Google TV: Who’s Going to Pay the Bill?
When Sony released the home video recording system in the late 70’s, TV networks and studios tried to have them run out of business. Universal Studios even sued the company in court saying that Sony was advocating home copyright infringement (Universal lost). An even bigger concern was the fact that the new technology allowed home viewers to skip TV commercials and it was thought that this would bring about the end of TV advertising as we know it.
Thirty years later, ad skipping technology has improved with the advent of the DVR but networks are still selling commercials. You’d think we would have learned something from that, but we haven’t.
Now, networks are up in arms over Google’s newest offering, Google TV. The internet giant is looking to give TV viewers access to a nearly unlimited supply of TV by connecting their television to the web by way of a black box. The viewer would then use the Google TV search to locate old episodes of “My Mother the Car” which were being housed on the studio’s website. Voila! No more mindless infomercials at three in the morning. Now you can watch what you want, when you want.
Nice, but who’s going to pay for it? Would anyone buy ad time on a forty-year old sitcom? If so, at what rate? Certainly not at the same price they pay for 30 seconds on a Thursday night.
“The company continues to advocate an advertising auction model that’s been successful in its core search business, whereby search terms are sold to the highest bidder. That makes perfect sense for a manufacturer selling digital cameras, but it would be disruptive for network ad sales, where prime-time hits are bundled with other less-popular shows so that the winners pay for the losers.”
Google says not only will their model work, but it will open up TV advertising in a way we’ve never experienced before and and I have to agree. The same studios that fought the home recorder, now earn billions on DVD sales. The DVR has proven to be a boon for smaller networks who can’t compete with the big boys. The Live Plus 7 Nielsen ratings have helped those networks pull in more ratings points and in return, more dollars.
Google TV is the next big step toward true interactive TV marketing. Like the song you’re hearing on your favorite? Press a number on your remote control and download it now through iTunes. My first marketing job was with a company working on that very technology. But it was long before the DVR and web TV so it never came together.
Now, the time is right. With more and more people watching TV on their computers and phones, internet driven television is a given. Instead of fighting it, Hollywood needs to start thinking about how to monetize it. For the person who gets it right, it could be the next big California gold rush.