Content is king in the TV world, but delivery mechanism is shaping up as a serious contender, according to Google (Nasdaq: GOOG) chairman Eric Schmidt, who, in a presentation at the annual Edinburgh TV Festival, told broadcasters they must prepare for disruptions to their business models as new players enter the field. (See: Axis of Distrust: Internet, Google & TV, Part 1.)
Some of the new content providers will be the same viewers broadcasters market to, but companies like Google and Apple Inc. (Nasdaq: AAPL) will be fighting for a share of the advertising and sales revenue. Here are the points made by Schmidt in his presentation:
TV and Internet convergence is here:
TV will not change the Internet; rather, it will have to adapt to the realities of technology by embracing the Web. The Internet will change how TV programs are delivered, affect content creation, and add a new layer of social interactions that broadcasters haven't been as quick to embrace.
TV needs the Internet, and Google needs TV:
Schmidt didn't exactly put it so bluntly, but it was clear the company is making a play for a role in the distribution of TV content and wants to help shape viewers' contribution to content. Apparently, the tube still dominates leisure time usage globally. In 2010, "UK adults spent as much time watching TV in 4 days as they did using the Web in a month," Schmidt said. "TV is still clearly winning the competition for attention."
Google wants viewers to spend some of that time watching the ads it transmits, and the best way to do this is to change how broadcast content is filtered. The Internet, he said, is the perfect tool for doing this because "technologically, the Internet is a platform for things that traditional TV cannot support."
Google does personalization well; broadcasters don't:
TV content is mostly pushed from broadcasters to a largely passive consuming audience, but Google believes the growth of social media and the technological advantages offered by the Internet should make it easier for viewers to suggest, determine, and even create the type of TV content they want to watch. Google sees opportunities in aggregating user data (something it does very well) and helping consumers communicate preferences to content distributors.
Obviously, Google isn't currently getting as much information about TV viewership and the demographics of the audience as it does with the Internet audience. If TV content can be pushed more vigorously over the Web, Google would then be able to aggregate the data, Schmidt hinted.
Privacy fear will not hinder the marriage of TV and the Internet:
Google knows a lot about privacy concerns; the company has faced numerous complaints globally from individuals and governments over how it collects, stores, and uses consumer data. To allay any fears about its foray into the TV world, broadcasters and data aggregators would have to "strike the right balance, so people feel comfortable and in control, not disconcerted by the eerie accuracy of [content] suggestions." Schmidt added: "Of course, no matter what I say, there will always be some who fear the Internet is set to destroy everything."
In the end, Schmidt -- for all the self-serving admonitions he doled out -- is still right. Just look at the statistics and the reality of technological advancement. People are increasingly consuming content on the go, rather than seated in front of a dumb screen. Smartphones and tablet PCs, for instance, have opened new opportunities for consumers to watch their favorite programs anywhere.
Viewers are generating more content for outlets like YouTube than traditional broadcasters can ever hope to create, drowning us in information and necessitating the intervention of data miners like Google. With two hours of video being uploaded to YouTube each hour, most of the world will never see one percent of the information they might have found interesting, unless companies like Google and Yahoo offer a way to identify their likes and dislikes and tailor content to match these needs.
@Himanshugupta I have a wireless router for broadband connected to my phone line. Many new TVs, Bluray players etc. connect seamlessly to the router and connect to content providers with little effort. The system works great.
@ Barbara, Thank you for your contribution.I am glad you found the topic interesting. I agree with you that "appointment TV" is past is sell by date. Hence the need for Google TV's innovation. I like the idea of content personalisation. It is truly worth watching and I hope is a success.
"What will happen to the content once the TV and internet converge is upto one's imagination. The innovative ideas are required to make the internet TV something unique and not just internet browsing available on TV"
@ prabhakar_deosthali, you have raised a good. Google TV is not only pushing internet browsing on to TV, it is providing the platform to combine web browsing and TV simultaneaously. It is bringing together all the information, programme, internet and media surrounding whatever you've searched for. This is unique and innovative. Google have been in this service business long enough to understand what its customers want and how to keep its customers satisfied. Hence content wise, I hope Google TV will keep the pace and continue to evolve. It is a wait and see game.
@ elctrnx_Iyf I agree, Google TV will be embraced by the viewers as it opens up varieties to search all content on TV as well as the internet. TV channels will definitely have a challenge on their hands. I hope Google TV will be a success
If google gets successful with the google TV then all the regular brooadcasters will become a mere content provider to google since all the advertisement will be controlled by google. Bad news for the TV channels but definitely a great innovation for the tv viewers.
Excellent post on a topic I haven't thought about. I think Google has a point, and "appointment TV" is rapidly becoming a thing of the past. I use On Demand now rather than schedule my life around programming (and I plead guilty to having done so in the past.) And tailoring programming to a specific audience is brilliant. This evolution is worth watching.
What will happen to the content once the TV and internet converge is upto one's imagination. The innovative ideas are required to make the internet TV something unique and not just internet browsing available on TV
Like somebody has suggested if e-commerce can be clubbed iwth TV commercials then it could lead to the new ways to do ebusiness. Clickable adds will lead to the interactive sites where the consumer go go through the detailed product catelogues and make his buying decisons on the spot.
@flyingscot, i heard that companies were working on integration of internet into TV but did not know that its already available. Do you have to have a separate internet connection or its bundled with the cable subscription? I know that Samsung (and maybe others) are working on TV based e-commerce software tool. So, you can do the shopping while you watch an ad for a product and like it. It will save some money for both consumers and suppliers as the distribution channels will be shorter.
Anna, thanks for a good follow up to part 1 and what a nice sales pitch by Schmidt. It is also impresive to see all the capabilities of elctronics and its possibilities described by Flyingscot.
My question is, what is the estimated income from this sector of e-commerce by Google?
The new government rules and regulations may prove to be a double-edged sword: achieving some positive goals but costing organizations a great amount of money and work and, perhaps, lost sales as well.
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