Digital Dealmakers: Sangita Verma

Oct 30, 2006  •  Post A Comment

The player: Sangita Verma, CEO and founder of Mountain View, Calif.-based TVHead, a video-on-demand gaming service

The play: TVHead marries two human impulses-the desire to play games and the desire to play them when we want. TVHead is a games-on-demand network that cable operators deploy through VOD, and consumers interact with the games using a remote control. “As a consumer, you come to the TV, turn on the TV and start playing games,” Ms. Verma said. Consumers can play all the games using the arrow and select buttons on a remote. The lineup includes kids’ games, learning games, puzzle games, card games and casual games. TVHead is not competing against high-end consoles that traffic in games such as “Halo” and “World of Warcraft.” Instead, “Our games are probably by proxy what you find on the Internet, like Tetris,” she said. Ms. Verma currently is in talks with the top four cable operators and expects to launch a technical trial with at least one in early 2007.

The pitch: Because the games are sent via VOD, TVHead’s service can run on any kind of set-top box. The games reside on a server and are sent to the box in the same way a cable operator sends a TV program via VOD. Consumers are playing frequently. TVHead conducted consumer field tests in six markets earlier this year in partnership with TV technology firm ICTV. Those tests indicated that about 73 percent of homes that could play the games channel did, Ms. Verma said. Of the consumers that played at least once, 93 percent came back. Over a three-month period, about 60 percent of consumers used the service about 25 times per month.

Making money: Games offers a dual revenue stream. Ms. Verma expects that about one-third of users will subscribe and about two-thirds will play for free, with those games being ad-supported. TVHead will sell the ads and the operator will get a percentage. The subscription will cost $4.95 to $6.95 per month for those who choose that option.

The money guys: TVHead has received a total of $16.5 million in funding. APAX, a private equity firm, is a principal investor.

The pros: Ms. Verma believes the market is huge for a gaming network on VOD. About 83 million Americans play casual games, she said. According to a recent Harris Interactive poll, 31 percent of adults would rather play games than watch TV.

The cons: The biggest challenge facing TVHead is gaining distribution with cable operators. “Operators have a lot on their plates,” she said, but added, “The competitive environment is turning out to be very interesting.” That means a gaming offering could give cable operators an advantage over telcos that are now starting to offer video service.

Backstory: Ms. Verma founded TVHead in May 2003. Prior to founding the company, she worked at Midway Games. She has also worked with Panasonic and Atari. Ms. Verma, 41, was born in a small town outside of Delhi, India. She moved to the United States when she was 4 and grew up in California and Oregon. She graduated from the University of California at Davis with a dual degree in economics and communications. She is married with two kids and lives in the Silicon Valley area.

Who knew? Ms. Verma is a former gymnast and is known to still do cartwheels on impulse, especially down the long hallway at the TVHead offices.