Google is considering the possibility of launching an Internet-based TV service, according to numerous media reports.
Specifically, the company has approached several media companies about the possibility licensing of content for an Internet-based TV service that would stream traditional TV programming, The Wall Street Journal first reported, citing people familiar with the matter.
Google has reportedly also talked with programmers about the initiative, including providing a demonstration.
Google did not respond to our request for further details.
‘Over the Top’ Services
Google is not alone in its Web TV plans. Earlier this year, Intel confirmed it was working on something similar, and both Apple and Sony reportedly have like-minded initiatives under way.
Online-video providers including Hulu and Netflix as well as online retailer Amazon, meanwhile, have been competing for eyeballs with their respective on-demand TV services.
This is not the first time Google has considered rolling out such a service, however. Two years ago the company reportedly began discussions with media companies with that goal in mind. That plan was shelved, but the changing marketplace for “over the top” services — those delivered on top of existing broadband connections — as well as growing interest from corporate rivals could make for a very different landscape this time around.
Then, too, there’s Google TV as well.
It almost seems as if Google is hedging its bets when it comes to delivering video.
“That is one way of putting it,” Dan Cryan, director of digital media at IHS iSuppli, told the E-Commerce Times.
It also has the potential to be highly disruptive in the ever-changing market for video content.
“The prospect of launching an over-the-top play would create increased competition in the market,” Cryan said. “There are those that aren’t too anxious for this to get off the ground.”
Whether that happens, however, will depend at least in part on the many issues that will still need to be resolved. Perhaps most significant are the fees that any service provider will have to pay for the content.
‘Different Business Models’
“It is a significant barrier to entry,” Erik Brannon, senior analyst for U.S. television at IHS iSuppli, told the E-Commerce Times. “If you think about the fact that carriage fees are likely to continue their upward trajectory for the significant future, then it could take a while to reach profitability.”
Most of the major TV providers, including cable, telcos and even satellite, now offer bundled TV and Internet services, and those bundles are increasingly being taken up by consumers.
“As a general rule, buying services in a bundle is cheaper than buying services broken into their various offerings,” Cryan noted. “Google, however, is already in the content aggregation business as they own YouTube.”
Of course, while Google does have YouTube, it is trying to be more of a Comcast or a Time Warner in its ability to deliver a slew of channels, while the likes of Amazon and Netflix are looking to deliver content.
“While these are obviously competing for time and money, they have different business models,” Cryan explained.
For Google, though, the potential benefits are many.
“It is important how it ties to YouTube and to Android and how it ties off to any Android living room device,” Cryan suggested. “There is the potential for a rich ecosystem for Google.”
National reach could be another key factor.
“Google is an international brand, but they could be nationwide from day one as an OTT service,” Joel Espelein, senior analyst at The Diffusion Group, told the E-Commerce Times. “Even today the various service providers are only in select markets.”
The Search Connection
Last but not least, integration with Google’s core services — namely search — could make Web TV a particularly natural fit.
“Searching for a show today doesn’t mean you can actually get it,” Espelein pointed out. “You can search for a particular show, but can’t necessarily get it and watch it. This limits the value of search and the search engine thus becomes meaningless if the TV content is behind the paywall.”
So, Google’s latest move could be “a hedge against that world, where it can have its own video service,” Espelein concluded. “Then it can deliver amazing search results for that content. Google would be crazy not to be exploring ways to directly include premium video content within its ecosystems.”