Why the World Needs Google TV

Google TV will be important, and could be revolutionary — but not for integrating the web into TV. Far more important than its built in browser is Google’s ability to bring apps to the living room — and to even possibly do it at a scale that could lead the app economy on the television.

Google TV isn’t the first platform for app development: Yahoo (s YHOO), Vudu (a WMT), Roku, Boxee and even Samsung created platforms for app development on the TV. But it’s probably the best hope for video publishers who want to conquer what is an extremely fragmented market of walled garden environments.

The big problem for content owners that want to publish video on Internet-connected TVs and Blu-ray players is not a matter of technology, but a matter of scale. There are tools to build compelling user experiences that can be watched on connected devices, but the market right now is incredibly fragmented. Right now, all of the major consumer electronics manufacturers — Sony (s SNE), Samsung, LG, Panasonic and Vizio — have different user interfaces for accessing over-the-top content. So too, do the Microsoft (s MSFT) Xbox 360 and Sony Playstation 3 gaming consoles, Roku and (upcoming) Boxee broadband set-top boxes as well as TiVo (S TIVO) DVRs.

If, like Netflix (s NFLX), a video publisher wants to reach multiple devices, it has to strike deals, build a custom UI and integrate with all of those different CE companies, a decision that is extremely expensive — especially when one considers the potential audience for each of their devices. And that’s not even taking into account the number of encoding rules, video formats and file types that are required for all the different devices, or the storage required to support multiple files that can be delivered to all of those devices.

This is one of the reasons that you don’t see broadcasters like ABC (s DIS) or CBS (s CBS) rushing out to develop apps for online video services on TVs, Blu-ray players and other connected devices. Developing for the over-the-top TV market today is akin to developing for the mobile sector years ago, before the market started to standardize on a few distinct operating systems and development platforms like iOS, Android and Blackberry.

But TV apps will soon be big business. Despite only bringing in an estimated $10 million in 2010, the TV app economy is set to grow to $1.9 billion by 2015, according to a forecast by GigaOM Pro (subscription required). Which is why the online video industry needs a company like Google to create an operating system and development platform like Google TV and Android, to make it easier for developers to create a a single app that can be re-used across multiple devices from multiple CE manufacturers.

For each new CE manufacturer that signs on to support Google TV, you add a much larger customer base that developers can reach with a single application. Just as a developer can build an Android app that could be used on an HTC Hero, EVO, Incredible or Droid, the promise of Google TV is one day a developer will be able to write one app and reach Sony, Samsung, LG and Vizio customers all at once.

Of course, Google TV still faces a number of hurdles: For one thing, the company needs to convince other CE manufacturers to adopt its new OS for connected TVs. And early reports are that the system is expensive to implement, due to the processor and dedicated RAM that are required to make it work, which could make the products prohibitively expensive for consumer adoption. But if it is able to succeed, Google TV could help usher in a whole new market for innovative TV apps.

Related content on GigaOM Pro: TV Apps: Evolution from Novelty to Mainstream (subscription required)