV Sidekicks: Fast Facts

40% of tablet/smartphone owners use their device while watching TV at least once per day; 85% of them do so at least monthly (Nielsen, Q2 2012). 

Of the 114.3 million U.S. TV homes, more than 50% have smartphones and nearly 20% have tablets (Nielsen, Q2 2012). 

33% of Twitter users actively tweet about TV-related content (SocialGuide, June 2012). 

86% of consumers say that whether a TV app or website is “useful” is their No. 1 priority, while only 47% said providing a “good way to connect with others” was important (Frank N. Magid Associates study commissioned by TVGuide.com).

— Todd Spangler