Home > Big Thoughts > Will Google TV Destroy TV?

Will Google TV Destroy TV?

(Note: I work for the Walt Disney Company, but I do not work for ABC or Hulu. My comments are mine, not my company’s, and I am not citing inside information in this post.)

If you don’t follow these things, Google TV is a recently announced effort from Google, Sony and others to enter the already active and increasingly chaotic world of Internet connected TV.

Yahoo, Roku, Vudu, Apple, Netflix, and others are already doing it. Google is new to the party, but a big name attracting attention. (and a new Apple TV is now rumored)

The basic idea of the connected TV is to take the kind of video watching you do on your computer and move it to the biggest and best picture, sound and seating you have in the house. The original video device. The almighty television.

You could get all the breadth, randomness, and consumer friendly economics of Internet video without the neck and back strain of “leaning forward” over a keyboard and mouse.

But does this matter? Will it change the world? The hype from Google and the others would say yes.

This is all fine for the oddball viral video and niche specialty content that doesn’t already exist on traditional television or DVD, but what would really change the industry would be getting high value network or studio products like you find on Hulu. You could cancel your cable bill and watch far fewer advertisements. Sounds great right? But…

You cannot meddle with the primal forces of nature!

Am I getting through to you, Mr. Beale?

There is no free lunch. TV is expensive to make. Especially if it’s good TV. A show like Lost with visual effects, big sets, and well paid union writers, directors, and actors needs a budget. A big budget.

Where does that money come from? There’s a complicated answer to this and a simple answer. The simple answer is the money comes from you.

Just like when taxes are raised on corporations, ultimately they’ll raise prices on products and get that money from consumers. The money is in the people, and if the people stop paying, there is no other source.

The complicated answer is that it comes from you in many ways. Part of your cable bill makes its way back to the networks. The time you take watching advertising (unless you’re skipping, more on that later) is value extracted from you and sent back to the network. And the season box sets you buy or rent on DVD count as well.

As more and more people figure out how to get their shows without paying these costs, the available pool of money to make the shows will shrink. The networks must react to this, it simply doesn’t work to just shrug it off and continue on like it isn’t happening.

One reaction to this may be to lower the cost of production. This can mean moving away from expensive shows like Kings, Law and Order, or CSI and towards lower cost product like The Apprentice or Jersey Shore. Another way to lower costs is to pay less for talent by using unknowns or bargaining down the unions.

Another reaction is to simply block content from running on these devices. This is what Hulu did with Boxee, the PS/3, and others and the assumption is they will do the same with Google TV, if they can. (If they can’t, I’d expect a lawsuit, or simply for shows to be pulled from Hulu)

Those are negative reactions. They reduce the value of what is circulating in the system. What I’d like to see is to keep expanding access, but make a few critical adjustments to ensure people get paid. You may not like it, but compare it to the above alternatives…

A place to start is to charge for content. Either as a subscription like Hulu-plus, or pay per view, which you are already seeing on the web. There era of “the internet is free” may be over, and this is what will come to your TV set.

If you still want it “free”, then another option is to raise the value of advertising.

The least creative way to do this is to make ads unskippable. This is unfortunate if you’ve grown accustomed to skipping, but it’s inevitable. You’ve seen this on the web. Get ready for it on your TV.

A better reaction is to make ads better. Make them something you actually want to watch, will watch more than once, and will send to your friends. You probably do this now already, just not from your TV. Not yet.

However the most effective solution may be to make ads more relevant to you. Enter Google TV.

The reason you skip ads is because they don’t mean anything to you. But what if every ad you saw were precisely targeted to you and your family? So much so it may even creep you out a little. (that will be a fine line to navigate)

In the future, advertising may address you by name, reference where you work, where you drove today, what products are in low supply in your fridge, what you were discussing by email or on Facebook that day, and so on.

Going further, interactive commercials could directly drive commerce, allowing you to explore deeper into the product, have more information emailed to you, or make an impulse purchase on the spot.

Relevant and responsive advertising is something Google knows a bit about, and they want to build a platform to bring this expertise from the web to your living room, but they won’t be able to do it alone. They need the networks to play along, which means they need to show them the money. Your money.

What do you think? What are you willing to trade (time, personal information, cash) in exchange for high quality entertainment?

How much do you want another way to get movies and TV shows to your TV?

About these ads
  1. LAnce Aston
    May 28, 2010 at 12:16 pm | #1

    I think it inevitable that we will want our visual entertainment available on all formats. Personally I find cable and network TV so stuffed with ADS I barely watch it, even with tha ability to record FAVS . I personally find News media the worst at cramming ADS in and think that a web based news feed free of ADS wold be MASSIVE. News is now entertainment based with really no international news at all. So I hope that when we have 2million channels to choose from we might be able to kill traditional media and a new more specialised forum will be born.

  2. Amy
    May 28, 2010 at 1:08 pm | #2

    I agree, I have found myself watching less and less tv due to commercials and instead waiting for the shows to come out on dvd and getting through netflix. as for news it would great to just get ALL THE facts without the ads especially with how fast paced our lives are today. It is so amazing how fast our media outlets have been intertwined even in the past 3 years

  3. Amy
    May 28, 2010 at 1:09 pm | #3

    ps that IS one of the funniest ads i have ever seen. I wouldnt mind watching more ads that were funnier and more entertaining. that might help

  4. Roberto Montesinos
    May 31, 2010 at 11:47 am | #4

    Nice article yet it kind of hit me the wrong way.

    Remember in Minority Report where people’s retinas are being scanned as they walk and targeted ads are flying all around them?

