Google TV Launches with Little Network Support

Networks fear audiences will stop watching traditional broadcast option

Google Inc. (NASDAQ: GOOG) revealed their launch plans for Google TV yesterday after months of speculation over when televisions and set top boxes carrying Google’s new software would ship. Over the course of the next few weeks, consumers will be able to purchase different models of Sony‘s (NYSE: SNE) high-definition televisions, including the new Sony Internet TV, and Blu-ray players that come pre-loaded with Google’s new software. They will also have access to Google TV through a new set top box from Logitech (NASDAQ: LOGI). No prices have been announced for the new devices equipped with Google TV, though.

The other mystery surrounding Google’s new service that unifies both regular television delivery with streaming Internet television is what kind of support from television content producers Google TV would have when the service is finally in people’s living rooms. Many of television’s most powerful broadcasters, both network and cable, have expressed concerns over how content will be organized on Google TV. Now that Google has announced their launch plans for the service, it appears that they were not able to quell those fears. While Google TV will have support from successful like Netflix (NASDAQ: NFLX), who provide a wealth of archival television programming via a subscription service, and Amazon.com (NASDAQ: AMZN), who offer television downloads and rentals at fixed prices, they will not have the direct support of major television networks at launch. Every major network, including, CBS (NYSE: CBS), News Corp‘s (NYSE: NWS) Fox, and Disney (NYSE: DIS) ABC, will not be supporting Google TV for the foreseeable future. General Electric‘s (NYSE: GE) CNBC will offer services through Google TV, but flagship network NBC will, like the other networks, not be participating during Google TV’s initial period.

The reason the networks are anxious about Google TV is because they believe that having both Internet-based television options on the same device as regular broadcast and cable-based on demand services will lead to cannibalized business. The fear is that audiences will stop watching the traditional broadcast options and cost television companies millions in lost advertising dollars. It’s a legitimate concern. While much of Google TV’s appeal is in the ability to enjoy Web-features like social networking through Twitter, chat services, and information search options while watching TV, the software will also allow users to search the entire Internet for television programming.

Here’s the networks’ nightmare scenario: You want to watch NBC’s 30 Rock. Rather than watch the show during its Thursday airtime or via Comcast‘s (NASDAQ: CMCSA) on demand programming, you use Google TV’s television search option. The search results give you these options: watch select ad-supported episodes via NBC’s partially owned Hulu Internet TV service, watch all previous seasons with no ads via Netflix if you’re a subscriber, or a pirated, ad-free version available illegally through a video hosting website like Megaupload.com. You can see why this would worry NBC and make the other networks nervous. According to a report in The New York Times, network executives want Google to either share their own advertising revenue from contextual ads laid over Google TV’s programming or to aggressively monitor and shut down illegal hosting sources.  Easier said than done on both counts.

Google does have some strong initial support from Time Warner (NYSE: TWX), which is surprising given how outspoken Time Warner has been against Apple Inc.’s (NASDAQ: AAPL) new Apple TV and that company’s aggressively priced 99-cent television rentals. Time Warner properties Turner Broadcasting and HBO are both working with Google TV to optimize their Internet programming for the software. Turner channels like TNT, TBS, and others are optimizing their websites so instant streaming will look good on living televisions, while HBO will be allowing access to its new Internet on demand service HBOGo through Google TV. Support from one of cable TV’s biggest content and service providers is a great start for Google, but they have a long way to go before they can convince other established providers that Internet TV is the business of the future.

As of this writing, Anthony Agnello did not own a position in any of the stocks named here.

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