Posts Tagged ‘apple tv’

Will Google TV Destroy TV?

May 28, 2010 11 comments

(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?