As expected, Google announced Google TV at its Google I/O conference today, with the tagline “TV MEETS WEB. WEB MEETS TV.”
Now, these two have met before, and they didn’t exactly hit it off. In the pile of failed consumer tech gear lays a device called WebTV, which launched in 1996. Microsoft later rebranded it MSN TV, but all the king’s horses couldn’t make consumers buy it.
Fast forward to the present. Now there are a lot of IP-enabled set-tops and broadband-connected TVs, but these are generally walled-garden type services, not the open (both in terms of content and source) system Google and its partners, Sony, Intel and Logitech have announced (showcasing Google’s Android OS running on Intel’s Atom processor). Google pointed out the four billion TV users around the world, as compared with two billion mobile and one billion PC users. So if Google can be as successful with ads on TV as they are on the PC-based web, well, you get the idea.
How big an “if” is that? At this point, there are too many unknowns to say, but it certainly needs to be considered a long-shot. There are basically four big wildcards:
- Consumers. Obviously there is not a great deal of pent-up demand to surf the web on TV or we’d all be doing it by now. Can Google create a compelling enough platform to override the passive “lean-back” instinct that seems ingrained in the TV-watching experience? Very hard to say. Apple has dabbled here with indecisive results.
- Manufacturers. Can Google get more TV-makers than Sony to embrace its platform and make it universal? Today, large manufacturers like Samsung and LG are pushing their own proprietary notions of connected TVs. Yahoo! attempted to unify them with its TV-Connected Widgets platform but this appears to be struggling. Although Samsung has experience with Android, one must imagine that manufacturers would be reluctant to line up behind brands like Google and Sony to support this. And even if they did, the replacement cycle is daunting and all the bets right now appear to be on 3D.
- The Media Business. The $70 billion that Google attributed to TV ad spending in the U.S. supports a massive value chain of content providers, broadcasters and distributors who are not necessarily ready to roll out the welcome wagon for Google. Google’s strategy appears to bring its search-style of getting between consumers and content to the “10-foot experience” but the broadcast industry is wise to this strategy and has seen its effect on the publishing industry. Industry groups like NAB, NCTA, SCTE and CableLabs have historically been effective at taming manufacturers with standards that keep the TV environment closed, interoperable, and regulated. To open this up more than a crack means creating extreme disruption in a highly entrenched system. It’s also worth noting that most of the language around net neutrality to which service providers such as AT&T have agreed carve a broad and clear exception for HD video content.
- Government. The FCC is perhaps the biggest wildcard of all, in the sense that it’s the most unpredictable. The US National Broadband Plan suggests a favorable climate for the principle of opening TV to broadband distribution and open set-top boxes, and the FCC has tried in the past to weaken the hold of distributors over set-tops with its unsuccessful CableCARD initiative. But Google has also come under scrutiny over anti-trust concerns and the FTC has suggested it might block its acquisition of mobile ad network AdMob. Having an opaque proprietary search engine at the public’s entryway to TV programming is likely to strike some activists as an alarming idea. It’s also clear that adding web content, apps, and social features to TV challenges a principle mission of the FCC to enforce “contemporary community standards” in TV programming. This suggests that opening TV has implications well beyond technology and business.
Two things are certain: 1. We’ll be glued to the edge of our seats as this accelerates the arms race between Google, Apple, and industry players like Canoe Ventures to invent the next generation of television. And 2. whatever that looks like, it will largely be brought to you by Advertising.
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