Why Google TV Can Succeed In Spite of The Cable Companies
Bill Niemeyer, Senior Analyst
June 21, 2010
The announcement of Google TV has certainly got a lot of attention. I think it could (maybe) gain a good deal of consumer, developer, advertiser and network traction. Google TV could even be a Game Changer.
While my ten years in the advanced TV/video business has taught me to be a curmudgeon about "Net Meets TV" efforts and there are many "devils in the details" that will affect chances for success, I find myself being somewhat optimistic about Google TV. Welcome to 2010 - things have changed.
With many Google TV topics to discuss, I'm going to focus on one here - can Google TV get market traction without any cable, satellite or telco IPTV operator cooperation beyond the deal they now have with DISH?
I'm going to say yes. Why? I believe there are three classes of apps that can be deployed on Google TV, with only one of them dependent on operator cooperation. And the remaining two classes can represent significant market opportunities.
The three classes of apps are:
- Tightly TV-Coupled Apps
- Loosely TV-Coupled Apps
- Not TV-Coupled Apps
Tightly TV-Coupled Apps - These are apps that directly relate to what's on TV at that moment and depend on communication between Google TV and the operator's set top box (STB). For example, a DISH customer tunes his STB to The Weather Channel. The box communicates the channel change to Google TV, which launches a Weather Channel app with local weather info in a live graphic feed at the bottom of the screen (this could easily carry targeted ads, as well).
Loosely TV-Coupled Apps - These are Google TV apps that directly relate to what's on TV but don't have the benefit of communication with an operator STB, because Google and the operator haven't done the business side deal. Or it could be technical challenges or whatever other reason.
How would a Loosely TV-Coupled App work? Using The Weather Channel app example, there are two ways.
One is via technology. Google TV picks up information encoded in the TV feed from the network and identifies what's being viewed. It's an old technique. Over 10 years ago, WebTV and other platforms supported analog TV in-signal information encoding called ATVEF (TDG's Colin Dixon was on the Microsoft WebTV team). On a modern HD signal it could be done via metadata or watermarking.
But there's another way that's proven to be technically feasible and simple to deploy. I'll call it “HLTA - Human Launches The App.” I change the channel to The Weather Channel with my cable remote, I pick up my Google TV remote and launch The Weather Channel app. It's definitely non-optimal but how much harder is that than launching any iPhone, Android or PC desktop app? If a Loosely TV-Coupled App provides enough utility, I'll pick up two remotes to use it. And once the app is launched, it can be tightly synced to the TV program via the Internet and cloud-based servers. This isn't new tech either. Ten years ago, I was part of the team at a VC funded tech start-up named Spiderdance that did exactly that, syncing PC game show apps with programs on networks including NBC and MTV.
Not TV-Coupled Apps - These are apps that have nothing to do which what's on a TV channel, using the HD big screen simply as an output device - a very big colorful compelling output device. To me, one of the first best fits is social games. If you are one of the 35 million daily players of Farmville (the very popular Facebook game and cash cow for developer Zynga) and it's evening time, wouldn't you like to spend some of your hours and hours and hours playing it sitting in front of the biggest display in your house, the one in front of your comfiest sitting spot and attached to your best sound system? While Zynga has not announced plans to support Android, it would be hard to believe it's not on their product roadmap, at least for the mobile market (Zynga did just announce a June launch for an iPhone Farmville client). And Google TV will include a Flash player (the PC Farmville client is Flash based). But it's not just social games. Non TV Coupled Apps could include any PC or mobile device activity that could be considered leisure time and benefit from a very nice big display.
So back to my original question - can Google TV gain market traction without an operator deal beyond the current one with DISH? With two out of three app categories not requiring operator set top box integration, I say “yes.”
And there probably won't be another Google TV/operator deal, at least for 18 months, judging by what's happened with Google TV Ads (web-based buying and reporting for linear TV commercials). Past the deal Google had in place with DISH at the launch of Google TV Ads in 2008, there haven't been any major operator deals since. The Fear Of Google is quite strong.
And what of the TV networks' own Fear Of Google standing in the way of Loosely TV Coupled Apps? Two thoughts. First, some Loosely TV-Coupled Apps likely will not need network deals (TV related social media for example) as long as they can successfully manage copyright infringement issues. Second, it will only take a few early adopter networks having success with Google TV apps at driving viewing and engagement for other networks to move in and try it. There's an expression I first heard applied to new technology in the oil industry that works for TV networks as well: "Nobody wants to be first and nobody wants to be third."
I'll leave you with one more thought. Market success for Google TV may well drive even the largest cable operators to do integration deals with Google. Five years ago, the mobile carriers had a very cable-like view of the world. But with market success for the iPhone and Android, and now a robust mobile app market (Steve Jobs said earlier this month that Apple has paid $1 billion to iPhone app developers), mobile carriers have had to loosen up their walled gardens. Google TV may lead cable operators to follow suit.
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