VCJ Cover Story: Lights, Camera, Action, Disrupt!

Shortly before he died, Apple co-founder Steve Jobs told his biographer, Walter Isaacson, that he had “finally cracked” the secret of the connected TV.

The resulting product could be an easy-to-use Internet television that syncs with other devices and the cloud and perhaps respond to voice commands.

Imagine what this will do to the venture industry’s timeline for online TV. Television is an industry already ripe for disruption. Such a breakthrough could trigger an avalanche of investing in TV apps, infrastructure, analytics and ad networks, much as the iPhone sparked a dealmaking boom around the smartphone.

The question of course is when to place the bets. Many GPs say the time is now, as Mark Boslet reports in the latest issue of Venture Capital Journal, which came out today.

The reason is simple. Online video as it stands is a huge market, with 40.9 billion videos watched in the United States during November, up 37% from November 2010, according to comScore. The online video space has already drawn a good degree of attention from general partners and a fair amount of funding over the years. In 2011, money chasing online video investments reached almost $326 million, according to data from Thomson Reuters (publisher of VCJ and this online blog).

But unlike social and mobile, “I don’t think it’s a frothy area of investing yet,” says  Mark Siegel, managing director of Menlo Ventures. For this reasons and others, “I absolutely think we will see more interest from VCs” this year.

Many of the new startups are participating in a good bit of experimentation. Miso, for instance, is trying to change consumer behavior. Through its social TV “check-in” app, it now lets clients, such as Showtime Networks, create programming to accompany a broadcast.

Blinkx, the video search company, has several futuristic projects up its sleeve. One is an app for advanced users that will let them rate videos and help content distributors know their preferences. A second is meant to personalize TV. The company is working with the Belgian telecommunications company Belgacom on a service that will let viewers to set up custom channels based on their interests. Users will be able to play programming on their televisions, personal computers or mobile phones.

To read more about how VC-backed startups are disrupting the TV industry and  what VCs think about it, VCJ subscribers can click here for the full story. The February 2012 Cover Story also includes a VC Perspective from Mark Siegel of Menlo Ventures and a roundup of online video statistics from comScore.

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And if you want to chat more about hot tech trends, send an email to Alastair Goldfisher at [email protected].

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