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Broadcasters Block Google TV But Can’t Stop the Future

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It was no big surprise that broadcasters like ABC, (s DIS) CBS (s CBS) and NBC (s GE) would block Google TV devices (s GOOG) from accessing their content online — or at least, it shouldn’t have been. What’s at stake, of course, is the $80 billion TV advertising business that fuels the creation and distribution of prime time TV.

Over the past several years, broadcasters have been trying to figure out their web strategy through the creation of Hulu and making their TV shows available on-demand for free on their on websites. Web clips and full-length episodes started to appear a few years ago, in part, because broadcasters realized that if they didn’t make them available in a way that they could monetize, people would find ways to get at the content in a way broadcasters couldn’t monetize. They would pirate those shows. At that point, it wasn’t just a matter of digital pennies and analog dollars — it was a matter of getting any amount of money at all for content that consumers would otherwise download and watch for free.

That online video experiment has turned into a real and growing business of its own. Web video isn’t ready to supplant the broadcast advertising business, but it’s no longer a matter of digital pennies — we’re at digital dimes and nickels. Maybe even quarters. Still, to broadcasters, it’s chump change compared to what they make on broadcast TV advertising.

And let’s not forget about retransmission consent — broadcasters are increasingly asking cable providers to pay up for delivering signals that consumers used to get free over the air. Disputes over those fees have become ever more contentious and led to more TV blackouts this year than in a decade, including the recent blocking of Fox (s NWS) television to Cablevision (s CVC) subscribers. But why should Cablevision pay Fox to air its shows when is freely available through someone’s brand new Sony (s SNE) Google TV set? (As an aside, for this reason alone it seems strange that Fox is the only broadcaster not currently blocking Google TV from accessing its full-length episodes online.)

The problem arises when the TV is just another screen for viewing web content — and that’s where Google TV comes in. In theory, Google TV really isn’t that different from hooking up your PC to the TV. And anyone who’s gone through that arduous process knows that there’s really not much keeping you from accessing Hulu, or any of the other sites except the inconvenience of managing different cords and monitor settings necessary to do so. But that’s changing — PCs even come with HDMI outputs nowadays, making the process that much simpler.

Of course, Google TV’s whole raison d’etre is to bring web content to the TV. Not just that, but Google TV is trying to make web content available alongside your TV viewing. In other words, to make it drop-dead easy. But when you make it drop-dead easy to watch a full-length web episode of Modern Family on the TV via the web, what’s to stop a user from skipping the broadcast altogether?

The truth is that users are skipping the broadcasts anyway. We’ve covered study after study showing that viewers — especially young viewers — are no longer tuning into their favorite TV shows at a set time; instead, they’re increasingly using DVRs, online video and even mobile devices to watch content when they want and where they want. It’s too easy to blame online video for accelerating a shift in behavior that viewers were making anyway. And it’s too easy to block Google TV access simply because it allows a user to get freely available online content on the TV.

For broadcasters, picking a fight with Google TV, or Boxee, or holding their content back from being rentable on Apple TV (s AAPL) isn’t going to change this fundamental shift in user behavior. What they need is a strategy that allows them to gracefully embrace — and monetize — the new ways that viewers are accessing their content, whether it be on a DVR, on the web, or on a mobile device.

The funny thing is that Google TV should be able to help them do this. Theoretically, Google TV should be able to provide them with all of the advanced demographic and audience behavior data that they currently don’t get from Nielsen ratings. It should enable them to provide better and more relevant ads to their viewers, creating a higher-value business for online video than they have already.

Sure, in the short term it won’t replace the broadcast TV dollars they receive. But with audiences shrinking and getting older, broadcasters need a plan for reaching out and finding audiences where they are, not blocking them from viewing the content they actually want to see. Which is why blocking Google TV — or any device, really, for online viewing to the TV — is short-sighted, at best.

To learn more about Google TV’s side of the story, come see Google product lead Rishi Chandra at NewTeeVee Live on November 10 in San Francisco.

