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Second-Screen Tech Reimagined: Investment Opportunities After Netflix Kills Casting

bbillions

2026-02-12

9 min read

Netflix's casting cut created a gap — and a set of VC opportunities in second-screen playback control, companion apps and smart-TV SDKs.

Hook: Netflix's sudden January 2026 removal of mobile-to-TV casting exposed a real problem for viewers and a big opening for investors: the second-screen is not dead — it has been disassembled. For finance, VC and product teams that track user engagement levers, that gap is an investable signal. This piece maps the technologies, startups and business models that can replace casting with richer, monetizable companion experiences and playback control — and shows where the smart money should look next.

Why Netflix's casting move matters to investors and product teams

In January 2026 Netflix removed the long-standing ability to cast from mobile apps to most smart TVs and streaming adapters. The immediate consumer pain — lost convenience and broken watch-party workflows — is also a commercial pain for publishers and ad tech: reduced session length, fragmentation of attention, and fewer touchpoints for real-time interactivity and commerce.

That shift is more than a UX story. It is a structural change in the streaming value chain that creates demand for:

Playback control alternatives that don't rely on legacy casting protocols
Companion apps that add synchronized metadata, social features and shoppable overlays
SDKs and middleware smart-TV makers and publishers can adopt to regain cross-device experiences
Adtech and measurement that bridges mobile intent with CTV impressions

The second-screen landscape in 2026: three macro trends to watch

To evaluate opportunities you must see the trend drivers behind them. In late 2025 and early 2026 three developments accelerated demand for casting alternatives:

1) App sandboxing and platform control

OS-level controls and tighter app sandboxes on modern smart TV platforms made direct casting less reliable for major publishers. The response is an increased appetite for standardized, partner-friendly SDKs and server-mediated session control and middleware that negotiating OEM requirements.

2) Synchronized, AI-driven companions

Generative AI and multimodal models now power real-time companion features — scene summarization, character maps, multilingual micro-captions and context-aware commerce prompts. These services require low-latency synchronization with CTV sessions, not just simple play/pause commands.

3) CTV ad growth and commerce integration

CTV ad budgets continued to shift up in 2025. Advertisers want companion-screen signals to improve targeting and measure conversions. That drives demand for second-screen analytics, identity-safe attribution and shoppable overlays synchronized to live or VOD playback.

Technical alternatives to casting: what startups are building

casting as a single technology may be reduced, but the functionality it provided can be reconstructed in several technical patterns. Startups are pursuing one or a combination of these:

Local network session control: Pair devices over mDNS/UDP/Bluetooth LE to send playback commands and metadata without broad casting protocols. This preserves privacy and low-latency sync.
Server-mediated session orchestration: The phone and TV both connect to a cloud session. The companion acts as a controller and metadata layer; the server enforces DRM and session integrity.
Web-based synchronization: Use secure web sockets and timestamps to sync a web companion page with the TV app. This is lightweight and platform-agnostic.
Edge and P2P sync: Leverage edge compute nodes and WebRTC for near real-time state replication when local discovery is blocked.

Product categories that will attract VC dollars

Below are the high-return categories where venture capital will likely flow in 2026. Each entry includes the investor lens and core KPIs to track.

1. Smart TV SDKs and middleware

Why invest: Device makers and streaming publishers prefer licensed SDKs that guarantee secure session control, DRM compliance and low integration costs. A cross-platform SDK that supports Roku, Samsung Tizen, LG webOS and Google TV is a valuable asset.

KPIs investors should demand:

Number of SDK integrations and OEM preloads — look for formal OEM interest and productized bundles laid out in a low-cost integration playbook.
Monthly active devices with SDK telemetry
Time-to-integrate and developer retention

Why invest: Social viewing and metadata layers increase session length and unlock monetization (tips, microtransactions, subscriptions). Startups that can white-label companion apps for studios or provide modular social SDKs are prime targets.

KPIs:

Average session length lift when companion is active
Engagement metrics: reactions per minute, chat activity, concurrent rooms
Conversion rates for commerce or premium features — teams using edge-first creator commerce patterns often show higher per-user monetization.

3. Interactive content tooling & timed overlays

Why invest: Tools that let creators add timed interactive layers, quizzes or shoppable hotspots increase viewer monetization. Studios will pay for easy authoring tools that sync to CTV timelines.

KPIs:

Creator adoption rate and churn
Revenue share from shoppable events
Impact on rerun/watchback metrics

4. Adtech attribution and privacy-safe identity

Why invest: Marketers need cohort-level signals from companions to close the loop between mobile intent and CTV impressions. Solutions that offer privacy-first attribution will win enterprise deals.

KPIs:

Attribution accuracy vs. industry benchmarks — partner signals and AI-driven intent layers (see AI-powered discovery)
Integration partnerships with DSPs and SSPs
Compliance frameworks and auditability

5. Accessibility and localization companions

Why invest: Language and accessibility features (audio descriptions, dynamic captions) delivered via second-screen companions can expand global viewership. This category benefits from stable, recurring licensing models with broadcasters.

KPIs:

Contracts with public broadcasters and streaming platforms
Usage rates in non-native markets
Net retention on enterprise contracts

Due diligence checklist for VCs — what to probe now

When evaluating a second-screen target, drill into these product and go-to-market specifics.

