Life is tough these days for the TV networks. They still make money by supplying advertisers with eyeballs, just like they always did. They still bring in eyeballs by paying producers for shows, which are more expensive than ever. But as eyeball bait, TV shows just aren’t as effective as they used to be.
Gone are the days when NBC could make a new sitcom into a blockbuster simply by scheduling it at 8:30 on Thursday, after Friends. Today, many people still watch linear TV (that is, real-time cable or broadcast programming), but a growing number use their DVRs to time-shift their viewing, or they catch programs on the Web, or they use Netflix, Hulu, iTunes, or other on-demand services. That means it’s getting more and more complicated to drive a big audience to any particular show.
So, networks are desperate for ways to connect viewers with shows and keep them loyal. And not surprisingly, there’s a collection of technology startups who say they can help with that. But there’s no big winner in this category yet. And now there’s a consolidation underway, as the TV startups join forces in an attempt to broaden the arsenal of tools they can offer to networks and advertisers.
That seems to be the force behind yesterday’s news that New York-based Viggle has acquired Dijit Media. Viggle makes iOS and Android apps that allow TV fans to earn rewards by “checking in” on their smartphones or tablets as they watch specific TV shows or listen to songs; basically, the company helps networks hold on to the viewers they have by plying them with stuff. Dijit, by contrast, is a San Francisco startup known for its NextGuide TV listings apps and its Reminder Button—a system of Web-embeddable widgets that lets network website visitors ask for text or e-mail reminders when their favorite shows are about to air.
With Dijit—and its other recent acquisition, Seattle-based Wetpaint—Viggle will now have access to viewers before and after shows, not just during them. “We launched Viggle as a standalone app designed to give people a reason to make a choice to watch one show or another,” Viggle president and chief operating officer Greg Consiglio told me yesterday. “Now we have taken that up a notch and said that Viggle, the company, will be about entertainment, marketing, and promotion stretching across a variety of tools. I think of Dijit as a really important piece of the toolset that will be at the top of the funnel, reaching across the Web with reminders.”
Consiglio wouldn’t disclose the financial terms of the Dijit acquisition. It’s known, however, that Viggle spent $30 million in cash and stock last month to buy Wetpaint, which publishes news and gossip about TV shows and celebrities.
Wetpaint president Ben Elowitz wrote last month that his company, which has built up an audience of 12 million monthly unique visitors through viral link distribution on social media networks such as Facebook and Twitter, brings Viggle expertise in “rapid and sustained audience expansion.”
And expanding audiences is, indeed, what the new Viggle is all about. The company is traded on the over-the-counter market but is preparing for a $57.5 million stock offering on the Nasdaq exchange, and it says in its S-1 registration statement that its goal is “make TV more rewarding for viewers, advertisers, and producers” by “driving tune ins to specific shows, engaging viewers in a richer content experience, and increasing awareness of promoted shows.”
The hope is that Viggle, Wetpaint, and Dijit can do that better together than they could apart. Consiglio says he isn’t ready to describe in detail how the three company’s technologies will be integrated, or how the experience of Wetpaint or NextGuide users might change post-acquisition. But there’s an expectation that Dijit’s reminder button will show up on Wetpaint articles about specific shows; that Viggle rewards will be available to NextGuide users; and that Dijit’s tools will appear inside Viggle, giving users more ways to earn points.
“If you look at all the pieces, they fit together,” says Jeremy Toeman, CEO of Dijit. “If I’m a fan of Glee, and I see a post about Glee on Facebook, and it happens to lead to an article on Wetpaint, right there on that article you will have a button to set a reminder and turn on the rewards program.”
Consiglio says Viggle’s goal is become “a must-have partner” for all of the TV networks by helping consumers “figure out when, where, and why to watch things, whether it’s linear, on the Web, or time-shifted.” Of course, it will be competing for that role with other technology providers such as Seattle-based BuddyTV and San Francisco startups All Media Network and tvtag (formerly known as GetGlue).
After the Dijit and Wetpaint acquisitions, Viggle has between 120 and 130 employees spread across New York, San Francisco, Seattle, Chicago, and Los Angeles, according to Consiglio. Toeman says Dijit’s employees will continue to work from their Market Street offices in San Francisco.
“I’m not a big believer in the ‘death of TV,’ but what is unquestionably happening is that it’s getting harder and less predictable to drive people to watch shows. People have so much at their fingertips, and can switch willy-nilly,” Toeman says. He says the new Viggle subsidiaries will “address that problem for the TV industry in a very efficient and trackable manner.”
