A report tonight says that Google hasn’t convinced any of the bigger network executives to sign up for their new service, set to debut in the coming months.
One of the three areas which Google (GOOG) sees significant expansion over the next few years is in the $70 billion/year U.S. television advertising market. With its GoogleTV product, it now has the platform to sell content against advertising. But can it get top notch content?
In recent weeks, Google has met with officials of TV networks including ABC, CBS, Fox and NBC to encourage them to work with the service, according to people familiar with the matter. Content owners, though, are skeptical that Google can provide a business model that would compensate for potentially cannibalizing TV owners’ existing broadcast businesses.
Google looks to be facing a chicken or the egg type of problem. They need to convince network executives that Google’s platform can adequately reimburse them for content (as well as offset the exodus of traditional cable subscribers who switch to GoogleTV). But without content they can’t sign on the kind of advertisers who can pay for those coveted high profile show commercials. Google may have to invest some additional money to get the cycle rolling.
A muddying factor to all of this is Google will be able to play Flash content from the Web (unless blocked), like from Hulu, Comedy Central and CBS. This ‘open pipe’ allows people to watch on TV what was meant for the computer, directly competing against the living room cable lines that have been cash cows in the past.
Also, many executives worry that they’ll be competing against pirated video.
Independent video publishers are scurrying to sign up, and Adobe (ADBE) is showing developers how they can use Flash to build content for GoogleTV. Here’s a video from a few weeks ago showing Adobe’s enthusiasm for the platform:
[youtube=http://www.youtube.com/watch?v=ZzbBiXfQ3so&w=600&h=380]
It will be interesting to see which major networks Google can sign up for launch. Apple (AAPL) CEO Steve Jobs has been trying to work out a deal for AppleTV for years without much to show for it.