Will Twitter’s Investment in Social TV Create an Open API Ecosystem or a Profit Gallery?

2013 is going to be the year of big data implementation. More companies will be making personalized applications for Consumer Services, and so therefore we are exploring the very relevant topic of APIs in a Consumer Service-driven market.

On one side, as smart apps grow in popularity and ride the wave of the future for both the consumer and enterprise cloud, the market will need more open APIs. The counter-argument to this is that APIs could become more profit-driven in such an economy. For example, let’s say Twitter begins to sell its API access to companies that want metrics and advertising directly related to social TV, a popular tie-in for Twitter data.  Yesterday morning, Twitter actually announced acquiring Bluefin Labs, which is a social TV analytics company. Twitter believes that Bluefin’s advanced knowledge on social TV, as well as its data science capabilities, will assist in creating a better consumer and targeted advertising experience.  There’s no specific APIs in the works yet, but Twitter’s latest investment brings up the very relevant topic of analytics for sale, and the future of APIs from influential platforms like Twitter.

Growing demand for TV-related APIs

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Twitter currently offers both free and paid APIs, depending on the usage. Typical end-users that offer 150 messages per hour are free, whereas larger usages — like the ones from both media and news companies that are looking to harvest Twitter data — cost money because they are able to handle messages in the thousands range.

More specifically to the burgeoning demand for TV-related APIs, the market is growing around the promise of personalization.  As we’ve seen from Apple’s Siri, Google Now and others like Saga, the trend towards personalization requires a certain amount of anticipation on behalf of the user.  New personalization services for consumers are draped in recommendations and targeted advertising, learning our individual behavior patterns amidst a sea of other consumers in order to determine what we need before we ask.  In order for Consumer Services to be this personalized, the market will need more fluid data exchange amongst apps, and the most effective way to do so is through APIs.

Making the case for an open ecosystem

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Many have called for a more open exchange platform as far as APIs go, including Are You Watching This?! founder Mark Phillip.  RUWT has made a business of social TV, making it more interactive and personalized based on your preferences and needs.  Highlighting the example set by Microsoft Xbox, Phillip is an advocate of open ecosystems.  ”A more open app ecosystem – making the APIs more available to developers – would mean even more success for the company,” he says.

Others like Springpad are looking to incorporate more TV-related recommendations into their platforms, alongside other virtual assistant features like event and task reminders, price changes on products you’ve bookmarked, and automatically pairing wines for any recipes you add.  This level of automation is a key differentiating factor for Springpad, which is adding new data sets as layers to the consumer experience based on the fact that Springpad already understands your needs.

Springpad currently uses an API from Tribune media for TV-related recommendations, which can be quite costly.  It raises the question of how TV-related APIs can and should change in the future as television becomes increasingly social.

The API business model: free or commercial?

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To that end, Twitter has a unique opportunity to offer some very interesting and highly accessible APIs related to TV viewing habits, and could very well make a business of this. How that business model is laid out, however, could have a lasting impact on third party app developers, advertising tactics and the end user experience.

While Twitter offers both free and premium API options for its current API portfolio, the company has been notorious for revoking API access, which can completely ruin an application developer’s business.

Last year, Twitter limited its ‘open’ API access by closing off an important lifeline for business intelligence. This action only showed businesses that they cannot solely rely on their data sources’ rules. Unfortunately, creating a new solution can take years and cost a great deal of money—sometimes even millions.

APIs: who needs ‘em?

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According to executives from Kapow, relying solely on APIs has been a problem for businesses to get information when it’s needed. Not to mention the different types of data sources and third-party apps, which don’t have APIs, are needed to show what the marketplace and competitive landscape will continue to merge into.

The company predicts that this year, IT Departments will stop depending on APIs so much by replacing them with automated technology that will have the ability to retrieve data from any data source, which will free resources from developing contingency plans of “putting data to work.”

The question of third party access to APIs is also dependent on what type of company we’re talking about.  Yandex, for instance, found itself in quite a quandary when Facebook revoked API access to the social search engine.  In this case, it could very well have been due to a conflict of interest, Facebook retaining the right to either extend or limit data-sharing with third party services.

Springpad, however, is less fearful of a similar hiccup happening to its productivity tool.

“I’m not concerned about something like Springpad getting shut out–we’re not the big search engine,” says Springpad co-founder Jeff Janer.  ”The trend is moving towards open, not closed.  I think APIs are here to stay.

“The question we look at is how many of these are freely available versus commercially available, and which do we prioritize?  From our point of view, that ultimately has an impact on our investment.”

 Written by Amber Harris and Kristen Nicole