Light Bulb Goes On: Google Is in the TV Biz
October 19, 2009
On my diagram of the businesses that Google is disruptive, I have a big label on motion pictures, videos, and television. Most of those in my lectures on Thursday (October 15) and Friday (October 16) just did not see the connection between Google and “real” rich media. I suppose those doubters are in a state of denial. Take the Guardian’s story “C4 Deal with YouTube Will Let Users Watch Full-Length TV Dramas Online. Deal Highlights Shift in British Viewing Habits.” The story reported:
The deal will see about 50 hours of Channel 4 programming made available on the Google-owned videosharing website soon after airing on TV in a move designed to get it on the front foot as traditional broadcasters scramble to develop revenue-generating online content distribution strategies. For its part, YouTube is seeking to move beyond short clips, often produced by members of the public, to offer full-length TV shows and other higher quality video content. The three-year deal with YouTube will see the broadcaster provide its content, including 3,000 hours of archive programming of shows such as Brass Eye, Derren Brown, Ramsay’s Kitchen Nightmares and Teachers, free. The partners will share income on advertising around Channel 4 content, though details of the revenue split were not revealed.
What is not in the story is the context of the move by Google. Why not? In my opinion, this move is simply another Google beta test and is—after all—just one TV outfit.
So denial. Understatement. Lack of context. These are the three flaws in most analysis of Google. I want to point out that taking a look at what Google is doing is not too useful. When these deals are announced, it is too late for some of Google’s competitors to take action. Sure, competitors can negotiate their own deals, but these knee jerk reactions trigger some unpleasant consequences; namely, dealing with the costs associated with digitizing, serving, and storing chunky data like video. Google’s advantage is scale at costs below what knee jerk outfits will incur. Thus, the context of this Google deal has some grim implications for competitors:
First, Google can ramp up video and do it quickly and more economically than most firms. Click here for one view.
Second, with Google’s third party payer business model, the lure of the Google approach may be enticing to rich media outfits with an appetite for new revenue options.
Third, the lack of context for Google’s actions means that those who join in the Google video content push are likely to see one thing when Google is doing something quite different.
Intrigued? This is a marketing blog, so you have to buy Google: The Digital Gutenberg to get more info on how Google is moving information access to a metalevel. Click the ad at the top of this Web page.
Stephen Arnold, October 19, 2009
The cab driver was nice to me as I wrote the first draft of this article. Compensation enough I suppose.
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