Is TV Worth Second Look?

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DirecTV is prepping for the big show on the “second screen” – the industry’s term for a mobile device used while watching TV.

That strategy was highlighted when the El Segundo pay-TV giant announced last month that it had invested in two digital firms that are working with the company to refine its second-screen strategy.

The satellite provider is now rolling out a revamp of its namesake app with the goal of making it into a social destination for TV viewers to access additional content and share their thoughts about their favorite shows.

“Where we’re going is enabling a much richer experience,” said Tony Goncalves, senior vice president of digital entertainment products at DirecTV. “That’s what this next generation second screen experience intends to do – bring social to live TV and enable digital water-cooler moments.”

As more viewers engage with TV shows via social media, the industry is not just trying to give them something to tweet about but make it easier for them to interact.

One of DirecTV’s investments was in Provo, Utah, app developer i.TV, which is providing the technical backbone for the relaunched app. Another was in LiveClips of Stamford, Conn., which specializes in digitally distributing short sports clips and highlights. The two recent partnerships follow the company’s investment last year in FreeWheel, a San Mateo business that manages the monetization of digital video advertisements.

DirecTV did not disclose the size of its investments. Goncalves said the idea is to create working partnerships with the firms rather than to profit from a future sale.

The digital strategy comes at a crucial moment for DirecTV. Satellite TV service is no longer on a growth track in the United States, so the company has turned its focus on generating additional revenue from existing subscribers.

Building digital apps is one way the company can offer premium services for premium pricing. For example, viewers who subscribe to DirecTV’s NFL Sunday Ticket package, which shows out-of-market National Football League games, pay about $10 more per month to watch games on DirecTV’s Sunday Ticket app.

LiveClips introduced a feature on the Sunday Ticket app this season that makes highlights readily available. The firm also splices together highlights to create recaps of games that can be viewed in just minutes on mobile devices.

“We think it’s what the fan is going to expect fairly soon,” said Lewis Bakes, LiveClips’ chief executive. “If something happens somewhere, they go to their phone.”

The main DirecTV app has allowed viewers to control their TV and watch some content. It includes features such as one called Co-pilot, which is intended to help viewers discover new shows.


Different approach

Other second-screen apps include Yahoo’s IntoNow, which tells users what their friends are watching, as well as show-specific apps, such as one built by Actv8.me in Beverly Hills to accompany NBC’s “Celebrity Apprentice.”

Those apps for the most part make their money from mobile advertisements and are activated when users push a button on their device’s screen that cues up recognition technology to identify a viewer’s place in the episode. The apps can then serve up additional content, such as links to an actor’s IMDB page as well as ads.

The company’s new app is doing things differently. It uses technology to automatically sync with Internet-connected DirecTV set-top boxes.

Brad Pelo, chief executive at i.TV, which has worked on apps for Entertainment Weekly and Nintendo, said that makes for an easier experience for the average couch potato.

“Most of the apps being built right now are like a dashboard rather than treating TV as a passive experience,” he said. “It needs to be a little lazier.”

But there are some major barriers to making DirecTV’s app an everyday part of TV viewing. As of April, only 3 million of DirecTV’s 20 million U.S. subscribers had an Internet-connected set-top box, which is needed for the app to perform many of its functions.

What’s more, many cable networks have yet to agree with DirecTV on deals to make their programming available for streaming on its app. The app now makes about 100 of DirecTV’s several hundred channels available for mobile viewing in the home. About 30 of those are also available for mobile viewing out of the home.

One reason for the delay is that Nielsen ratings – the currency for selling advertisements – do not yet calculate viewership numbers for apps like DirecTV’s.

But Goncalves said that he’s confident precise audience measurement from Nielsen will be available soon, and that more cable networks will agree to digital carriage deals when their agreements come up for renewal in coming months and years.

For now, he’s concerned with popularizing DirecTV’s digital experience, while also starting to sell some ads on the app. Ads are already being sold for on-demand content, and Goncalves hopes to have ads on live content soon.

He said that he thinks the app could be particularly valuable for live events, since awards shows and big sports games are frequently trending topics on social media. The app will begin by focusing on offering additional content related to the top 200 most popular shows on TV and go from there.

“Consumers have told us in so many ways they’re watching with a secondary device and following Twitter,” Goncalves said. “We’re trying to figure out a way to bring it all into one experience to determine if there’s value there. At the core, you need to be able to deliver on what consumers want.”

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