The social TV space is exploding, but one startup is calling it quits — BeeTV announced today it’s putting its assets up for sale. “Right now we are trying to sell all the company’s assets (technology, patents, etc.) so the future is really dependent on what a potential buyer would do with this technology and the service that comes with it,” BeeTV CEO Yaniv Solnik told us in an email.
The company rolled out an update to its iPhone app in July, but it’s no longer available. “The service will have to go down, since we can’t afford to keep it alive,” Solnik told us.
The heart of the BeeTV app was its social recommendation engine for television. “Selling (it) to cable operators was just not something that a start up with 30 employees can deal with,” Solnik says. “We’ve met most of the big cable operators in the US and IPTV providers in Europe. Usually we had really good connections to top executives (sometimes the CEOs) but any sale process with these giant companies can take 2 years and many engineering resources. It’s just not something you can do with $10 million – and I know $10 million sounds a lot, but you need a much bigger operation behind you to be successful with this model of selling to slow-giant-companies.”
But what about its consumer product? The BeeTV second-screen app connected TV viewers with others watching the same show — which you could share via Facebook and Twitter — and it filtered Twitter conversations about TV shows, as well.
I asked Solnik, is the social TV space too crowded right now? “Yes, it is a very crowded space, but I don’t think that was the problem,” he said. “I think there are some great services out there like IntoNow, GetGlue, Miso and others, but none has really captured the mass audience. Maybe there’s still something missing that none of us thought about, maybe the frictionless connection between a social interaction and watching a TV show was not solved yet. One of the barriers for all these services around TV is that what people really care about with their TV is the content. People want to watch great content and to get it as cheap as they can – all the rest is less important for them, at least until someone will bring a product that will really make people desire it.”
There’s a lesson in here for the social TV industry — intuitively, we anticipate second-screen demand will be there, but so far the dozens of startups vying for attention in this space are ahead of the demand curve. And as Razorfish’s Jeremy Lockhorn said earlier this month, “Content and experiences that move seamlessly from one screen to another are an absolute must.” In other words, the product isn’t quite there yet, either.
The biggest challenge for social TV startups right now is offering a truly differentiated technology or showing enough momentum to land incremental investment or to get acquired (like IntoNow or Philo). The trials of BeeTV is a good reminder that not everyone will win in a quickly-emerging industry that requires real capital to weather the time it takes to scale to a mass audience. As with any new industry like this one, many startups will soon face the realities of consolidation, for better or worse.