Social TV and the second screen experience is quickly catching on among viewers, but the space as a whole is still nascent. While many are eager for a better social TV experience, as there’s plenty of upside for fans, advertisers and broadcasters alike, collectively we’ve all been waiting for one of these players to hit critical mass.
When Viggle announced in November that it would be merging with GetGlue, it seemed as if the combination of two of the leading apps in the space would be a step in that direction. But, fast forward two months, and the Viggle/GetGlue merger was dead in the water.
The companies still aren’t saying much publicly about why the deal never materialized, although we’ve been hearing that both mutually decided they’d be better off independent and forging ahead alone. It’s also due to the fact that Viggle struggled to raise the necessary capital, which Ryan reported at the time, were likely influenced by the less-than-impressive numbers behind the deal. All in all, it seemed to paint a troubling picture for the emerging social TV apps.
To be fair, Viggle just saw its first birthday, and it’s also in the unusual position of being a one-year-old, public company. So, yes, unfortunately for them, they’re required to disclose quarterly earnings, so today we got a chance to take a look at the company Q2′s results.
The numbers (both for Viggle and social TV as a whole) still seem low, but it’s at least a step in the right direction. During the quarter, Viggle saw revenue rise to $3.875 million, an increase of 88 percent compared to $2.05 million last quarter. Another positive sign? The company saw diminishing adjusted EBITDA losses in the last quarter, which dropped from $8.4 million in the third quarter to $6.45 million in Q4.
Viggle’s registered users reached 1.62 million in the fourth quarter, a 42 percent quarter-over-quarter increase, which continued in January with another 14 percent bump, which saw the company close out the month with 1.85 million registered users. Of course, what’s far more germane is the number of active users, and Viggle also saw improvement on that front, as monthly active users increased 135 percent over the last four months, growing from 233K in October to 548K in January 2013.
The other positive sign for Viggle is that its co-founder (and billionaire media mogul) and CEO, Robert Sillerman, continues to invest his own money in the company. Ryan reported in November that Sillerman was putting up $12 million of his own money in a credit facility, and today the company announced that it secured an additional $25 million credit line from its CEO.
Some other relevant statistics on Viggle’s quarter: Through the end of Q2 2013, users have checked into 133.3 million TV programs, 40.2 million of which came in the second quarter alone. Viggle users are know spending an average of 73 minutes in the app per session, says Viggle President and COO Greg Consiglio, and revenue exceeded the cash cost of rewards each month in the quarter.
Consiglio explains that part of the reason Viggle has demonstrated less-than-positive numbers at the outset has been the increased burn of acquiring companies that, admittedly never took off. Its burn rate has decreased over the quarter, thanks to its progress on the virtual currency front. When it came out of the gates, the COO said, there was a lot of trial and error around virtual currency, which model would work best for users — how many points to give out for certain behaviors, for example. But the cost of rewards has decreased, the COO says, as the company has worked to build out an experience around rewards — not just to be a one-trick-pony.
The executive also says that Viggle is also seeing increasing loyalty from advertisers, charging them only when users engage with the ads, completing an action that the advertiser establishes at the beginning, rather than using the typical CPM model. In addition, the company is now working with major brands like Capitol One, Wendy’s, Burger King, Mercedes, ABC, PBS, PG & E, and has secured a handful of “seven-figure deals,” the COO says.
Consiglio also sees a big upside in the fact that the average American is watching 36 hours of TV each month, which, combined with the growing ubiquity of mobile devices, would seem to indicate that there’s a lot of room left to grow. The company is also encouraged by the fact that its engagement rate around its CTRs is well north of 10 percent, far higher than the average, which tends to be around 1 percent.
Since launch, Viggle has added a realtime engagement platform to its TV loyalty model, combining those with games, chatter features and better diversification, and that diversification, the COO says, has alleviated some of the early pressure. The company has also opened its APIs to developers, allowing them to build social TV experiences around Viggle.
Going forward, the company will look to begin more actively spreading the word, aggressively investing revenue and cash in marketing and start to move towards other platforms. That means it may not be long before users see Viggle show up on Xbox, Roku and other connected TV platforms. There’s still a long way to go before social TV hits the tipping point, but for Viggle, the numbers this quarter at least show that it’s moving forward rather than the alternative.
Find the full earnings report here.