by Anthony John Agnello | November 12, 2010 11:44 am
Google TV’s relationship with the ruling bodies of network television has been shaky from the start. When Google (NASDAQ: GOOG) announced the new television and set top box software last May, the owners of major television networks and cable channels including General Electric (NYSE: GE), Disney (NYSE: DIS), CBS (NYSE: CBS), News Corp. (NYSE: NWS), Viacom (NYSE: VIA) and even cable providers like Time Warner (NYSE: TWX) all decried the new product’s ability to pull video from anywhere on the Internet. Microsoft’s (NASDAQ: MSFT) WebTV didn’t threaten the old guard back in the 1990s, but high-speed Web access and quality video on the Internet are ubiquitous components of the media landscape.
Google TV hit the public at the beginning of October, coming standard in the $299 Logitech (NASDAQ: LOGI) Revue set-top box and Sony’s (NYSE: SNE) high-definition television set appropriately named the Sony Internet TV. Time Warner, though still skeptical, brought their support for the new service with Web content from its stable of channels like Cartoon Network, TBS, CNN and TNT, while also announcing limited content support from HBO. NBC Universal also agreed to provide content from financial news network CNBC. Netflix (NASDAQ: NFLX), a major partner of most television networks and cable channels, also supported Google’s new service at the launch.
Two weeks later, though, it came out that ABC, NBC and CBS were all blocking Google TV devices from accessing television shows from their major channels. NBC.com, ABC.com, television content at ESPN.com and numerous others were locked out. Reuters reported shortly after that Google was actively negotiating with GE, Disney and CBS to allow Google TV users access to these advertising supported websites, but as of now they are still blocked.
Today, News Corp. officially announced that it was blocking Google TV access to Fox channels. Hulu, the streaming television subsidiary co-owned by News Corp, GE, and Disney, is also blocked from the service, keeping even subscribers to the recently launched Hulu Plus service locked out.
Television content holders are looking to maintain their most productive advertising revenue streams by blocking living room access to official streaming versions of their programming. Single episodes and clips hosted of current shows like Modern Family hosted at ABC.com are typically supported by just three 30-second advertisements played at the beginning, middle and end of a stream and it is not uncommon for all three commercial breaks to be from a single sponsor. This is compared to the traditional two- minute commercial breaks on network television, featuring four separate ads from a variety of sponsors.
Blocking Google TV, however, may not be the solution Disney and its competitors need if they hope to maintain revenue. The early adoption audience purchasing Google TV devices this fall are the type of viewers with the knowledge and willingness to seek out illegitimate sources of current television programming on the Internet. Keeping legitimate Web outlets blocked won’t drive viewers to traditional broadcast and provider-based on demand services; it will lead them to the most accessible alternative like illegally hosted episodes on video sites like Megaupload. Investors curious as to how Google will affect the television world with Google TV should look to Time Warner’s support of the service as a good test of how big an Internet audience can be through Google TV devices.
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