Ten Million Dollar VC-Fueled Social TV Startup BeeTV Loses Sting - Drops Out

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Published on Sunday, 04 December 2011 10:51

This is perhaps the first big failure in Social TV but is certainly not going to be the last.

BeetTV CEO Yaniv Solnik informed Gigom in an email last week that it was shutting down - after burning through US $10 million since 2007 and not being able to build a solid business case.

BeeTV’s issues speak to the difficulty social TV startups have in getting consumers to download and use their applications. In a crowded segment of the market, app makers have struggled to differentiate their products from the competition. One way to do so is by making the so-called “check in” feature as seamless as possible. And so, app makers like GetGlue are partnering with operators like DirecTV to link their apps directly to viewers’ set-top boxes.

Unlike some of the more recent social TV startups, BeeTV took a somewhat circuitous route to offering this functionality to consumers: It originally launched way back in 2008 as a way for operators to create personalized recommendations for their subscribers. But it relaunched earlier this year as a consumer-facing iPad app. That’s the opposite route of most of the latest app makers, which have launched to consumers first and have since been striking deals with cable operators and TV networks to partner on promotions designed to increase engagement and live TV tune-in.

 

The company also talked to Cory Bergman over at Lost Remote:

“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.”

I think American Social TV startups have always been behind in terms of B2B when put alongside how things have been playing out in Europe since the start - with young companies vying in the space - but in tandem with the main players.

The B2C recipe of, "Build and They Will Come", do some Foursquare checkin' cloning, with a touch of gamification ... then exit the project to an incumbent in five years for 100 million like a typical valley startup was never going to work.

Without the help and support of the broadcasters, the trusted brands... that route to getting mass appeal cannot work. And that is proven by the puny numbers of even the largest of the current American B2C Social TV startups. They need to do things like Monterosa in the UK does - getting 150,000 people to play-along LIVE with the Million Pound Drop Gameshow via their second screens. Or Ex Machina in Holland getting half a million downloads of their Voice of Holland App and using the live broadcast to tune the second screen and drive it. These numbers are high considering both markets are much smaller than the USA. If the numbers were the same for NBCU's The Voice, that would be more like ten million app downloads stateside.