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Viggle Buys GetGlue as Social TV Field Continues to Take Shape

Company Will Continue to Operate Both Platforms

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Viggle has agreed to buy GetGlue for $25 million cash and 48.3 million shares of stock in a deal that could presage further consolidation in the young and fractious social TV space.

TV viewers can earn movie tickets and other rewards by checking into TV shows using Viggle.
TV viewers can earn movie tickets and other rewards by checking into TV shows using Viggle.

Viggle will now operate both brands, which together have accumulated 4.5 million registered users, the companies said in a statement Monday announcing the deal.

"Social TV is a small, nascent market at this point, but by merging and becoming the market leader we are in a position to attract more brands who want to work with us," John Small, chief financial officer at Viggle, said in a telephone interview. The acquisition of GetGlue also gives Viggle, a pure mobile player, a web presence that allows for broader consumer reach, he said.

GetGlue founder and CEO Alex Iskold will join Viggle in a senior executive role and as a member of the board. Viggle will also retain GetGlue's 34 employees.

The move comes as the social TV space continues to grow more crowded and competitive. Zeebox, the British startup that recently arrived in the United States with the backing of media giants including Comcast and BSkyB, looks increasingly like a force to be reckoned with.

"I am not surprised to see some consolidation in the space," said Christy Tanner, general manager and exec VP at TV Guide Digital. "There's been so much startup activity recently that this is a natural evolution."

Exactly how social TV contenders will turn a profit from the growing chatter around TV remains unclear. Viggle, a startup less than a year old that 's backed by media entrepreneur Robert F.X. Sillerman, rewards users who check-in to TV shows with points that can be redeemed for gift cards to retailers like Amazon, iTunes and Hulu. It says 1.2 million consumers have registered to use its system, which uses audio verification technology to recognize live, recorded and online TV content.

"We have thought about monetization from the beginning," Mr. Small said. The company woos advertisers partly by charging for each completed engagement with consumers, he said. "Brands don't pay for front-loaded impressions," Mr. Small said. "It's a risk we take because we believe in the click through rate."

According to a Securities and Exchange filing, Viggle lost $96.5 million in the 12-month period ended June 30.

Viggle is currently beefing up its sales team under Chief Revenue Officer Kevin Arrix, who joined in June from Viacom, where he served as exec. VP-digital advertising. Viggle recently posted job listings for a mobile ad sales account executive and a campaign specialist.

GetGlue, which was founded in 2007, allows users to check in and socialize while watching TV. Its app, which has signed up 3.2 million users, intends to provide a TV guide for the mobile era, listing both TV and online content in calendar form. GetGlue launched its HD app this summer, which focused on personalization and discovery, and revamped its web site, emphasizing a new social programming guide and shifting away from check-ins.

The company raised $12 million in financing in January, which included an increased investment by Time Warner .

Viggle's deal to buy GetGlue depends on Viggle successfully securing $60 million in financing.

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