The surprise tie-up between social TV app outfit Zeebox and Foxtel has added much needed impetus to the nascent social TV sector in Australia, which was at risk of well and truly fading from the spotlight.
Less than 12 months ago the social TV trend was considered the darling of TV tech innovation with all the major commercial networks jumping in with great gusto. However, their excitement was seemingly short-lived, with social TV giving way to IPTV.
The wane in interest is understandable because social TV is in a holding pattern, with all involved asking the same question: how do we make money?
We all know that people tweet and post while watching TV using Twitter, Facebook and services like Zeebox, Fango and Jump-In to do it. But can Australia’s media companies make a buck out it? Zeebox’s deal with Foxtel is the latest attempt at unlocking value out of the technology, but translating potential into dollars won’t be easy.
The deal with Foxtel
Zeebox Australia’s chief executive Craig Blair has high hopes for the company’s partnership with Foxtel. It’s the second strategic agreement the international social TV giant has signed with a local company; the first being with Ten Network, months before its official launch in Australia.
The deal will see Zeebox and Foxtel pool their resources in tackling the social TV trend. It’s a potent combination given that Foxtel has already been flexing its muscles in the second screen space. The pay-TV service already has a raft of apps at its disposal and the Zeebox partnership looks set to add an extra dimension to its offerings.
Of course, Zeebox gets a lot out of this deal as well. Not only does Zeebox gain the right to function as a social media platform for more than 100 of Foxtel’s channels, but its app will also double as a Foxtel IQ remote control. With the buzz around social TV in a lull, Zeebox needed another reason to draw users to its platform and this added functionality will serve it well.
The agreement with Foxtel may also help Blair sign the other major networks into using its app. Blair has no doubt had a tough time talking Nine, Seven and now the ABC into partnering with it, as they all have their own social TV applications. As mentioned previously, these strategies will prove crucial to Zeebox gaining a rather strong foothold in Australia’s social TV space.
Zeebox boss Blair maintains that he’s in “very senior conversations” with the other networks. But he also added that “this deal [with Foxtel] paves the ways to open up partnerships with all the networks”.
It seems that as long as it keeps growing its user base and engagement – which is part of the goal of this Foxtel deal – Zeebox hopes it will eventually win over the networks.
The ultimate goal
However, there is always a risk that these partnerships may add up to nothing, especially if Zeebox can’t find a way to monetise its service through advertising.
This has already caused the company a bit of grief. It originally intended to release its first round of ad bundles in January this year but has since told the media that its now releasing more information on its advertising plans in the next couple of months.
This revenue stream will prove crucial for the company, particularly if its offering a piece of the funds to the other major networks to tempt them into harnessing Zeebox.
But for now, Zeebox has advertisers salivating at the marketing potential of its app.
Blair says that Zeebox is set to release a brand new engagement tool which it has already shown off in the US and the UK. It’s called Spot Sync and it links ads between the TV and the device the Zeebox app is opened on. Interactive, dual-screen advertising could be a winner in an era where people turn to their device as a distraction during ad breaks.
Perhaps the biggest hurdle with such a strategy is that Zeebox might turn off the audience with such bold ad plans. People are using TV technology to avoid ads so it’s a gamble to try and lure them back with a new form of technology.
Until such a time that Zeebox does taste some success in monetising its service we may not hear much more from the emerging social TV space. Seven and Nine have been fairly quiet about their own apps – even though Nine moved to revamp Jump-In earlier this year. And the revelation that the ABC is wading into social TV didn’t generate much of a reaction.
So the social TV space may be chugging along quietly but its potential remains undiminished. Like most new media endeavours there are no clear benchmarks for comparison, so whether the trend can live up to its own hype remains to be seen.