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28 Responses to “Broadcasters Block Google TV But Can’t Stop the Future”

  1. Bourgoise Pig

    I refuse to pay $100 a month for a cable/satellite tv “package” of shows that I absolutely do not want. Of the hundreds of channels available, let me choose three and pay you $10 a month to watch them. People are waking up. In this economy, why pay $100+ dollars a month to watch tv – especially when most of the offerings are garbage?

    If pay per view was never popular with cable tv consumers, how then is charging one to two dollars per episode for “on demand” video supposed to work? For example, if my child likes to watch the same episodes of Gumby over and over and over again, do you really think that I as a parent will want to pay to view the same episodes over and over and over again? If broadcasters move to a pay-per-view model, I would become very picky about what my child gets to watch.

    Time spent playing video games or surfing the web is time that is not spent watching cable/satellite tv shows. Block us from watching certain tv content, and we will play more video games, spend more time texting on our cell phones, or do more web surfing.

    We will not see reform in the TV industry until viewers drop their overpriced cable tv and satellite tv subscriptions en masse. Hey TV executives, have you learned nothing from the demise of the newspaper industry? I will soon subscribe to Netflix and say goodbye to tv forever. By the way, where is the army of lawyers to protest the policies of internet “data usage metering?”

    This post is a great example of how consumers of TV can write a post about the future of the TV industry.

  2. Do you know anything at all about the broadcast tv business ?

    Advertising ? Its not even a consideration in blocking shows. They can price the advertising and set the number of ads in a web streamed show as easily as they can in a broadcast show.

    What is at stake is the financial relationships between broadcast networks and tv providers and broadcast networks and their affiliates.

    Broadcast nets are now getting BILLIONS of dollars from TV providers. Money they didnt get just 3 years ago. For some, just 2 years ago.

    So in the last 24 months they take billions from tv providers (directv,comcast, etc) and you think its smart to give those customers of their the finger and offer the same product online ?

    thats moronic


    • A true issue. But the question here is about blocking access to GoogleTV devices, but still offering the content on the Internet for free (meaning: ad supported). If no broadcaster offers any content on web, it would be a different question, but they do to “regular browsers”. It is about the back flips the networks/Hulu have taken to prevent that browser device connecting directly to TV. PC good, TV bad. Such technical tricks ignore the issue you point out re: business models.

    • There is already a model that works for the most part.

      Google, and for that matter, Apple, Samsung or anyone with the cash can accelerate this transition by paying for content like the operators and distributors.

      When Verizon and AT&T got into the TV business not that long ago, they paid for the content. This isn’t much different. Netflix, for example is playing within the system and seeing success.

      There is some fundmental tension here between viewer choice and control, and flexibility in the payment tiers and packages for TV. But those aren’t technology problems (except for the arcane cable billing systems) anymore and they will be fixed over time. I think we’ve got five years until everything is on demand and available across any screen.

      Personally I’d like to see TV escape the fate of some of the media that mis-managed the digital transition.


    • Michael

      The broadcast networks may be getting billions today from the TV providers, but that gravy train is headed for a head-on collision. It has caused cable and satellite pricing to go up so much, people are saying “screw it”, and dumping the entire subscription.

      Newspapers use to be an empire, too. Have you seen the Hearst Castle? Now look at them. Look at the record industry. If the TV content providers don’t get the eyeballs any way they can, and SOON, there may not be any left.

  3. broadcast tv just doesnt get it. anyhow, i got a HTPC till such time the ‘dust’ settles down.. and no tv channel can block me..

    ..relatively new startup ivi tv is providing packages a-la-carte.. waiting for them to stream the-otherwise-‘cable’ channels…

  4. Scott Jensen

    It all boils down to a profitable business model. If one can be created, the shift will be lightning fast. If not, there’s every reason for the broadcasters and cable networks to fight it to the death.

    If Google really wanted to cause the shift, their focus should be on coming up with that business model. Be an ally and not a foe of the broadcasters and cable networks.

    • IF a profitable business model can be created? One can and WILL be created. The only question is who will do that.

      When the existing entities fight the inevitable change, they only hasten their own decline.

  5. What is the strategy of these networks? Bury your head in the past and ignore the unstoppable transition to web based tv? I kind of understand the reluctance to hand over all power to Google but they show no vision of their own. This can not be good for the launch of GoogleTV either.