Google TV: Dumb Content vs. Content is King

October 7, 2010

Why are the Big Four networks Fox, NBC, ABC, and CBS, not flocking to Google TV, the largest digital video distribution network in the the world — by far? And why did Forrester’s analyst characterize Google TV’s programmer sign-ups to date as “underwhelming?”

The core reason is a profound vision and business model clash between existing programmers/distributors and Google Inc. Why?

  • Programmers/distributors have long believed “content is king,” while Google has long believed in free information or “dumb content” over “dumb pipes.
  • Programmers/distributors want to aggregate audiences to enhance the value of their programming to demographic groups, while Google wants to disaggregate competitors’ audiences in order to enhance the value of particular Google-targeted information to individuals.
  • Programmers/distributors have long known there is great value in combining proprietary content with competitive distribution, and shows/channels with competitive brands, while Google has long known it can capture most all the value of Internet content for itself alone, if it can define competitor’s combining of content and distribution as anti-competitive and a violation of “net neutrality” and an “Open Internet,” while simultaneously defining its own combination of the world’s free content with the world’s largest distribution/advertising network — as pro-competitive, net neutral, and an Open Internet.
  • Programmers have long seen value creation in creating, aggregating, and advertising great content around brands and group appeals, while Google sees value creation in treating all the world’s information as a free commodity, where value is harvested only when individuals discover the info via Google search, and act upon it with a click, and only when Google mashes-up the free content with new Google product/service features.
  • Programmers/distributors have long known that intellectual property rights (copyrights, trademarks, patents, trade secrets) are integral to capturing the value that they create, while Google has long claimed the broadest fair-use freedom imaginable and ignored most digital property rights of others — leading to infringement lawsuits from most every content industry.
  • Programmers/distributors and the law have long viewed content distribution contracts as pro-competitive, pro-innovation, and integral to a functional free market, while Google views having to get permission to copy, store, use, and monetize others’ content as anti-competitive, anti-innovation, and anti-free-speech.
  • Programmers/distributors have long viewed property protections as sensible, responsible, and lawful actions of any property owner, while Google has re-defined property protections of its competitors, (Apple, programmers, and distributors,) to be “closedness” and evil, and Google TV and all that Google does to be “openness” and “good.”
  • Programmers/distributors recognize a competitive content market needs unbiased independent third parties like Neilsen to score audience size for advertiser-content monetization purposes, while Google sees no conflict of interest in being content player and referee, and advertising scorekeeper and paymaster, all-in-one — with no transparency or third-party accountability.
  • Programmers/distributors want to promote “TV Anywhere” so anyone who has paid for the content can view it on any device, any place and anytime they want — so they can maintain their group audience model, while Google TV wants to track your Internet viewing anywhere and everywhere so not only can they target an individual based on who they are and what they want, but also where they are at any given moment in time.

Simply, top programmers/distributors are not partnering with Google TV because they know that previous “partners” of Google have had their businesses, business models, pricing and confidentiality seriously undermined and compromised by partnering with Google.

Many would be surprised to learn that before Google TV officially launches this fall, Google TV already dominates world Internet video distribution. Per ComScore July 2010:

  • Of the unique world Internet audience, 80.4% use Google-YouTube, while the next largest audience use is Yahoo with 30.9%, and the top use of the big four is Fox with 21.4%.
  • Of all Internet viewing sessions, 36% are Google-YouTube, 4.6% are #2 Yahoo, and 3.1% are Fox, the top big four programmer.

Why is Google TV already a de facto monopoly platform or “monocaster?” Do the following math:

  • Add Google’s world dominant search and search advertising platform, (which is the functional TV equivalent of a remote control and TV Guide for Internet video all in one;)
  • To Google’s world dominant Internet audience, about 620 million users daily and a billion users weekly;
  • To Google’s world dominant network of advertisers and publishers;
  • To YouTube’s world dominant software and Internet videocasting infrastructure;
  • To DoubleClick’s world dominant ad-serving software, display analytics, and Neilsen-like tracking and viewing measurement;
  • To Admob’s world dominant mobile in-app ad-serving software;
  • To Google’s free Android operating system, the world’s fastest growing mobile operating system; and
  • It equals the world’s dominant monocaster with:
    • 80% of the Internet video viewing audience;
    • 2 billion daily Internet video views;
    • 2 billion weekly monetized Internet video views;
    • 160 million mobile daily Internet streamed views;
    • 45 billion ads served daily; and
    • 94 of the top 100 Ad Age advertisers as clients.
      • Simply, no one else in the Internet video business, is in the same competitive solar system with this nascent Google TV monopoly.

In sum, top programmers and distributors to date have wisely not forfeited control over their businesses, business models, customer relationships, pricing/value proposition, and confidential information by outsourcing their Internet video businesses to Google TV.

  • They appear to have learned from the “dumb content” lessons that newspapers, books, maps, and many other industries learned the hard way — to not fall for the smiling pitch: “We are from Google, we are here to help you...”

Lastly, the long-held truism that “content is king” can only be true in a competitive market that respects intellectual property, not when a monopoly that describes itself as “the biggest kingmaker on this earth” sits a top the Internet video distribution throne.

 

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