    An IP Address on a Google TV will provide similar unique ID to the viewer and that is creepy, very 1984 (George Orwell). Very exciting to these mega-corporations I suppose. I wish them well since most of the product they create is here in the states, yet I am no fan of runaway production in places like Louisiana and Michigan and Canada. LOST in Hawaii – absolutely, makes perfect sense. LEVERAGE in Portland, huh?

    On my side of the ledger, rent is more than double here in Los Angeles than it was ten or so years ago yet salaries have nowhere near doubled. iPhone employees are committing suicide at an alarming rate ( http://www.guardian.co.uk/world/2010/may/27/foxconn-suicide-tenth-iphone-china ) yet those devices are not being manufactured here in the states.

    So I don’t have much sympathy for the advertisers that manufacture their “goods” in China and then import them with no real tariffs to speak of and keep the American label name on the product. Why not import Tsing-Tao exercise products? And then you need a magnifying glass to find the “Made in China” label.

    It’s a tough situation for them but I look forward to the time when the best electronics and other products in the world are manufactured here in the United States or they leave the foreign name on the product, e.g. BMW or Mercedes, with a little pride. Where is the genius in paying $2.25 an hour with absolutely no benefits and no safety regulations in the plant?

    They (I hate to be so general but they) are essentially ripping off American families so I can’t really worry about how they are going to exploit the new technologies in order to sell us more product manufactured elsewhere and meet their quarterly goals so that Wall Street doesn’t short their stock.

    And then again there is the residuals issue for talent – I don’t believe that IP-based Television streams applies for residuals in the same way as network television signal.

    But oh well. Nice article. No sympathy.

  5. June 3, 2010 at 1:30 am | #5

    Nice post. You put forward the content owner/producer side in an honest refreshingly open way.

    I have just one issue. I’m not sure the google ad magic will be quite as powerful on the TV.
    One reason its works so well on the Web is that the ads come up at that inflection point when your mind is searching for something, fully receptive and open. If you’re shown something only slightly relevant you’ll be interested.
    TV is still a lean-back experience and one isn’t so open minded. Either looking for a specific program or wanting the system to take you somewhere comfy, in all cases you’ll be less receptive.

    More here: http://www.ctoic.net/ctoic-blog/google-tv-off-to-a-bad-start-613

  6. June 3, 2010 at 11:29 am | #6

    Ben, I agree with you on TV is still a lean-back experience. Responses to web type ads during the search process is an unknown.

    I think the real value is in the video insertion business, which Google can’t just do on their own, they have to integrate into the network programming.

    (if they did try to just overlay new video ads over the existing ads, while technically possible, I’d expect a cease and disist faster than a potato shot out of a tube sliced into fries and boiled in Chrome. http://youtu.be/nCgQDjiotG0 )

    Again, I’m not speaking for my company, just observing. I’m as curious as you all on how this will actually play out. Interesting times.

  7. audrey matos
    June 3, 2010 at 11:13 pm | #7

    Very catchy blog title and tag line.

  8. June 5, 2010 at 12:35 pm | #8

    Latest example… http://www.youtube.com/watch?v=ql-N3F1FhW4

    3M+ views for a 2.5 minute commercial. Not even part of a show, just making its way around the world because it’s entertaining.

    30 seconds is no longer the limit.

  9. June 6, 2010 at 9:17 am | #9

    I think Google TV will redefine (not destroy) TV. We have come a long way from three network television companies but the monetization logic has not evolved significantly. While we have changed how we watch television, the broader system of how we “search–>access–>consume–> connect–>share–>store” media has not kept pace. I see Google TV and follow-on announcements from Apple, Hulu, Netscape and others to be part of the broader redefinition of TV rather than destruction of TV. The destruction may be to traditional ways of monetizing it.

  10. October 6, 2010 at 2:20 pm | #10

    Google TV is still a real attempt to TV and Web convergence, capitalizing on new powerful chipsets provided by Intel and that’s a move forward into innovation: I value this.
    One may criticize rightly the lack of stability of the Android OS, the heterogeneity of UI when switching services (Netflix, Pandora, Amazon, …), the required use of keyboard for Web browsing, it’s still a nice attempt to foster new usages, taking advantage of 2 Google strengths: search capabilities and App store linked to Android.
    I have noticed 2 other specificities: the “HDMI in” which means TV stream will be handled by another device, Google bypassing TV decoding and pay TV security management (a clever trick), and the search engine that mix at the same level TV channels contents with various contents coming from the web (dominant broadcasters will not be pleased).
    At Orange, based on the same Intel technology, we have developed a fully different approach, targeting Openness and TV and web cross fertilization: read more at goo.gl/axT4. One might say it’s natural, we are an operator and we make operator designed-for products! ;-)

  11. Struddle Man
    October 21, 2010 at 4:55 pm | #11

    Jesus…Ads targeting you, that are so refined its creepy…I really don’t want to live in that world, I really don’t. I’m a systems analyst, but I really believe there’s a rogue group of us, that want to go in a different direction. We believe in the sanctity of some user privacy, and if I run a network, even in my home, I am taking steps to encrypt my data, and the data going in and out of my network, because I don’t want corporate freaks knowing what is in my fridge. As a result, if these bozos want to expand into a new market…they need to support the set top boxes we have, because we want to use our boxes, our way, not their boxes thier way. They will provide a service, that I pay a flat monthy rate too. It will cover thier costs, and deliver the content I want, in a safe manner, that dosen’t cost me my privacy.

    And if there is a corporate shill reading this, who just doesn’t get it…leave now, because you’ve already lost the plot, and you will not be a contender in my home, you never will be, and I’l get my entertainment elsewhere.

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