This week, The New York Times and The Wall Street Journal both reported on efforts being mounted by Google to launch an “Internet cable TV service” (an oxymoron). Joining Intel, Sony, Microsoft, Apple and others. Let’s look at them one at a time.
Intel is on the record as hoping to launch its own consumer Internet TV service, although in my opinion – even if they DO launch a service, which they insist they will – a service is not Intel’s true intention in that space. Instead, it’s another market-seeding effort – which Intel has done in the past with set-top box reference designs and software SDKs to drive that industry’s adoption of Intel processors. In other words, a retail TV service might be the icing on a different cake.
For years, Apple TV has been Apple’s entry into the streaming video player market space, and the TV vector of Apple’s device-content-software ecosystem. After many rumors have come and gone, Apple is now reportly “playing nice” in the pay TV industry sandbox. People forget that Apple has been on the side of Big Media for years. The same strategy worked for them with the music industry a decade ago. Also, most pay TV operators, premium pay TV programmers and TV networks offer apps designed to work on iPads, iPhones, and iPod Touch devices (and on the Mac via a Web browser). Steve Jobs became the largest shareholder of The Walt Disney Company when he sold Pixar to them. And now, Sky News, ESPN, HBO Go (among others) have launched apps designed expressly for Apple TV. Bottom line, Apple is both a friend and a friendly distribution channel; not a threat.
Then there are Sony and Microsoft. Over the past year, reports have had both of them taking runs of their own at being “Internet TV providers.” Sony’s effort sounds ambitious, but the rumor mill had gone quiet. They’d have some chance, by virtue that Sony is a media company (Sony Pictures) and the PlayStation is a content ecosystem; not just a game platform.
AT&T offered a special kit for Microsoft’s Xbox 360, to make it compatible with AT&T U-verse IPTV, although sales of that add-on have been suspended. Microsoft also offers branded apps from Comcast, Verizon and a number of TV programmers via Xbox Live. But Microsoft’s efforts to launch its own TV service by negotiating directly with TV programmers ran onto the rocks.
I was originally inspired to write this article because I started thinking how Google might have a better chance than any of these competitors. The TV networks are distrought over the fact that audience measurement for online video is not comprehensive, making advertisers leery of advertising in that medium. Meanwhile, 97% of Google’s revenue is from online advertising, so you’d think they’re onto something (See *** below). But a number of other TV programming distributors offer online platforms and already have relationships with the networks. Also, Google would expect a share of any ad revenue and is no friend of pay TV or broadband providers, particularly in cities where Google is building its own broadband service.
Not to mention that Google has taken other runs at the TV opportunity, most notably with Google TV, a noteworty technology that happened to be one of the great failures of high-tech marketing. Google TV cost Logitech millions of dollars, and their CEO his job. For its part, Google did nothing to correct the misperception that Google TV was a service, instead of the TV middleware that it actually was. [ Update July 26: Google has launched yet another TV device, Chromecast ]
So, here’s how I rank their chances at launching and sustaining an online TV service:
- Google: 0%, for having alienated the TV industry, which is highly resistant to change
- Microsoft: 0%, because they don’t instill confidence that they can succeed. Consider the recent launches of Windows 8, Xbox One, Surface, Windows Phone, and Microsoft’s exit of the IPTV middleware category (Mediaroom) only after becoming a leading supplier.
- Sony: 50% because they are working with TV industry players and because they are a content owner themselves. Also, they are in the process of revitalizing the Playstation ecosystem. [ Note: I previously was saying they had a 10% chance. ]
- Intel: 50%, because they appear to be trying to work within the parameters of the TV industry. If the retail service fails, it’s not the end because a service is only part of Intel’s true agenda despite what they say.
- Apple: 100% if they collaborate with the pay TV industry. Apple’s ecosystem is the broadest and deepest (albeit sans games). Also, Apple gets credit for having saved the music distribution industry’s bacon.
Samsung is a huge wild-card here. They have a device and in-home distribution product ecosystem and have been successful in extending Android into something useful, but Samsung has not announced any intentions of their own, other than partnering with content companies and distributors (pay TV, Redbox Instant and a few others)…
*** I’ve begun to think of Google Search, Android and Chrome as ad-malware. But that’s a whole ‘nother rant, for the next episode of “Why can’t I download that Android app without accepting its terms to track my location and phone usage?” I’m saying to myself “Get over it or switch!” and from my tone, you might guess my decision.