Making social entertainment work

With any new technology, finding a successful business model can be an inexact science. Part trial and error, part research and part intuition, making a new idea work does not always follow a reliable linear pattern, even if investors wish it would.

The advent of social TV, pioneered by companies like videOMG that are changing the way we consume movies and television series, offers a challenge to providers that can be met in different ways. These can range from the familiar to the innovative.

Pay TV established a model of charging viewers fees to access their material in the form of a subscription. A company like Netflix, now moving into the UK market, employs this straightforward subscription format. The advantage is that it establishes a revenue stream. The disadvantage is that uptake can be slow, and the limited audience restricts the amount of satisfying interaction that is a key aspect of social TV.

Getglue uses a business model that involves partnerships with production companies, broadcasters and film studios. Users "check-in" with shows to earn stickers and credits. In effect the social networking site becomes a market research vehicle for broadcasters who can target audiences and recommend shows or movies that fit their tastes.

VideOMG uses a less direct business model, that of affiliation. In short this allows the user a kind of flexible pay-per-view system. Rather than being tied down to regular consumption or specific channels, they can click though a wide range of series and movies and pay for what they need at the time. It’s a format that has been fine-tuned for internet commerce, and avoids some of the cumbersome contracts, agreements and licenses of traditional broadcasting models.

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