AT ANY GIVEN MOMENT, there are thousands of programs ready to stream via satellite dishes and cable wires — everything from Jersey Shore to Hawaii Five-0. Tack on premium services such as Apple TV, Hulu, Netflix Instant, and Roku, and that number soars into six-figure territory.
Amid such chaos, "the channel-surfing paradigm will die," says Thiru Arunachalam. "The only paradigm that will work is discovery: I've just come home from work, I want to be entertained, tell me exactly what you think I'd like."
That's the promise of Peel, his startup that's helping viewers navigate the fractured world of home entertainment by turning their iPhones and iPads into ultra-intuitive remote controls. Its free app, which has racked up more than half a million downloads since its October debut, offers users a sleek, visual programming guide — think Apple's Cover Flow — updated in real time. Then, with help from a new infrared-enabled plastic device called "the fruit" (sold separately for $99), the app syncs wirelessly with almost any TV set or cable box, and gets smarter over time. Because the Pandora-like platform remembers you tapped to turn on Mad Men, for example, it'll automatically recommend other stylish period dramas, such as Boardwalk Empire, that are on air whenever you open it. "We think of it as a next-gen TV guide," says early investor Satish Dharmaraj, a partner at Redpoint Ventures.
Peel is the most powerful tool yet to leverage the "second screen," a catch-all term for the smartphones and tablets people turn to alongside TV. VH1's Co-Star app, for instance, offers a fun, photo-rich platform to chat about live broadcasts. And companies such as GetGlue and IntoNow, which Yahoo recently acquired for roughly $20 million, allow users to ID the shows they're viewing and then tell friends to tune in. Peel is developing social features as well, but "what sets it apart," says Ben Bajarin, a consumer tech analyst at Creative Strategies, "is that it lets you actually control your TV."
Arunachalam and chief product officer Bala Krishnan have been working toward this goal for more than three years, recruiting engineers from iTunes (for the user interface) and finalists from the Netflix Prize coding competition (for the recommendation algorithm). "We wanted to peel away all layers of complexity," says Arunachalam, citing physical buttons, multiple remotes, and that never-ending grid of listings — all of which Peel's slick, intuitive platform renders obsolete. Even setup is a cinch: users sync the app by answering a few rote questions about the make and model of their TV and/or cable box. (There are 200,000 types supported.)
That simple yet sophisticated approach also applies to the companion device. "It was going to be on a coffee table or bookshelf, so it had to be beautiful — not just some black box," Arunachalam says. So he and Krishnan tapped hotshot designer Yves Béhar to transform their "shabby-looking prototype" into the sexy, pear-shaped final product. Within a week of its March launch, the device sold out online and in Apple stores. Inspired, the partners asked Béhar to mock up orange and lime models, which will debut later this year.
Cracking the mainstream market remains a challenge. Though Peel will soon add integration with TiVo and Netflix, as well as an Android app, "today, it's more of an enthusiast product," says Ross Rubin, a consumer tech analyst at the NPD Group. "It's still very early in the Wild, Wild West" of second-screen engagement, adds Bajarin, noting that any number of social-TV startups could invade Peel's niche.
Still, the company has raised just over $24 million in VC funding, which speaks to Peel's promise as a game-changing — and potentially creepy — ad platform. Because the app knows which channels its users are surfing, "it could deliver pretty amazing demographics," says Dharmaraj. "Not just 'someone is watching TV,' but 'a 24-year-old male living in Saratoga is watching Lost.' " To that end, Dharmaraj envisions a future where Peel could tell certain viewers, midbroadcast, what a character is wearing on-screen, and where to buy it.
For now, though, team Peel is focused on expanding — and selling fruit. "It's not a matter of years, but a matter of months before we become profitable," says Arunachalam. Spoken like a true couch-potato king.
A version of this article appeared in the July/August 2011 issue of Fast Company magazine.