TDG Opinions

Raising the Likelihood of Success for Google TV

Content Partner Announcements Raise the Likelihood of Success for Google TV (A Lot)

Bill Niemeyer, Senior Analyst

October 8, 2010

Google has begun the official consumer-facing ramp up for October launches of both Sony and Logitech Google TV platform products (Logitech announced this week that it would ship in October, while Sony’s launch event is scheduled for Tuesday of next week in NYC). As well, Google announced some interesting content and service provider relationships sure to have an impact on how Google TV is perceived by consumers.

Given what has been announced, it is worth revisiting a few of my prior proclamations....

Regarding the question of whether Google TV will be a “game changer,” I am upping my answer from "probably" to "yes." It is now a matter of when, not if.

Google TV provides a new and unique use case for consumers, one I believe will be seen as highly desirable. That said, the pace of diffusion will be gated by price point ($299 for the Logitech Revue box) and product availability. Over time, Moore's Law fixes the former and demand fixes the latter. As to price point, Apple sold three million $499-or-higher iPads in the first 80 days of availability. Will Google TV do iPad numbers? No. Then again, there are enough prosperous gadget-loving early adopters that will buy Google TV devices in the next year to start changing the business of TV and video significantly.

Regarding the content partner applications for Google TV announced this week, I predicted in June 2010 how this would likely play out (now hurting my shoulder patting myself on the back). I believe this will create sufficient momentum to encourage even more content providers to engage with the platform. As I said in June, "…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."

I also noted in June that social media games in general and Farmville in particular would be great applications for Google TV. No, Farmville was not explicitly mentioned in the Google content announcement this week, but the picture below from the Google TV website (bottom row, middle icon) seems to suggest my prediction was accurate.

Google TV

Now to this week's news from Google.

First, Google launched a well-conceived consumer website to market Google TV, one that is worth checking out if only to see the features and UI design.

Second, Google has announced some big content partnerships; announcements that diminish significantly the “business friction” arguments regarding Google as an advertising competitor of the TV networks (a real fear among networks, though I believe the attraction of the platform outweighs the negatives), or that networks will not want to risk cable operator unhappiness by partnering with Google (note that the TV network partners are all cable properties - NBCU is about to be become part of Comcast).

And when you’re reading their blog post, note the verb tenses—lots of "will” and “shall”—suggesting some content partners may not necessarily be launch partners, but they will likely be deploying on Google TV shortly after launch. Based on conversations with my network contacts, launching a web site optimized for Google TV with Flash apps and HD Flash video is not technically challenging.

Here are the specific content partnerships Google announced this week:

Turner - Turner will produce Google TV-optimized websites for TBS, TNT, CNN, Cartoon Network, and Adult Swim. It is not clear if they will include full episodes (there are not many currently up on the web because ‘TV Everywhere’ is still a work in [slow] progress), but the sample screens show video clips from the shows;

HBO - HBO will produce an "enhanced website” version of HBO GO - the recently launched ‘TV Everywhere’ version of HBO (in that it requires authentication) that provides online access to a deep catalog of current and library content. Here's the gotcha: HBO GO only has a direct authentication relationship with Verizon. If you subscribe through Comcast, you have to access it through Fancast. If you're not with those two operators, you can't use HBO GO on the web. So initially, it's likely only Verizon HBO subscribers will be able to use the HGO GO Google TV app. No doubt significant consumer demand could drive other operators to work with HBO to open up access.

NBCU – NBCU (the same company about to be bought by a cable operator) will launch an Android app called “CNBC Real-Time” that will feature stock quotes and financial news presented as a wrap-around the CNBC live feed from the multichannel operator;

NBA – The NBA will launch “NBA Game Time,” an Android app "that lets you follow game scores in real-time and catch up on the latest highlights from your favorite team in HD.” Does it sync with NBA games on TV? Well, yes. You can run any web page or Android app with any TV show "picture in picture" style;

The New York Times, USA Today, Vevo - All three will be creating Google TV optimized sites. During a September TDG client workshop, I noted there are a variety of media companies that want to show HD video content on TV but do cannot currently get access. It is effectively impossible to launch a new linear TV channel (even Discovery had to cannibalize "Discovery Health" to launch the new Oprah network) and cable VOD is lacking the features required to support ad monetization. I expect other such announcements are sure to follow.

Other content partnerships announced by Google include:
- Amazon VOD (new news), Netflix (old news), YouTube Leanback (old news);
- Pandora, Napster - "Stream Music From The Best Speakers In Your House" says the Google video (I mentioned that usage case in June); and
- Twitter.

According to Google, more content partnerships are in the pipeline: “This is just the beginning. Over the next few weeks, you can expect to hear from more sites that are enhancing their web content for the television." Keep in mind, any content publisher can optimize a website for Google TV and show HD video with no (repeat, no) Google business or licensing relationship, not to mention that the technology to accomplish this is simple (as confirmed by broadcast network insiders).

I definitely feel like I could be over-enthused about this (which is very dangerous for an analyst), but I'm attempting to be as rigorous as I can about the tech and business friction issues for Google TV. They are there, but this week's round of announcements significantly diminished those, at least in my mind.