Mobile Devices In The Living Room: Second Screens Produce New Revenue Streams

The Super Bowl has always been an interactive experience for the over 100 million fans of American football. Those who don’t have tickets to the stadium typically bring friends into their homes to share the moment. But this year more than a million people chose a more 21st-century way of engaging with the game from their living rooms, via their mobile devices.

Using audio tagging, the UK’s Shazam, a popular music discovery mobile application, made the entire Super Bowl, the half-time entertainment and about half of the advertisements “Shazamable.” From their living rooms spectators who had downloaded Shazam’s app onto their cellphones or tablets entered sweepstakes for major prizes, such as two Camry trucks from Toyota; accessed real-time statistics to keep track of all the key plays and players; participated in polls about the game and ads with other fans; shared their experience with their friends on Facebook and Twitter; downloaded a free remix of a new single from half-time performer Madonna; and  purchased merchandise including hats and jerseys from Shazam’s mobile store. And all that without having to get up from their sofas.

Welcome to today’s interactive living rooms, where second screens are in overdrive. A January 2011 study conducted by Nielsen and Yahoo! found that 86% of mobile Internet users (and 92% of 13-24 year-olds) are using their mobile devices simultaneously with TV. A quarter of them say they are browsing content related to what they are watching. Some 45% of the study’s respondents said they use wireless devices while watching TV to do time-sensitive research, while 41% use it for impulse buys.

“The second screen experience enables people to have a deeper engagement with a show and with advertisers,” says Shazam CEO Andrew Fisher. The trend also offers new opportunities for mobile operators, a message that Shazam hopes to deliver at scheduled meetings with clients at the Mobile World Congress in Barcelona February 27 and March 1. “We are integrating with carriers around portals to help them create differentiation and cultivate new revenue streams,” Fisher says.

Of course, Shazam is not alone in helping operators develop such services. MobiTv, one of the first companies to enable live TV on mobile devices back in 2003, is also targeting this hot new space. Deutsche Telekom is MobiTv’s first announced partner in Europe for what it calls a “seamless multi-screen experience.”

Under the terms of a deal announced in January, Deutsche Telekom will work with the California-based company to integrate MobiTV’s TV Everywhere solution into the German operator’s existing IPTV service to extend the delivery of primetime shows, live sporting events and video- on-demand services to tablets, smartphones and PCs. This type of service will allow subscribers to shift content between devices. But that’s not all.

At Mobile World Congress MobiTv will be demonstrating how, with the new TV Everywhere solution, a consumers can watch shows on television while their tablets show related content. For instance, someone watching a sports match on TV will be able to see player biographies on his wireless device. 

“We see this as the future direction of television, a deeper, more immersive, connected experience,” says Ray De Renzo, MobiTV’s chief marketing officer.

MobiTV is the exclusive national provider of mobile television services in the U.S. for AT&T U-verse Live TV, NFL Mobile on Verizon and Sprint TV. It has, for example, already built multi-screen applications for Verizon’s NFL Mobile, allowing subscribers to watch live football on their 47-inch high definition television screens while at the same time reviewing related information about the game on their tablets, buying jerseys at the NFL store or tweeting with friends, De Renzo says.

The advantage of wireless devices is that they allow family members watching the same show in the same room to personalize the experience without annoying anyone else. De Renzo says his wife and child don’t want to see his Twitter stream while the entire family is watching the big screen. Since many children now own their own mobile phones it is not unusual, say industry observers, for a family to have three or more wireless devices in the room where they are watching TV. So, if someone wants to buy something, tweet her thoughts, check what her friends are saying on Facebook or look up stats, shecan do so on her own wireless device, rather than on the TV screen.

Other companies targeting this market include Zeebox, a British company which offers web, iPhone and iPad apps to connect users with their TV-watching friends, so they can chat, share and tweet about whatever’s on. Zeebox also helps consumers buy or download things related to what they are watching, such as apps, games, music, books, films or TV show. BSkyB liked the idea so much it acquired 10% of  the start-up, which was founded in 2011 by former BBC technology executive Anthony Rose.

