Google TV Rocks Media World

Tensions are rising between mainstream TV networks and Google, with word on the street that ABC, CBS, and NBC are blocking their programming from viewership on Google’s new Web-TV service.

This phenomenon of competitors joining forces to fight a common foe reinforces the growing controversy between technology giant Google and traditional media companies. There’s distrust both ways, for good reason.

There is no doubt Google is gaining the lion’s share of Internet business (leaving Yahoo and Bing search engines far behind in market share) and expanding its reach across a variety of industries. We at WMB believe this growing power rivals that of our national security system.

Will the U.S. government attempt to place limits on Google? Can our government even regulate this powerhouse since it is driven by Internet standards that literally encompass millions of people throughout the world? It may even defy anti-trust and free enterprise.

The message from broadcasters is clear: They want to be paid for their shows wherever they are seen – just as new devices are making it easier to watch those shows on regular TV sets, according to the Associated Press.

“Basically, they're trying to work hard to ensure that 'cord-cutting' is not an attractive option anymore,” said analyst Derek Baine of research firm SNL Kagan, referring to the trend of people cutting their cable subscriptions and catching shows online to save money.

BTIG Research analyst Rich Greenfield put it this way:
“Consumers must be made to realize that nothing is free anymore.”

Spokespeople from ABC, CBS and NBC confirm the programming embargo affecting Google TV, which WMB wrote about in an earlier post.

But both ABC and NBC are allowing people to access the Internet and search for Web videos on their televisions as well as to search live TV listings. ABC is owned by Walt Disney Co.; CBS is part of CBS Corp.; and NBC is a unit of General Electric Co.’s NBC Universal.

Earlier this month, Logitech and Sony Corp. began selling devices running Google’s software.

“Google TV enables access to all the Web content you already get today on your phone and PC, but it is ultimately the content owners’ choice to restrict their fans from accessing their content on the platform,” according to a Google spokesman.

This move shows an increasing escalation of ongoing disputes between Google and major media companies, which are skeptical Google will maintain a business model that will compensate them for potentially cannibalizing existing and established business operations.

Last summer, Google influenced major media companies to optimize their websites and videos to work more seamlessly with Google TV. Some broadcasters, including Time Warner’s HBO and Turner Broadcasting network, cooperated. In fact, even NBC Universal’s CNBC supported the new paradigm service. Traditional broadcasters optimized some of their content to work specifically for Google TV.

Not everyone obliged, and other companies refused to specifically optimize their websites for Google, and some held out the possibility they could block their content from the service. This is exactly what the three major broadcasting networks have now decided to embrace.

Several TV producers fear their series and shows would be lost in the larger Internet space. Some including Disney and NBC were even concerned about Google’s position on websites offering pirated content, according to analysts familiar with the situation.


For example, Disney executives asked that Google eliminate pirate sites when users search for Disney content like “Desperate Housewives.” Interestingly, companies including Disney were unsatisfied, if not furious, with Google’s response, according to industry sources.

On the other hand, News Corp.’s Fox Broadcasting and Viacom’s MTV are not going to block Google TV from playing episodes on their websites. Accordingly, representatives from Fox and MTV confirmed they are not currently blocking Google TV. But the Fox spokeswoman says “a firm decision has not yet been reached.”

Not surprisingly, Google is trying to assure content owners (like Disney) that Google’s search engine feature is optimized to promote their TV broadcasts and own websites’ video content rather than pirated content, according to independent sources.

In addition, Google has told broadcasters and content owners that they can submit requests to Google to delete unauthorized results from the Google TV search feature, in similar fashion as they do in Google’s traditional Web search engine.

Google won’t directly make money from the sale of Google TV software. But the software’s use will benefit Google’s ad-supported Web search engine and is expected to increase viewership of the ad-supported You-Tube site, owned by Google.
Google also is in talks with Madison Avenue’s media-buying firms. These discussions are centered on how to sell ads on the Google TV interface without interfering with regular TV commercials, according to industry experts.

Given this, the three traditional networks are not alone in blocking their content.

For instance, Hulu, whose owners include Disney, NBC Universal and News Corp., also block their videos from being played through the Google TV interface. Sources indicate Hulu and Google are in discussions to bring the Hulu Plus subscription service to Google TV.

In the end, WMB believes Google will prevail. It’s simply a numbers game, and advertisers will prevail where they can get their best return on their investment. The pawns in this tug of war between Google and the media companies are consumers.

Freedom of choice always is preferable to having total government regulation or a single company having a monopoly involving a product or service. The trick is to strike a balance that allows for free enterprise and consumer protection.

This post is by TechMan, WMB co-author who blogs about trends, issues and ideas affecting business, industry, technology and consumers. Please share this post!