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business newsTrendspotting: Investing in Smart TV
By
Carol Kopp
May 26, 2010 1:45 pm
Is Google TV ready for prime time, or is it just the latest in a long string of niche products that aim at media convergence?
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Okay, we’ve been hearing that one since Sergei Brin was sucking on a Zwieback cookie. But all the same, Google TV, which was announced last week and is expected to be available by fall, might actually work. If it does, it will become part of our daily lives, unlike the many earlier attempts -- by Microsoft (MSFT) and Apple (AAPL) among others -- that were doomed to become little more than niche products.
Why would Google succeed where so many others, who aren't exactly dopes after all, have failed?
Partly because Google has got its priorities straight. Google TV is a natural extension of the company’s primary business, which is delivering targeted advertising. It's leaving both the content and the hardware to others.
Google’s not trying to create a cool new gadget that geeks will love and the rest of us will reluctantly learn to live with. Or not: In the earlier efforts, the actual content was secondary in nature and limited in scope, and thus pretty easy to live without.
Here, the promise is a clean merger of Internet and television, using nothing more or less than the interface and functionality that's become familiar and effortless to users of both devices. At least that’s what Google promised to deliver, and that’s certainly what the media audience heard.
So what is this thing, Google TV? As described, it’s simply Google search, but it collects matches to your queries across television programming as well as the Internet. And it uses the Google Chrome browser, so you can channel surf.
So, it’s a kind of online television and Internet guide that delivers one-click access to any programming from either source. If you’re obsessed with the Lost season finale, you can choose to watch it on television, or see a parody of it, or a rerun of an old episode, or discuss it on a blog, or see a recent interview with one of its stars. God help us, there will be millions upon millions of channels out there, and they’re all going to be on at once.
With this project, Google is acknowledging the plain fact that television programming might seem like a business on the decline, but television viewing is one amazingly sticky habit, not least because it's absolutely not interactive, and therefore is effortless.
As noted in the company’s presentation, Americans spend five hours a day watching television, and advertisers spend $70 billion a year in the US alone to reach them. The worldwide audience is about 4 billion, and that’s about four times the number of personal-computer users out there and twice the number of mobile-phone users.
Among Google’s partners in the project is Intel (INTC), which will provide the chip. Sony (SNE) has announced it will introduce the first HDTV incorporating Google TV this fall. Meanwhile, Logitech (LOGI) is building a set-top box and keyboard for televisions that aren’t Google TV-ready.
(Also, the service will support Adobe (ADBE) Flash as well as HTML5, just to score a point on Apple, which chose not to permit Flash to run on its iPads.)
Conspicuously absent from the lineup are the broadcast and cable networks.
They are more likely to see this as a deadly threat than an opportunity. After all, advertisers trying to reach that fanatic Lost audience have an interesting choice to make, between advertising alongside search results or within programming. Google has already said that it has no plans to share the revenue from search results.
Moreover, it’s hard to see the networks being thrilled about their expensive prime-time programming appearing as mere equal choices among an infinite number, many of them created by shoestring entrepreneurs and enthusiastic amateurs. Not to mention the entire Netflix (NFLX) catalog. The streaming-video site Hulu, which is owned by Disney (DIS), News Corp. (NWSA) and NBC (GE), has already blocked its content from other devices, including Playstation 3, presumably because its bosses feared competition with its scheduled television programming.
The networks could block Google TV, too, and hope its users will toggle between their scheduled programming and everything else on offer.
Then again, they might take it as an opportunity to raise the visibility and increase the audience of some of those hundreds of television channels that they've launched in recent years. And to fine-tune their own targeted-advertising techniques to give Google a run for the money.
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