The wall Street Journal can find little else of interest in the technology sphere other than to say that Apple or Microsoft or Google, in any given week, are about to put somebody out of business. For a while now it has been the pay TV services in the US and this week it has taken the same old Google version of this story off the spike and put it once again on its pages.
There’s an awful lot wrong with the idea that Google is planning to offer a full OTT service that will compete with everyone else. For a start it won’t contain the big US broadcast networks, because they don’t even allow Google TV browsers to work with the programming that’s free on their sites. That came about because YouTube took so long, and was so unwilling, to offer a practical method of taking copyright content from its site, that Viacom actually tried to sue it. But the antipathy between Google and Broadcast content owners is now legend, and any negotiator who managed to cut through all that and change people’s minds would be better employed trying to end all the world’s wars and starvation in one go, because they would have to be that good a diplomat.
We noted recently that the game has changed. The consistent pressure put on content businesses including cable networks as well as broadcast networks, to not deal with fresh online upstarts has come from the companies that rely on the content right now ‘ pay TV companies. That stranglehold should be broken, but it will take many years before there is free internet trade in content. Right now it is a market based on size, and the playground bullies of content, who buy more content than even Apple and Google have a stomach for financially, are the pay TV providers.
If Google wants to commission a TV channel or two, it would have to be made up of cheap content that it has sponsored, old TV repeats, YouTube best bits or cheap reality TV. There is no reason why Google could bring anything better than Netflix to market, or at least a Hulu. And that’s what all of the indicators have been so far in the recent past ‘ Google will turn all that YouTub e content into paid channels.
Now suddenly, and we think quite realistically, that Google has its ducks in a row on paid channels, it has gone back to the major content owners to see what it can get to augment these channels, from traditional TV sources. We cannot see why Google would be any more welcome than Microsoft and Apple before it, and very probably less so. On the other hand, content executives will try to get as much money for their content as possible, but would be too frightened of either a) Google ruining the market or b) pay TV companies dropping them like hot brick the day after, to offer any serious top end content. So sure there will be talks about the rest of the content. It is in the interests of content suppliers to have as many customers as possible. What they will not do is offer anyone a big enough weapon to kill off all their other customers, it goes against self-preservation.
So we believe someone at WSJ has noted some conversations happening between Google and media giants, and that these relate to a paid TV service that Google is trying to pull together. But we think this must be about low end, minimal offerings to legitimise its own YouTube channels. It can then make another push with Google TV, using it as another way of taking this content to market, along with tablet and other Android versions, and Chromebooks.
We know that Intel is still in this chase, but has had the same problems time and time again, if you want the top content, you have to lay out a huge amount up front, and Intel has been handed around as the ‘chump’ in the equation, too innocent to seriously, but with everyone keen to take Intel for a ride and take its money.
Apple has already given up, we are fairly sure about that, and instead is working on introducing better ways to watch TV, but carrying the existing TV services, not content that it acquires rights to. It is understood to have done a deal to make the Apple TV work as a simple player for Time Warner Cable, rather like the way Xbox did this a few years ago.
So this is the other thing that Google could actually be doing, pushing Google TV as a UI either for cable or for broadcasting companies to go direct to market. While broadcasters have been suing companies like Aereo making it almost impossible for anyone to offer their programming over the internet, at some point this attitude must change. Broadcasters everywhere outside the US have offered free catch up and OTT delivery of their channels, under their own steam. If Google was to offer to facilitate this on behalf of broadcasters instead of bypassing them, it will have joined Apple in working with, rather than against one segment of the traditional TV community.
If you add to this the need to make TV Everywhere systems work far better than they have up until now, and the rising use of both broadcast and cable live linear content over OTT systems, then Google needs to be part of this movement, even if, as we suspect, it is not as the disruptor owner of a new service, and is merely a technology protagonist. That’s what we think, and that it will be some time before any of these companies have a genuine paid service of their own that can challenge cable.
Intel may get something out the door, but its CEO may end up squashing the deal due to its potential for ballooning costs. The service already has a rumoured name called OnCue. But if that comes to market then Apple, Amazon, Google and Microsoft will all be at the door asking why they were denied, followed by a list of major pay TV operatives saying ‘We don’t want to use your content anymore or we want it cheaper.’
The Wall Street Journal also said that Sony was in a similar race to Intel, but as far as we can see it has had ten years to come up with a system that competes with iTunes and has launched and closed and launched and closed ad got nowhere. Sony actually owns one of the studios that makes some of the content it needs. Sony will perhaps move closer to a Netflix class service at some point, of VoD on older content, but we cannot see it sustaining the effort it needs to build momentum in an OTT paid video service ‘ look how long it has taken Hulu.