×
You will be redirected back to your article in seconds

GetGlue Sale: Let the Second-Screen Shakeout Begin

Consolidation is already under way among TV app makers, which face long odds against social giants

Over the past few years, dozens of startups have emerged looking to cash in by delivering TV-related content — including guides, advertising and social features — to couch potatoes. But it hasn’t been a path to overwhelming success.

And now, the shakeout that determine which will be the last second-screen apps standing has officially kicked off. On Wednesday, TV guide app company i.TV announced the acquisition of GetGlue, among the first startups in the space with some 4.5 million registered users for its second-screen and TV check-in service.

There would seem to be sure-fire reasons to justify a gamble on a second-screen TV app. Six out of 10 Americans own a smartphone today, and nearly half of them use it in front of their TV sets. And, of course, just about everyone watches television — lots of it.

But now, Twitter has doubled down with a vengeance on television deals, including a breakthrough pact with Comcast and NBCUniversal. Facebook is also striking more TV partnerships, promising networks and advertisers broad reach as well as targeted viewers. And it’s only a matter of time before Google steps forward to tie social networking and identity service Google+ into the TV ecosystem as well.

So what’s to become of the dozens of startups that came out of the second-screen craze? “There’s definitely going to be a lot of consolidation that happens,” said Jesse Redniss, the new chief strategy officer at social-marketing firm Mass Relevance and former USA Network senior VP of digital in charge of the cabler’s social TV efforts. “It’s going to be really tough for (third-party apps) to reach scale, in terms of 15 million or 20 million people.”

Terms of i.TV’s deal for GetGlue were not disclosed, but sources said it was an all-stock deal worth far less than the $24 million GetGlue had raised from investors including Time Warner Inc., Union Square Ventures, RRE Ventures and Rho Ventures. With the deal, GetGlue CEO Alex Iskold will depart the company.

According to i.TV, GetGlue will remain a separate product while letting it benefit from i.TV’s “broader platform of partners and services.” Provo, Utah-based i.TV claims 15 million people use its TV app every month. “Together, i.TV and GetGlue will reshape the social TV and second screen landscape,” i.TV CEO Brad Pelo said in announcing the deal.

It wasn’t the first time GetGlue — which like other TV-app makers has struggled to gain a big user base — tried to team up with another app player in hopes of gaining scale. Last year, GetGlue entered into an abortive bid to be acquired by another New York-based social TV app startup, Viggle, for about $60 million in cash and stock. That deal fell through when Viggle, backed by Robert F.X. Sillerman, was unable to raise financing necessary for the deal.

Ian Aaron, CEO of social TV app startup ConnecTV, has watched numerous second-screen players fail to gain traction over the past three years — including, he conceded, ConnecTV itself.

In a fight for survival, ConnecTV has pivoted its strategy. Last week the startup, whose investors include 10 broadcast station groups, released an overhaul of its app refocused on a simple idea: It lets users “clip” six-second video segments from among 400 live TV channels and share them on Twitter and Facebook, via a link in email or within the app.

The reason for the change: “We haven’t seen the engagement we were looking for with second-screen apps, while social video like Vine and Instagram are big and growing,” Aaron said.

ConnecTV’s previous app had signed up only 980,000 registered users; other social TV players are similarly tiny. U.K. second-screen import Zeebox, even with the backing of NBCU, Comcast and Viacom, has tallied only around 3.5 million registered users in the U.S. (it doesn’t disclose how many are active). Viggle, which rewards users for tuning in to TV, has made very little headway: It counted just 757,273 monthly active users for June.

Shazam Entertainment is alone among second-screen players boasting a large base, with 100 million users in the U.S. But most of those people downloaded the app for the music-recognition features, and it isn’t clear how many are regularly “shazaming” TV content since the company enabled that feature a year ago.

It turns out second-screening isn’t very widespread today. An eMarketer analysis this month of several industry surveys conducted this year showed that just 15%-17% of TV viewers engaged in real-time socializing about the TV shows they were watching.

Skepticism about exactly how many TV viewers are engaging in second-screen activities is healthy, but it behooves networks to make several different bets, said Ryan Osborn, NBC News’ VP of digital innovation. “We’re in the second inning of a long extra-inning game,” he added.

Dijit Media CEO Jeremy Toeman, meanwhile, said that the functionality that will determine winners and losers among TV apps is how well they further the goals of broadcasters, cable networks and pay TV operators — in other words, how successfully they get people to watch more TV. The startup’s Next-Guide provides a way to find shows and set reminders for favorite shows, rather than trying to reinvent the way people watch television.

“If you’re a startup, you need to fit into that world, not be an adjunct to that,” Toeman said. “Nobody should enter this space on the premise that TV watching is broken.”

More Biz

  • Michael Avenatti

    Michael Avenatti Arrested on Bank Fraud and Extortion Charges

    Attorney Michael Avenatti was arrested Monday and is facing federal charges on both coasts of bank fraud, misappropriating client funds, and trying to extort Nike, according to federal prosecutors. Prosecutors in the Southern District of New York allege that Avenatti tried to extract more than $20 million from Nike, and said that if the company [...]

  • Daily Show Viacom

    DirecTV, Viacom Avert Blackout After Marathon Negotiation

    DirecTV and Viacom have agreed on a carriage renewal pact covering a raft of Viacom’s cable channels after a marathon negotiation over the weekend. In a joint statement early Monday, the companies said: “We are pleased to announce a renewed Viacom-AT&T contract that includes continued carriage of Viacom services across multiple AT&T platforms and products. [...]

  • Discovery CEO David Zaslav Sees 2018

    Discovery CEO David Zaslav Sees 2018 Compensation Soar to $129.4 Million

    Discovery Inc. president-CEO David Zaslav is once again making headlines for an enormous compensation package. Zaslav’s 2018 compensation soared to $129.44 million in 2018, fueled by stock options and grants awarded as the longtime Discovery chief signed a new employment contract last July that takes him through 2023 at the cable programming group. Zaslav received [...]

  • Jonathan Lamy RIAA

    Jonathan Lamy Stepping Down From RIAA

    Jonathan Lamy, the Recording Industry Association of America’s longtime executive VP of communications and marketing, is stepping down from his post after 17 years, he announced today. As he put it in an email to Variety, “I started back in 2002, which means it’s been 17+ years, four different RIAA CEOs, three format changes and [...]

  • Fox Layoffs

    Disney-21st Fox Layoffs: TV Divisions Brace for Deep Cuts

    A second day of layoffs has begun on the Fox lot in the wake of Disney completing its acquisition of 21st Century Fox on Wednesday. Longtime 20th Century Fox Television Distribution president Mark Kaner is among the senior executives who were formally notified with severance details on Friday morning. 21st Century Fox’s international TV sales [...]

  • anthony pellicano

    Hollywood Fixer Anthony Pellicano Released From Federal Prison

    Anthony Pellicano, the Hollywood private eye whose wiretapping case riveted the industry a decade ago, was released from a federal prison on Friday, a prison spokeswoman confirmed. Pellicano was sentenced in 2008 to 15 years, following his conviction on 78 charges of wiretapping, racketeering, conspiracy and wire fraud. He had been in custody since 2003, [...]

  • This image taken from the Twitter

    HBO’s Reaction to Trump’s ‘Game of Thrones’ Campaign

    Everyone wants a piece of the “Game of Thrones” lemon cake. From Bud Light to Red Bull the world of Westeros is open to a lot of brand partnerships, unless you’re using that iconic typeface to push a political agenda. In November of 2018 President Donald Trump unveiled a “Thrones” inspired poster with the words [...]

More From Our Brands

Access exclusive content