Google TV to launch this fall

But reluctant broadcasters are doing their best to ensure it fails to connect with viewers.

By InvestorPlace Aug 18, 2010 12:17PM

Television © image100/CorbisBy Anthony Agnello,

Television has come a long way since TV sets became commercially available in the 1930s, and the medium continues to evolve as the world gets more wired. Now you don't even need a cable to get "cable" from companies like DirecTV (DTV), and you can watch some of your favorite shows online whenever you want.


So what's the future of the telly? To hear Google (GOOG) tell it, viewers will start using set-top boxes to stream on demand, store show preferences and surf the Web from their sofa in between episodes of "Family Guy."


And the Internet giant is determined to get this next-gen technology on the market this fall, branded as Google TV.


Google TV is unlike other Internet television products and services, as it technically isn't a devoted set-top box or website like Hulu. It's simply a software service that allows viewers to search through programming from cable, satellite and Web providers. Of course, it also lets viewers browse Web pages on their television -- not a new feature or a surprising one but a function Google aims to streamline and make more than just a gimmick.

But there are some serious snags with this high-tech television revolution. First is that Google is just in charge of the software and needs third parties to get on board with building the hardware.  Logitech (LOGI) and Sony (SNE) are both shipping set top boxes sporting Google TV this fall to test the market – but you can bet they won’t hang on for long if they don’t see profits materialize.

Even more of a challenge for Google is that television's major players aren't on board. And who could blame them? Time Warner (TWX), Comcast (CMCSA) and every other cable provider in the country has had to transform from a classically styled broadcast platform to an on-demand portal in the post-TiVo (TIVO), post-YouTube world. Playing nice with Google would be like admitting that the industry has outlived its life cycle and is destined to become obsolete.

Given the trouble Google Inc. is having convincing major television networks to support Google TV, true Internet television might not be ready for prime time just yet. Post continues after video:

According to a Wall Street Journal report, Google has met with Fox, ABC, NBC, CBS and executives from every network and cable group under the sun. And none of them will join Google TV until they know Web-based services will not sap customers from their conventional revenue channels through broadcast television.

What’s more, a big move of viewership to streaming online content that doesn’t have as many commercials means less revenue for broadcasters -- even if that content is on instead of a viewer’s local NBC affiliate.

Another concern is that, unlike other services like Apple Inc (AAPL) software, including iTunes and Apple TV, Google TV wouldn't restrict options to specified services -- meaning a lack of a copyright bottleneck. If Google TV is as versatile a Web tool as Google's other products, it would be all too easy for viewers with Google TV-enabled set-top boxes to skip paying for premium cable and satellite services altogether and just watch popular shows illegally through pirated videos.

That’s one rough road ahead for Google. But the technology giant successfully broke into a crowded mobile phone market with its Android operating system and seems determined to redefine television as well. The $70 billion TV advertising market is natural for a company that is the 800-pound gorilla of online advertising.

As of now, though, it looks like Google TV may not reach its full potential when it hits the market via a fall 2010 launch. But it could very well see the technology explode in the years following.

Of course, Google TV may just be the latest in a serious of flops that have followed the 1996 launch of WebTV. And word is that Google's aggressive pursuit of launching Google TV by fall 2010 has content holders discussing whether or not it's time to block their Web video from playing on any set-top boxes -- killing the technology not just for Google but for anyone else.


The Internet may be the inevitable future of television, but Google has a tall order proving that future is now.


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