My two cents

Google TV – we had to know this was coming

From investing over $100M of their own money, to hiring TV Exec Jeremy Stern and launching a pilot internet+phone service platform in Kansas City, Google is serious about entering the pay-TV market – and (as usual) massively disrupting it.

And we had to know this was coming. When Google first acquired YouTube in 2007, there were rumors it provided a platform to enter television, though nobody fully understood how to connect the dots – nor if we, as consumers, would even respond. Fast forward 5 years and streaming video is not just a novelty, it’s the “norm”, video advertising CPM’s are 20x – 30x – almost 50x higher than normal CPM’s, and Google is in prime  position to make a serious play for the space, complete with the highest trafficked video platform to make it happen. Underline this with stats projecting cable TV to be a $150B industry by 2012.

Can you say goldmine?

Existing players, network and cable content developers alike, can’t be happy that Google is on their tails.

A few reasons they should be worried:

  1. It’s Google. While we have seen stumbles a few times, their track record speaks volumes for how well they plan market moves like this, and with $150B on the line, you can believe Larry and Sergey have been planning this for some time.
  2. They have financial resources. Not many others have the capacity to invest in cable/pay TV the way Google can – the $100M they’ve already committed is securing producers and content owners alike including (but not limited to) newcomers Electus and Vice; established brands like the Wall Street Journal, Thomson Reuters and WWE; celebrity headliners such as Madonna, Rainn Wilson, and Shaquille O’Neal; and content managers including Demand Media and the acclaimed TED conferences. They are making a play for pay TV – and they’re shelling out the cash to do it BIG.
  3. They have an advertising advantage. Google’s ability to connect their search algorithm with video content and create high-value eyeballs is compelling. Once launched, Google cable will not only be a premium provider of exclusive content (through the deals noted above), but they can also surround this content with highly relevant and targeted rich media and video ads catered to every user logged on. None of their competitors - Netflix, Hulu, Amazon, or the networks – have the smarts or insights to do this, creating a distinct competitive advantage for Google.

There is some time until we get to experience Google TV/cable, though likely not much. Once the YouTube channels go live, it will only be a matter of time before Google Cable becomes a “reality” and like they did with online search, free email, and the Android platform – our digital (and non-digital) TV watching experience will never be the same.

Some great reads on this:

NYT – YouTube plans to make big bet on new online channels

DailyTech – Google Cable? Internet giant ponders plans

Mashable – Google could be planning to completely disrupt the TV business

6 months ago
  1. nasnyc posted this