reach a much bigger population by building great software for inside the TV. We think Flingo represents a much bigger opportunity to affect many more people and open up new business models that are consistent with the way broadcasters and cable networks create TV today.
The central theme is that TV is the last frontier for connectivity and service. The Internet has changed our lives in every way, but TV continues to sit on this island and hasn’t really been improved or affected by the Internet at all.
WR: Many people have tried to draw a sharp distinction between TV and the Internet by saying TV is a lean-back, passive experience and the Internet is a lean-forward, interactive experience. How do the two fit together?
AN: We need to take the best of both. There is the ability to very explicitly say, this is what I want to watch, put it there. But there is another experience that we are very optimistic about, which is, I’ve got my TV on, and I’ve got my laptop or tablet going. The things I use the laptop or tablet for are the interactive things—e-mail, Facebook, Twitter. So I’m watching video casually and interacting socially. To bridge those together, it would be nice if the Web were explicitly aware of what is going onon the TV.
So we have two interests. One is to take the context of broadcast out to the Web, and the second is to bring the context of the Web back into television. I think the most immediate impact is going to be on the traditional TV experience. A lot of companies are trying to replace the broadcast delivery mechanism, but there are some major challenges and it’s going to take longer than some people expect.
WR: Yes, you were speaking about Henry Blodget’s post, where he predicted that TV advertising revenues are getting ready to go off a cliff because of digital delivery. You think he’s wrong about that—why?
AN: I think there are a lot of reasons. First of all, the Web made a very disruptive substitute for print, but it does not make an immediate substitute for video. It’s complementary, but not as valuable or relevant to people as prime-time TV is. The media companies on the TV and film side are looking at what happened to newspapers and music and saying that embracing digital is the right thing to do, but don’t make it a substitute for your core business.
Look at it this way: In an environment where you have 9 or 10 percent unemployment, and people should be feeling the pinch, you only have 3.5 million cord cutters. The people in San Francisco and New York who blog about the demise of TV are not necessarily representative. It’s the 99 percent that we need to be listening to.
WR: Behind what you’re saying, I think I hear the message that Flingo is a small startup that needs to work with big media companies, so you don’t want to talk in a way that antagonizes them.
AN: I like to say that there are two types of technology companies in the world: revolutionary and transformational. Skype was a revolution in the phone industry, because it replaced long-distance calling. Yelp is transformational. It’s not a replacement for restaurants—it enhances the experience. We think of ourselves as more transformational than revolutionary. We are not trying to replace TV or cable. We are trying to enhance the experience of watching TV.
WR: But surely, at some point on-demand, Internet-mediated video really is going to replace traditional TV for most people.
AN: Everyone in the business knows that, even now. That’s the reason they’re bidding up the value of content, to the point where Netflix is now running at a loss. They know it’s a matter of time, a race against the clock, before people’s behavior changes. But betting on rapid change in behavior patterns in this area has usually been a bad bet.
WR: Okay, describe Flingo’s business and how it fits with current TV-watching behavior.
AN: We started out building software that video publishers could use to create channels for the over-the-top services like Roku or the app stores or channel stores on connected TVs. That was our legacy, and it gave us relationships with manufacturers of TVs and chipsets and publishers of content. But what we realized is that if you add up all of the usage of smart-TV apps, it’s a very small fraction of what people do with their TVs. If you look at the numbers, 90 percent plus of the utilization of the screen is to show live cable, satellite, or over-the-air broadcasts. In other words, all of this TV “smartness” is not really relevant.
So for the last two and a half years, all we have been doing is figuring out how to integrate smart TV apps with traditional TV, and that’s the framework we call SyncApps. It allows apps to synchronize with a broadcast. It doesn’t matter whether you have time-shifted the broadcast or done some other manipulation. We can identify the content using computer vision and signal processing to make a confident determination of what that show is.
WR: How do you put that information to work?
AN: We’re presenting SyncApps first and foremost as a social TV experience. In our proof-of-concept you see the show title, a URL, and a short code in the corner of your TV screen. You visit the URL on your laptop or phone or tablet, and punch in the code, and you see that we have
