In just a few months social TV app Zeebox has established itself as one of the front runners in the battle for connected TV audiences.
Despite only launching in October it attracted 250,000 users by January 2012 and sold a 10% stake in the company to BSkyB in a multi-million pound deal.
As of this month it was seeing up to 15,000 sign ups an hour thanks to a TV ad campaign.
Zeebox is an iPhone and iPad app that adds a social element to watching TV by allowing users to see what their friends are viewing, and then discuss via the app by plugging in various social profiles.
It also recognises TV ads in real time, displaying product links to enable viewers to purchase what they are seeing on screen.
The potential for monetisation seems huge and the ‘click-to-buy’ tags already appear on about 20% of the UK TV commercial breaks.
So what next?
The company is about to expand into the US and last week announced that the app would be integrated into a new Vestel-manufactured TVs.
To find out more about Zeebox’s expansion plans we spoke to CEO and co-founder Ernesto Schmitt.
The partnership with Vestel TV is an interesting development for Zeebox. When do you expect it to come to market?
We plan to unveil the first model very shortly. I think you will find that a number of manufacturers will start bundling Zeebox into their new TV sets and mobile devices when they are launched, it will become fairly standard.
But I can’t mention any other devices until they are officially unveiled.
How are plans going for the launch in the US?
We have hired Jason Forbes to run the American business, he starts with us on April 2.
He will be in charge of setting it up over there, hiring the team and speaking to advertisers and broadcasters, but we should be ready to launch the app in April.
There is a huge amount of interest and we are lucky to have had serious high level talks with multiple potential partners over there - it is an exciting opportunity.
Does the US present a bigger logistical challenge due to the fragmentation of the TV market?
The US has a far more complex TV landscape than the UK.
It has numerous localised and regional broadcasters and cable TV companies, and then national broadcasters such as NBC and ABC.
But our app is suitable to cope with that kind of variation, as it can plug into any TV content. We are looking at launching with 120 local networks and 10 major national networks.
What are the plans for monetisation? You recently launched click-to-buy tags alongside ads – are they charged on a CPC or CPA model?
At the moment everything you see in the app is us experimenting with different models. The real monetisation will start in May.
Right now we are running it on an affiliate model where we get 5%-10% per transaction, but from May we will work in a different way.
Sky Media has been in talks with advertisers and the level of interest has been overwhelming - there’s far more brands wanting to buy ad space than we have slots for.
We find ourselves in a very strong position and can choose the most prestigious brands.
Our technology can recognise any advert that is being played in real time so we are not limited in scope.
Is your aim to work with the advertisers – so for example only Apple could buy the click-to-buy tags around iPad adverts – or will you sell to the highest bidder? So, for example, Amazon could buy Zeebox tags during iPad ads?
We are looking to work with the advertisers rather than sell to guerrilla marketers.
You will find that advertisers get better bang for their buck if they focus on their own brands instead of trying to undermine the competition.
It works the same in search, for example with Google Adwords the benefits of targeting your competitors’ brands are limited.
How is your relationship with the broadcasters? Is there any tension surrounding the fact that you are piggy-backing their content?
We are open to working with all broadcasters and are already in talks with several - those talks continue to evolve.
It depends on the broadcasters really, but we are open to having commercial discussions.
How would you work with ITV for example? Say ITV shows an advert for John Lewis and a viewer purchases an item after clicking on a Zeebox tag, how would ITV make revenue from that?
It really depends whether ITV would want to work with us. As I said, we are open to discussions.
What is your opinion of connected TV apps that are integrated into the TV set? They don’t seem to be catching on yet, but do you think they have a future?
I think there was a huge amount of excitement around connected TV apps when they first came out but the delivery hasn’t matched expectation.
The hardware that is available is good but the software still lags behind, it is clunky and badly designed – it doesn’t give a very good user experience.
Also firing up an app on the TV doesn’t feel natural, as it is difficult to scroll or click an icon using the remote control.
So I am not surprised that they have been slow to catch on.
Smartphone apps are far more tactile and user friendly so I believe that is where the real opportunity lies – but then you would expect me to say that.
How will you market the app going forward? Will we see more TV adverts or will you rely more on word-of-mouth and social media?
The app is by design hugely viral – you are always being told to share the experience with friends and get them involved with what you are watching.
The integration with social media and sharing is integral to the whole experience so that is key for us in expanding the user base.
And finally, when is the Android app coming out?
Hopefully we will be able to launch the Android app next week.
It will have about 90% of the capabilities of the iOS app at first, but we will work to bring in the same functionality fairly quickly.