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Google Attempts to Disrupt TV Business with Google TV – Will it Work?

Google took the wraps off its Google TV product yesterday, and there’s a lot to digest. Google TV is attempting to bridge the web to the TV and become a portal for not only OTT video, but to the Internet itself. It’s a concept that’s been tried before (although earlier attempts were not nearly as robust as this latest one), but for all intents and purposes, ‘web TV’ has been rejected by the marketplace. Has Google learned those lessons and got it right this time?

Google TV will launch later this month, albeit with limited availability. Consumers will have to initially choose between a Logitech Google TV STB, the Logitech Revue, or a Google TV enabled Sony TV (which doesn’t require a STB). Other platforms are in the pipeline.

Google unveiled a variety of applications and content partners for the initial launch. Like its forthcoming competitor, Apple TV, Google TV will launch with a series of TV apps, essentially turning the TV into a smart device. Early on apps will include Netflix, VEVO, Twitter, CNBC, Pandora, Napster, NBA Game Time, Amazon Video On Demand and YouTube Leanback, among others.

Since Google TV is built on both Android and Chrome, it will also have access to thousands of Android apps, although not immediately. Google is also opening up Google TV to developers, encouraging new app development for the TV. One of the more compelling apps will be video chat apps like Skype TV and others. In effect, video chat apps can turn everyday TVs into consumer videoconferencing devices.

[youtube]http://www.youtube.com/watch?v=ZDeX_oIfEeQ&feature=player_embedded[/youtube]

Google also announced a series of content partners who they’re working with to optimize content for Google TV. These partnerships offer some interesting features, including:

  • Turner Broadcasting has been hard at work optimizing some of their most popular websites for viewing on Google TV, including TBS, TNT, CNN, Cartoon Network and Adult Swim, available anytime through Google TV.

 

  • NBC Universal has collaborated with Google TV to bring CNBC Real-Time, an application that allows you to track your favorite stocks and access news feeds while enjoying the best financial news from CNBC directly on the TV screen.

 

  • HBO will bring access to hundreds of hours of programming to Google TV with HBO GO. Authenticated subscribers will soon be able to access all of their favorite HBO content on-demand in an enhanced website for Google TV.

 

  • NBA has built NBA Game Time, an application that lets you follow game scores in real-time and catch up on the latest highlights from your favorite team in HD.

So, what to make of all of this? There are a lot of implications to discuss. I offer some thoughts below:

  1. Is the market ready for this? This is really the billion dollar question. There’s a lot of compelling features associated with Google TV, but the platform may just be too confusing for everyday consumers. The use of Google TV really requires a paradigm shift in TV behavior. Consumers are used to just turning the TV on, and surfing channels, DVR and VOD content. Google TV adds a fair amount of complexity to that experience – so much so that I wonder if the masses will make this paradigm shift. Certainly some will, but will enough do so to change the current TV business model? After all, who wants yet another STB in the living room? As I said – a multi-billion dollar questions.
  2. Google is stepping up their marketing and presentation. I think Google has learned some lessons from the past. Google TV isn’t the first attempt by Google to disrupt an existing business model. But one thing I’ve noticed early on with Google TV is the presentation and marketing. They’ve created a slick new Google TV website for example, something they historically have not done with other product launches. They’ve very much had a ‘build it and they will come’ attitude with previous products (Nexus One is great example). This is Google after all – we should all be privileged to spend our money with them seemed to be their attitude. I sense a change with Google TV though. It looks like they intend to step up the marketing effort significantly, which may impact its success. I suspect Apple’s success has something to do with this.
  3. Where’s the customer service? One knock on Google for past product launches is their lack of customer service. After all Google’s idea of good customer service is email and chat/forums. That simply won’t cut it for TV services. When TV doesn’t work, customers want answers now. They don’t want to send email. The customer service issue is even more intense for this product, given its complexity. Who will answer that customer service call? Google has failed miserably at building the type of customer service infrastructure necessary to support this type of product. Has that changed?
  4. Google TV isn’t cheap. Unlike other Google products, many of which are ‘free,’ Google TV has a cost associated with it – maybe a significant one to some. Exact pricing hasn’t been revealed, but I estimate somewhere between $200 and $300 for the standalone Google TV STB, and a similar premium for TVs with Google TV embedded in them. As I said, the features are compelling, but are they that compelling?
  5. It’s a pretty crowded marketplace already, with more entrants to come. Google TV joins a plethora of third party TV players already, including Boxee, Roku, TiVo, and others. Then there’s that little pesky outfit called Apple who will soon join them with a revamped Apple TV product. The TV manufacturers themselves are trying to carve out a niche of their own as well, with connected TV offers from Vizio and others that question the need for Google TV. Is there enough business to go around? I tend to think not. Something will have to give and we will see some consolidation (and outright bankruptcy) among some of these players. Will Google TV be among the winners?

There’s certainly many more implications to discuss, but I’ve already violated the cardinal rule of a blog post – keep it brief. Please do share your thoughts on implications and the overall Google TV effort in the comments section below.

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