TV is the New Mobile

When Google enters a field sometimes they do so quietly, but when they decide they want to own something there is nothing quiet about their approach. They are not content to pick one niche and one model (the way that Netflix does):

Google keeps fighting on multiple fronts. Like boxing a glacier, over time they just wear the market down.

Google wants to turn Youtube watchers into mindless drones who are spared the expense of thought:

“If too much of your brain is occupied with the process of choosing, it takes you out of the experience of watching,” explains James Black, a NowMov co-founder. ... “We’re looking at how to push users into passive-consumption mode, a lean-back experience,” Mr. Davidson says.

They want Youtube to be like television, because the TV ad market is far larger than the web ad market, and they already own search. They are desperately searching for new markets for avenues to grow.

Google spent $106 million buying On2, and then open sourced their V8 video codec:

It’s the “first one is free” approach that a drug dealer uses, and it’s not a “free” play, it’s a “we are the new railroad” play. For one-tenth the amount they paid for that crappy old codec, they could have paid Firefox’s licensing fees in perpetuity, if being a sugar daddy is what they want. They don’t want it. This is a “in your face, Apple” play, and a monopoly play.

And in addition to owning Youtube, tons of dark fiber, and their video codec, Google announced their Google TV effort. The person who controls the set top box has the market data.

Mark Cuban highlights the gaming that will occur in manipulating the rankings

The success of Google TV will come down to one thing….PageRank. Can you imagine the white hat and black hat SEO battles that will take place as video content providers try to get to the top of the TV Search Listings on Google TV ? Like Google said, there are 4 billion TVs and growing and the US TV Ad market is $70 BILLION. There is a lot at stake if Google TV takes off. How Google does its PageRank for this product will have a bigger impact on the success of the product in the TV market than anything else it does.

but if Google is passively monitoring the network they are far better than a guide. It becomes easy for them to see when their recommendations were not relevant & adjust. And if a network screws them multiple times they can always provide a dampening factor in their rankings.

If successful their TV efforts can tear down the walls between different types of content:

Google will do what it does, and that’s insinuate itself between information and the user. And the fretting will be minimal. As for the impact of Google TV, this has the potential to challenge the TV hegemony. By blurring the lines between TV and the Internet, Google TV has the potential to destroy classifications of content. No more “TV shows,” just “content.” No more “Web videos,” just “content.” And, once the distinctions are completely undermined, then direct distribution via the Internet becomes more viable. Google TV could replace Big TV as the aggregator, then it just becomes a matter of who offers the fattest pipes.

Once Google has the aggregate usage data they can use it any way they like. The concept applies to any market. Economies of scale advantages breed more economies of scale. Apple and Amazon want to have proprietary ebook formats? Fine. Google will assist publishers in creating the default common e-book format.

It is not just regular algorithm updates that can whack your traffic. A couple years out these additional content formats will be a big issue for many web publishers because if Google gets a significant sample size & market leverage in any of these parallel markets then some of these other content formats will start bleeding into the search results. And that (along with market competition) can quickly drive margins into negative territory for many publishing business models.

Published: June 1, 2010

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Comments

June 1, 2010 - 1:39pm

It's still early in the game, Aaron (http://www.hugoguzman.com/2010/05/google-tv-a-big-step-but-an-even-bigge...) but once interactive TV ads become the norm and not the exception, it will be fun to watch the television establishment crumble the way print publishing has (and continues to do so).

This is good news for SEO, who could end up becoming the most sought after of all marketers, and as for being an independent publisher, I have a recurring note on my to do list. It says, "START PRACTICING VIDEO PRODUCTION" (xtranormal.com, live action, etc).

June 1, 2010 - 4:05pm

I apologize for being extremely blunt but this has to be said:

"It is F***ing easy to hook your F***ing laptop to your F***ing Television. Then you can have all the F***ing Internet on your TV that you want."

It takes 2 seconds to do and the cords you needs (HDMI or Monitor/Male to Male Audio) will run you less than $10. Then, you can tell Google TV to go F*** if you so choose :.)

June 1, 2010 - 7:02pm

Yeah, but I think that the ultimate goal is to have TV and internet merge into one, Todd.

When TV = internet and vice versa, the game changes in a lot of ways for both consumers, advertisers, marketers, companies, and investors.

June 1, 2010 - 7:17pm

I think people view TV differently than they do youtube-type video sharing sites on the web. On the web, you're never far from your keyboard or the screen. It's interactive.

TV is very passive. People want to watch a movie, maybe a documentary, maybe a soap opera. Whatever it is, they don't want to be switching channels every 5 minutes or fiddling with a keyboard or whatever device. It's downtime. It's entertainment in passive form. The ads that work here are purely display-type ads.

June 1, 2010 - 7:29pm

because it will probably be video streaming and right now the number of subtitled captioned items are woefully limited (I'm hearing impaired).

anyone share the same thought as me that Google will put most mainstream businesses out of work in a few decades?

What happens when everything in the world becomes free and supported entirely by Google's cashflow, is it even possible? Kind of reminds me of a snake eating its tail.

June 2, 2010 - 9:00am

What happens when everything in the world becomes free and supported entirely by Google's cashflow

largely that can't happen, because as Google enters many markets they make the targeting more precise and the ads cheaper (than what they originally were). The more Google eats into the low end of the market the more people will likely want to pay a premium to move away from some of the ad targeting. Just look at what AdSense has done to the search results with the likes of eHow & Mahalo, or what Expert Village did to Youtube.

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