Protocol resilience: Can the product function when local discovery is blocked? Is there a server fallback? Test under different network topologies.
DRM and platform compliance: Confirm support for major DRMs (Widevine, PlayReady, FairPlay) and that the SDK meets OEM security requirements — and understand how to pitch these concerns to streaming execs (see what streaming buyers care about).
Latency & sync accuracy: Measure drift tolerance and resynchronization strategies for live and VOD content.
Monetization flexibility: Does the product support ads, commerce, subscriptions and B2B licensing? Which revenue splits are realistic?
Defensible distribution: Look for OEM preloads, studio deals or an exclusive slot in major streaming apps.
Data privacy & compliance: Validate privacy designs for GDPR, CCPA and prospective 2026-2027 privacy updates affecting cross-device identifiers.

Product playbook for founders building casting alternatives

If you're building in this space, prioritize rapid integration and measurable business outcomes. Here's a prioritized 90-day roadmap that VCs will assess:

Days 0–30: Proof-of-concept

Ship a minimal pairing flow (QR + web-socket sync) with play/pause and 5–10s drift correction.
Integrate with one major smart-TV platform and one streaming app partner.
Instrument event tracking for session lift and engagement.

Days 31–60: Monetization & SDK hardening

Add timed overlay support and a basic commerce module (link out or affiliate API).
Harden DRM interop and create a developer portal for SDK onboarding.
Close first paying pilot (studio, chain of theaters, or streaming app).

Days 61–90: Scale & partnerships

Turn the pilot into a productized offering with SLAs and revenue split terms.
Pursue OEM integration discussions and DSP/SSP partnerships for ad measurement.
Prepare a data-room and growth metrics deck for a seed/Series A conversation.

Risk map: what can go wrong (and how to mitigate)

No market is risk-free. Here are common failure modes and practical mitigations.

Platform lock-out: OEMs or app stores could impose restrictions. Mitigate by building multiple integration layers (native SDK + web fallback) and pursuing OEM partnerships.
DRM conflicts: Some studios are conservative about third-party layers. Solve with certified DRM integrations and transparent auditability.
User friction: Poor pairing reduces adoption. Invest in zero-friction flows (single tap pairing via QR, short-lived tokens) and A/B test UX heavily.
Weak monetization: If companions only deliver engagement without monetization, revenue will lag. Prioritize shoppable features, premium social rooms and data licensing early.

M&A & exit dynamics: who will buy these startups?

Potential acquirers include:

Device OEMs looking to add differentiated UX to their TVs;
Streaming platforms and studios wanting to reclaim second-screen interaction without building internally;
Adtech giants aiming to connect mobile intent to CTV impressions;
Large SaaS providers (analytics and comms platforms) that want embedded real-time sync capabilities.

Real-world signals to watch in 2026

Folks tracking deal flow should watch for early indicators that a startup will break out:

Signed integrations with one or more Tier-1 streamers or a national broadcaster;
OEM interest or formal pilot with a TV manufacturer;
Demonstrable session length lift of 15%+ and clear per-user monetization;
Partnerships with DSPs or commerce platforms enabling seamless shoppable moments.

Actionable investor playbook — four concrete moves

Ready to act? Here are precise steps investors and GPs can take this quarter.

Build a thematic shortlist: Screen startups by integration depth (SDK vs. web), DRM compatibility and existing partnerships. Prioritize teams with shipping OEM pilots.
Demand product metrics in term sheets: Require cohort-level engagement uplift and monetization experiments as part of milestones.
Offer go-to-market help: Use LP and portfolio network to open OEM and studio conversations — these intros materially improve exit odds.
Set aside follow-on reserves: Winners in this space need capital to close enterprise deals and embed on device platforms.

Why this is a durable market — not a short-term fad

Even if Netflix and other platforms experiment with reintroducing casting-like features, the broader shift toward locked-down apps and layered services means second-screen functionality will be rearchitected, not restored. That creates multiple durable revenue channels: licensing to OEMs, enterprise SaaS to studios, adtech integrations, and direct-to-consumer premium features. In short, the need for synchronized, value-add companion experiences is structural.

"Casting is dead. Long live casting!" — the headline summarizes the paradox: the feature may be gone as implemented, but the user behaviors and business value it unlocked remain very much alive.

Final takeaways

Market signal: Netflix's January 2026 removal of casting is an investable disruption, not the death knell of second-screen use.
Investment targets: Focus on SDKs/middleware, companion platforms, interactive tooling, adtech attribution and accessibility companions.
Technical must-haves: DRM support, multi-platform strategy, low-latency sync and privacy-first identity approaches.
GT M strategy: OEM preloads, studio pilots and DSP partnerships accelerate scale and exits.

Call to action

If you track market-moving deals and want concise, verified intel on startups pursuing this space, subscribe to our Deal Coverage newsletter for weekly roundups and primary-source filings. If you’re a founder building a second-screen product, submit your deck and integration telemetry — our analyst team will flag founders to a curated network of CTV-focused investors and strategic partners. The casting gap is a narrow window — move fast.

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Senior editor and content strategist. Writing about technology, design, and the future of digital media. Follow along for deep dives into the industry's moving parts.