Posted by: crudbasher | November 9, 2010

More About Google TV Wars

The first Google TV sets have now hit the market, but many major networks are blocking their content from showing up on the system.  This of course is predictable since it’s helping Google and not the networks.

What is happening here is that it’s really hard to be a middleman on the net.  That’s what Google TV really is.  It takes the web streams of ABC, NBC and CBS and put it together in a Google interface.  Trouble is, the networks have their own streaming sites (that show commercials).

When the cost to distribute information in close to zero, then it doesn’t pay to aggregate the information anymore.  This is what happened to music albums.  When music was on physical media it made more sense to package a whole album’s worth of music on a disk. They are selling you one item. It costs them the same if it has one song on it or 12.  The difference is, they can charge $19 for the piece of plastic rather than $0.99.  Therefore the album replaces singles to a large extent. It allowed much higher profits.

Now the system has fallen apart.  People saw on Peer-2-Peer networks you can get music for free. (of course it’s illegal)  The point is, the economics were defined.  People buy music on iTunes mostly for convenience, not because it’s exclusive.

The major content producers (networks) are very nervous here.  They are desperately trying to keep the public perception that their content is valuable.  They see Google TV as the next iTunes and they are trying to get ahead of it.

The bottom line here is nobody has come up with a winning business model yet.  But, just because you can’t win, doesn’t mean you can’t prevent other people from winning.

I feel this is just delaying the inevitable.  The old media conglomerates are doomed.  Their profit margins are doomed.  The future of online media isn’t selling 1 million albums at $19 per item, it’s selling 1 billion songs at $0.99 per item.

  • google tv is being blocked

    tags: technology google paywall

    • It’s not clear why the networks are blocking Google TV, but it’s not surprising that the networks would block Google TV. If successful, the technology could threaten the current business model for broadcast TV including lucrative distribution and advertising deals. Reuters reports that Google is in talks with the networks to lift the Google TV block.
    • Blocking access to online video may seem like a prudent strategic move in the short term, but the fact is the networks will not thwart Google TV owners who know where to look. Since Google TV comes loaded with the Chrome browser, Google TV owners could just navigate to the many sites that catalog pirate streams of network television.

Posted from Diigo. The rest of my favorite links are here.

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Responses

  1. I agree, they are holding on to something that they will inevitably lose. The smart move would be to think innovatively about the situation and think about how to embrace this new model.


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