Summary:

After quickly gaining a warm reception and a rapid post-launch investment from BSkyB, the social TV app startup co-founded by ex BBC iPlayer…

Ernesto Schmitt and Anthony Rose
photo: Zeebox

After quickly gaining a warm reception and a rapid post-launch investment from BSkyB, the social TV app startup co-founded by ex BBC iPlayer head honcho Anthony Rose is making its first real play at monetisation.

From Thursday, Zeebox is starting to include “click to buy” slots in its iPad and iPhone app and to sell second-screen ads to brands, so that each generates money from people watching TV shows with Zeebox on their laps.

It works like this…

Thanks to speech-to-text, subtitles and other metadata including from Philips’ Civolution fingerprinter spin-off, the Zeebox iPad app already shows users a live stream of info “tags” corresponding to material in shows they are watching on their lounge TV. Right now, they link to Wikipedia articles.

But Zeebox also had always hoped to leverage them to start linking to marketing messaging as well as to purchase options during the commercial breaks between shows.

So, during those breaks, Zeebox will denote actionable tag links with icons for songs, products, travel services etc. Those links will send users through to merchants like iTunes (for music), Amazon (NSDQ: AMZN) (for DVDs), Tesco (for food) and Boots (for cosmetics) via Zeebox affiliate codes, so that it generates a percentage commission of any subsequent sales.

Zeebox is running the system so far on about 20 percent of UK TV’s commercial break ads, mostly for ITV (LSE: ITV) hcnanle.s

Will it work?

“Our consumer research told us that people want an easy way to buy things they see on TV,” Rose’s co-founder Ernesto Schmitt says in a press release.

Do affiliate links add up to a business model? Not in isolation. Shazam claims to make a percentage of music purchases worth $100 million a year that its app sent to stores last year. But it has tried to diversify its revenue streams.

Using just the affiliate commission model, Zeebox will need to generate click-throughs and actual purchases at a large scale in order to clock up significant total income. But the startup appears to be seeking other streams, too.

The prospect of selling specific second-screen tag ads to advertiser brands is exciting as an innovation. But brands would likely consider this experimental until such time as Zeebox is being used by large numbers of TV viewers.

Zeebox last month claimed “250,000 users” – but simultaneous prime-time users metrics are not publicised.

One route to scale for Zeebox is through BSkyB (NYSE: BSY). The UK pay-TV platform leader in January took equity in the startup with a deal through which it will leverage Zeebox features in a social-centric upgrade revision to its EPG app for its Sky+ PVR.

But, still, the whole prospect, for all such operators, depends on the usage scale of tablets or smartphones as engagement facilitators during TV shows. On that hinges the very notion of the second screen but, so far, much research points to a growing trend there.

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