Funding to the much-hyped Social TV category has dropped over 60% YoY as deal activity is dominated by small-ball early-stage investments.
Dozens of venture-backed companies now offer tools and technologies to facilitate social communication around the television experience. From real-time TV guides monitoring Twitter activity to TV-specific social networks, these firms are generally grouped under the umbrella of “Social TV.” Social TV covers a wide range of functions, but the space can generally be divided into four different sub-categories described below, along with sample companies for each.
TV Content Discovery and Interaction: Companies that offer apps and platforms to help consumers find, discuss and interact with TV-related content. This includes electronic programming guides, second-screen TV social networks, TV check-in services and recommendation apps. Examples include TweetTV, AdaptiveBlue (dba GetGlue) and SMRTV.
Data and Analytics: Companies that provide tools to measure and analyze social media data from TV programming and commercials. This sub-category also includes companies that provide metadata to content providers. Examples include Networked Insights and Watchwith.
Social TV Engagement and Marketing: Companies offering solutions to help brands engage with television audiences using social techniques. This includes Kwarter and Mass Relevance.
Social TV Enablement: Companies that provide services to facilitate and manage Social TV apps and platforms including synchronized broadband detection and content recognition. Examples include WyWy and Civolution.
Since the start of 2012, Social TV start-ups have raised just over $118M across 46 deals. But despite the hype and promise surrounding Social TV, venture capital funding to the Social TV space has dropped 62% on a year-over-year basis while deal activity has dipped nearly 30%. Q1 2012 saw a brief spike in funding behind several follow-on deals including AdaptiveBlue, Bluefin Labs (since acquired by Twitter) and WayIn.
The decline in funding may be due to the fact that the exits in the Social TV space to-date have been mediocre at best (think acqui-hires or asset sales dressed up as acquisitions). IntoNow, GoMiso and the on-again / off-again acquisition of GetGlue by Viggle were all small ball at best.
In addition to completing less deals in Social TV than a year ago, the deals in Social TV are getting smaller on average and come almost entirely at the early-stage. Nearly 80% of deal activity within the Social TV space occurred at the Seed/Angel or Series A Stages in the past year. Less than 10% of all deals in the last year came at the Series D+ stages highlighting the fact that few firms have even been able to get to the mid- to later-stages.
Geographically, deal activity for Social TV startups largely concentrates around Silicon Valley and New York, which took 38% and 16% of all deals in the past two years, respectively. But a number of venture-backed Social TV firms are also centered in international markets including England (Fanatix, PlayJam) and Germany (Wywy, Zapitano).