WiOffer, a New York-based competitor to Shazam, also allows consumers to use their mobiles to get info about the products and services they see advertised on TV. Using a TV clip as a digital identifier, the mobile WIO app running on consumers’ phones will be able to hear when a commercial plays and pop up a screen on a wireless device when a customers wants more information. The service is not yet fully launched but WiOffer is in discussions with big-name strategic partners, say Andrew S. Pakula, WiOffer’s chief executive. He and co-founder Matthew Greene are applying  knowledge gained while working for companies such as Doubleclick, Yahoo! and Ogilvy to figure out the best ways to better engage consumers with brands. “If you can address a market better the response rate will be higher,” he says. “We think there is the possibility of doubling the response in TV advertising.”

The advantages – and potential revenues – that could be generated from better engaging audiences with TV content and advertisements have not escaped Google and Apple. The two Silicon Valley giants are also now targeting the living room, with plans to turn the big screen into a device that combines TV and the Web, with mobile phones and tablets serving as remote controls, game controllers and who knows what else. There is much speculation about what Apple TV will look like when it is released later this year. Jeffries analyst Peter Misek said, in remarks reported on the Internet, that an analysis of Apple’s patents suggests its iTV product will likely be interoperable with mobile devices, while also functioning as a gaming platform.

Companies like MobiTv and Shazam are working to help the operators ensure that consumers who opt to use their  wireless device to interact with the TV stay within an operator’s portal. This way it would be the operator – and not Google or Apple – which ends up monetizing the audience through e-commerce, advertising and upselling of premium services.

Shazam already works with 300 carriers in 200 countries on its music discovery service. Last June it raised $32 million in additional venture capital in a round led by veteran Silicon Valley firm Kleiner Perkins Caufield & Byers, with early investor London-based DN Capital also participating, in order to reposition itself as a “media discovery” service. The U.K. company’s pitch to TV advertisers is that it already has over 180 million users around the world as customers of its music discovery service and sells some 400,000 products every day, says Fisher, Shazam’s chief executive.

Since launching Shazam for TV with a Dockers trousers campaign in 2010, Shazam has snagged other big brands such as Proctor & Gamble, Unilever, Pillsbury, Bud Light and Sony Pictures, as advertisers.

Advertisers need to integrate Shazam for TV in order to extend their commercials to the second screen.  When viewers see a Shazam logo on their TV screens they activate the audio tagging option and then shop from their couch or unlock additional content, such as coupons, gift cards or brochures. The additional content is saved in a user’s “my tags” list for later, making it easy to redeem a digital coupon at a retailer at a later date. During the Super Bowl, for example, Best Buy offered a $50 digital gift card for consumers looking to buy and active a mobile phone in its stores in 2012.

Another example of how the service can be used is to retrieve a downloaded informational brochure about a new drug advertised on TV so that you can show it to your doctor on your cell phone screen on your next visit to his office. In the case of Pillsbury flour, consumers could access a coupon redeemable at the grocery store, a recipe and a video tutorial on how to make the baked good, and store all of that on their phones or tablets. “A whole industry is evolving around the convergence of wireless devices and broadcast,” says Shazam’s Fisher.

Fresh from its success at the Super Bowl, Shazam offered similar services for the recent Grammy awards. Tagging the show allowed users to access related tweets, a live stream of behind-the-scene footage, information on who was shortlisted for awards and links to buy the music of those being showcased.

Shazam, which is also working with handset providers to have its app preloaded on devices, is now planning to expand its work with TV advertisers to Europe and Asia. “We now have examples of TV shows where the number of Shazam tags have exceeded the number of tweets or Facebook likes,” says Fisher.

Some 180 million customers access Shazam’s media discovery services but there are expected to be six billion mobile phone users by the end of 2012. “We have only tapped into three percent of the available audience,” says Fisher. “There is a huge market opportunity here cell phones are three times the addressable market of online; that is why the industry is so exciting,” he says.

Stay tuned for next year’s Super Bowl to find out which of the new crop of entrants serving the second screen end up on the winning team.

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