Networks resist Google TV as Apple switches on

Google has problems getting the support it needs to progress its Google TV plan, even while competing firm, Apple is quietly plotting its own path. For example, one analyst this week once again predicted Apple-branded HDTV's will appear within two years.

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Introduced earlier this year, the Google TV concept brings some of the power of the Internet to your front room.

That while doing so it also gives the search giant access to even more detailed information about you, your likes, and your dislikes may alarm some.

As fellow blogger, Preston Gailla remarked yesterday,

"George Orwell's dystopic imagination in 1984 couldn't ever venture this far. He imagined a government knowing everything about you. Even he didn't see that it might be private industry one should instead be scared of."

Reports in the Wall Street Journal today suggest Google is having a tough time securing support from TV networks. Meetings with ABC, CBS, Fox and NBC have all failed to secure material support.

Content owners just don't think Google has a business model which can compensate them for the potential cannibalization of their broadcast business.

Google meanwhile is attempting to convince content owners to allow Google TV to offer TV listings, at least. In future Google hopes its Google TV attempt will be able to play any video found online.

"That open pipe has some media companies worried that their content will get lost amid a range of Web content, including pirated clips, according to people familiar with the matter," WSJ informs.

Google has been able to win support from smaller video sites.

Apple meanwhile is thought to have faced similar problems with its next-gen Apple TV development.

iTunes seems set to morph into offering all-you-can eat TV subscriptions, streaming a user's choice of content to their device of choice for a set fee. That model could be Apple's advantage against Google, as it means content providers gain an immediate income stream to help compensate.

Previous reports have suggested Apple's Lala.com team have been focused on video.

As these chatterings continue ever more information on Apple's TV plan seems to be emerging. At present we now anticipate the device will offer small on-board memory and streaming capabilities.

The new device may cost under $100 and will be called iTV -- though that name may cause Apple many problems as it is the brand identity of the UK's second-oldest TV network. Executives at broadcaster ITV are said to be 'furious' and plan a legal challenge should Apple attempt to hijack their brand.

In future, Apple may launch an internet-enabled HDTV. Piper Jaffray analyst, Gene Munster, repeated his previous claims in a note to clients this week when he suggested these sets may appear within two years.

"Apple's ability to deliver hardware, software and content that could replace an entire entertainment system with a single TV, puts Apple in a unique position for the emerging connected TV cycle," wrote Munster in a note to investors.

The inevitability of convergence means IPTV-based systems such as those espoused by Apple and Google are set to soar in popularity.

Recent data from ABI Research claims IPTV will secure 11 per cent of the pay TV market by 2015. Worldwide pay-TV subscribers totaled 688 million at the end of the second quarter of 2010.

Naturally, for both Apple and Google, the secret sauce may turn out to be the apps. Apple's TV efforts are expected to support and run iOS apps, including games and more, while Google's will run some Android apps.

While the user interface needs to be resolved, the former partners clearly hope that the attraction of offering top quality games and other useful apps along with access to all the TV or other media content you can imagine wanting will build the market.

The TV app economy is poised to grow from a $10 million market to $1.9 billion by 2015, according to GigaOm Pro.

Google's TV team have published the following paen of praise for apps on TV to their SXSW 2011 Panel Picker page.

"Apps unlock the potential of an Internet-connected TV because they create new ways of converging TV programming with the whole web and its promise of social, video, gaming and beyond. The smart phone revolution occurred not because of the integration of web and phone, but because of the enhancement that came from combining the web and the information available inside your phone – location, contacts, cameras, etc. – into robust mobile apps. The same will be true for TV. Apps will be successful because of their ability to leverage the TV's context: huge screens, great speakers, TV show metadata, social contacts and more. At a basic level, apps will bring the cloud to the TV as users engage with their photos, music, interests and friends."

This all sounds lovely, but broadcast content makers aren't happy with Google's plan.

As the L.A. Times explains, they fear Google TV will increase piracy, that it won't pay, and that it will encourage consumers to abandon their $79 cable and satellite subscriptions. (Which is exceedingly likely).

The Google Apple difference is their very diverged attitude toward content.

Apple has already proved it is happy to charge for content via iTunes; Google as yet has zero significant retail experience, and its ads-based free business model gives content providers in the broadcast TV space serious concerns.

After all, those ads Google's serving are the ones the networks also want to serve. And with networks manufacturing the majority of popular television programming, they aren't happy to earn less for their content while giving Google access to even more profitable data.

Google may have to develop a new business model in order to achieve success for its television attempt. Apple meanwhile has a profit-center-based plan, but suffers from industry mistrust.

Broadcasters are looking to the music labels, who all complain Apple has too much control thanks to its iTunes dominance.

This even made it to EMI's quarterly report this afternoon, in which the UK major label warns that the music industry is at risk due to the:

"Substantial dependence on a limited number of online music stores, in particular the iTunes Store, for the online sale of music recordings, and the resultant significant influence that they can exert over the pricing structure for online music stores."

How will this play out?

I suspect Google will have a tougher time than it thought both leading its product to market and popularizing its service among consumers.

Apple faces similar challenges, with both parties attempting to make their TV accompanying box an absolute essential.

I'm not dumping my cable subscription yet.

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