In case you missed it last week, Google announced its new TV service in Kansas City based on a gigabit, fiber-to-the-home network. Leaving aside the broadband component of the offering for this post, the new Google Fiber TV service relies on all-IP delivery (a la AT&T’s U-verse) and high-speed residential connections (a la Verizon’s FiOS) to package up TV in a new Internet-style fashion. Wi-Fi access, Netflix and YouTube are built right in. Everything is searchable (linear, on-demand, app content, etc.) and placeshift-able. And Google is already working on features like a button that lets you “plus one” a show, and the ability to let you tune to a new station from your social stream.
On the gadgety goodness front, Google is proffering a slim DVR Storage Box with two terabytes of storage, even slimmer client TV Boxes with Wi-Fi access points included, and a free (for now) Nexus 7 tablet with remote control application. Brent Evans (aka geektonic) notes that part of the old Sage TV team is also behind the Google DVR, which bodes well for its performance.
Google’s content deals fall squarely in the fair to middling range. The company has negotiated licensing (so far) with nearly all of the broadcast networks and several cable channels like Nickelodeon, Showtime and Discovery, but there’s no Fox, Disney or ESPN, which would be a deal-breaker in my house.
All of which leads me to where Google is headed with Fiber TV. After watching the cable market for years, and recent broadband build-out activity, I can make a few wild guesses… some of which may even turn out to be right.
Prediction #1: Google TV is not about TV
The margins in the TV service business stink right now. Retransmission costs are higher than ever, and Google doesn’t have the clout of a large TV audience base to give it a good negotiating position with programmers. Also, as Ryan Lawler points out, Google isn’t experienced in the customer service game, which is a big part of TV delivery.
Instead of getting into the TV biz for the long term, I’m betting that Google is launching the new service primarily to gain information – information like what it takes to make fiber-to-the-home deployments profitable, and what data you can collect from users when you combine IP-based television with other Googlicious services. After all, keep in mind Google’s mission statement: “To organize the world’s information and make it universally accessible and useful.”
Prediction #2: Google is creating another platform
Even though Google may not want to stay in the entertainment business, it no doubt sees a big opportunity in content management and analytics. These are both areas that the traditional cable guys (and TiVo) are trying desperately to get a handle on today, and they fall right within Google’s sweet spot of core competencies. There’s a lot of money to be made in advertising by anyone who can do a good job of organizing TV content and tracking viewer behaviors. Why shouldn’t Google create a management platform and then license it out? This is the perfect time to do it because operators are starting to make their own transitions to IP delivery. And Google has the credibility to sign on customers, plus a thousand and one ways to plug TV information into other data platforms. The mash-up opportunities are endless.
Prediction #3: Google’s best features will end up in other services
This one’s a no-brainer. Just like Verizon FiOS inspired the cable guys to step up their game, the Kansas City TV deployment will end up pushing feature innovation among the traditional providers. Google’s already working on ways to let users publish local content, it’s adding social features, and it’s expanding TV access to more devices. Not that everyone is going to rush to do all the same things at once, but ultimately the cable and telco TV guys will have to adjust to consumers’ new expectations. After all, this isn’t just web video anymore. It’s TV – something Americans love even more.