Summary:

A year after the much-hyped launch of *Google* TV with partners Sony (NYSE: SNE), Logitech, Intel (NSDQ: INTC) and Dish Network (NSDQ: DISH)…

Movie Tv App
photo: Google

A year after the much-hyped launch of *Google* TV with partners Sony (NYSE: SNE), Logitech, Intel (NSDQ: INTC) and Dish Network (NSDQ: DISH) — and disappointing reception, Google (NSDQ: GOOG) is upgrading the software and resetting expectations.

The over-the-air update starts this week on Google-TV enabled Sony TV and Blu-Ray players, then moves to the Logitech Revue set-top box. But Google will miss the all-important holiday season when it comes to new hardware, instead waiting for 2012. The company says it has deals in place for new devices at “new pricepoints.”

The settop was overpriced, launching at $249, the remotes for both Sony and Logitech were clunky and ultimately, the experience was underwhelming. (Logitech cut the price to $99 over the summer after more were returned than sold.) It didn’t help that programmers like Viacom (NYSE: VIA) and Fox (NSDQ: NWS) and online video hub Hulu blocked access from the Google TV web browser, insisting that Google TV required distribution agreements.

On the plus side, Google says time spent on YouTube use doubled when users switched from computers to TV screens. The investment YouTube is making in original content is aimed squarely at increasing “TV” programming that comes straight from the web.

In line with that, this version of Google TV includes a custom YouTube experience, including tight integration with Google TV search and what Google says will be easier access to HD-quality video.

The “new” Google TV also has a TV & Movies app to search across multiple sites, including Netflix (NSDQ: NFLX), Amazon (NSDQ: AMZN), cable, and satellite. That’s not exactly revolutionary but if it works well could take the place of some official programming guides.

The update also aims to simplify the experience and open the development to third-party solutions that will let people use Android smartphones and tablets to run connected devices. The Android Market for Google TV is a stripped-down version — no telephony, touchscreen or GPS apps — and the number of developers to start is very small, only 50.

On the less-simple side, Google TV also runs Google’s browser OS Chrome — well, some of it. The majority of Chrome apps are supposed to work; Chrome extensions won’t.

Google TV project lead Mario Queiroz and Vincent Dureau, director of engineering, offered the party line in ablog post: “The initial version of Google TV wasn’t perfect, but launching it gave us the opportunity to learn.”

We’ll hear more about that from Queiroz, the VP of product management, in an interview at paidContent Entertainment: Everything Everywhere this Thursday. (Disclosure: Google TV is also a sponsor of the conference.)

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