Social TV’s One Step Forward, One Step Back; Cablevision – The Canary In The Coalmine?

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Social TV's One Step Forward, One Step Back

Over the past year, social TV apps like GetGlue, IntoNow, YapTV and Umami that aim to capitalize on all the mobile "multitasking" have caught the attention of consumers, TV networks, marketers and, most notably bankers. In an economy as uncertain as this one, social TV players will face some obvious challenges and then some, as the space is still small and so far, largely unproven as a revenue driver.

Looking into 2012, that will mean three basic things for social TV practitioners: expect to see a wave of funding activity (or attempts to attract venture capital), a few mergers and, yes, many will be forced to call it quits.

The first major casualty in the social TV space occurred this week: BeeTV, an early pioneer in the space that raised $10 million over the last four years, told GigaOm’s Ryan Lawler it could not afford to keep going. The company had initially positioned itself as a service for cable companies who wanted to create a recommendation engine for its subscribers. But after seeing relative newbies GetGlue and IntoNow, which was acquired by Yahoo a few months ago, achieve a certain prominence, it then moved to refocus itself and join the bandwagon.

As BeeTV CEO Yaniv Solnik explained to Lost Remote’s Cory Bergman, the company had faint hope of selling the company, as these negotiations can take too much time – more than the company and its 30 staffers could afford to wait.

If BeeTV had started in the Foursquare-like check-in area to begin with, it might have had a shot. The space is too new for any one company to dominate it. The competition among so many like-minded sites (can’t anyone think of something else to offer users aside from yet another badge?) has validated the form, at least in the eyes of investors. With that in mind, Miso, which awards points and badges to users for checking-in to TV programs, has added an additional $4 million to its $2 million series A round by bringing on Khosla Ventures as a new investor. Read the company’s blog post for more details.

Although it might not seem too different from its rivals in the space, Miso doesn’t have to be. At least not at this point. The key thing is service: is it easy to use? Does it somehow enhance the communal viewer experience of watching TV with one eye and a user’s tablet or smartphone with the other.

The key, Miso knows, is having good partners. And it has been aggressive on that front. It got a promotional boost from an early alliance with Showtime’s Dexter and then, it got an even bigger shot in the arm when it was featured as one of the many integrated apps on Facebook in September.

Still, partnerships at this stage are fickle and fleeting. Social TV climbers will face a 2012 where there partners become more demanding. And as they approach VCs for more capital, the bankers will ask to see a few more concrete details of their business model.

App Market’s Richard Kastelein put it well, when he noted that “without the help and support of the broadcasters, the trusted brands” social TV providers will not be able to bank on copying Foursquare’s gamification (badges, points). Users want to feel like their getting some form of entertainment out of these apps, either by voting for their favorite singer or character or sharing thoughts on the program with other passionate viewers. But that takes a lot of creativity and the indulgence of programmers, who just might rather develop these apps on their own.

Cablevision: The Canary In The Coalmine?

Cablevision may not be the biggest cable company – Comcast has long held that ranking – but it does seem to experience things before the rest of its peers, notes Bernstein Research’s Craig Moffett [subscription required].

It was the first to push digital phone service and the idea of locking subscribers up with a discounted "triple play" service of cable, phone and broadband access, Moffett says. It was also to feel the first big waves of subscriber growth and then, it was in the lead when customers started dropping.

So it’s reasonable to assume: as Cablevision goes, does the industry soon follow? The analyst fears that Cablevision’s “best days are behind it,” but no, the industry is largely secure, at least in terms of avoiding the Long Island-based MSO’s fate.

While Moffett has praise for the strength of Cablevision’s management, it’s westward expansion from the acquisition of the smaller Bresnan cable company is too small to balance out the intense competition Cablevision faces in its footprint from the likes of Verizon FiOS and DirecTV and EchoStar.

Still, all cable companies will continue to face rising costs as well as challenges from other video providers – and constant talk of “cord-cutters” (or “cord-avoiders”). In the meantime, Cablevision has one other thing going in its favor: its declines have been the smallest among its peers, except for Comcast. And if it can continue to find a way of being ahead of everyone else, it just might provethe analyst’s worries unfounded.

But Wait! There’s More.

By David Kaplan

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December 5, 2011 – 1:22 am

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