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Optical/IP

Google TV

3:00 PM -- TiVo Inc. (Nasdaq: TIVO) didn't change the way I watch television. But Google (Nasdaq: GOOG) might.

I know I'm in the minority when I say TiVo (actually, in our case, a standalone DVR) didn't affect my viewing habits. I'd record something and either watch it within a couple of hours, or not at all. I didn't watch more television, as I feared I would, and I didn't change the types of programs I was watching.

But YouTube Inc. -- soon to be a part of Google -- has opened up a new level of TV consumerism for me.

Consider South Park. I haven't followed the show in years and wouldn't think to TiVo it. But now, when word spreads about a particularly cool episode -- like the World of Warcraft one -- I can snap over to YouTube and watch. The important thing here isn't the time shifting; it's the process, the ability to grab this episode that I otherwise would have ignored.

What I've discovered is that I don't want Tivo. I want a public library. I want somebody else to do the recording, and to leave everything lying around for access.

The broadcast networks are taking baby steps in this direction. ABC has been putting its hit shows on the Web the day after broadcast. CBS, Fox, and NBC are following suit, putting some emphasis on their newer shows in hopes of catching buzz like The Office did.

They need more than that, though, and not just because the programs suck. They need a deep archive, with the intention of keeping everything available forever. The Web equivalent of the Museum of Television & Radio.

Yes, this endangers the broadcast revenue model, unless YouTube ads can rack up what primetime earns (a figure that's been shrinking as TV choices proliferate). And YouTube/Google does have to finish sorting out copyright issues. That will come in time.

Instant, arbitrary access is the future of TV -- that's been clear since long before Web 2.0 started springing up. YouTube offers a vehicle for it. Google offers the search power that would let you locate an episode -- or scan the video universe to find something new to your liking. Google might provide the ammunition to kill my television.

— Craig Matsumoto, Senior Editor, Light Reading

Scott Raynovich 12/5/2012 | 3:38:04 AM
re: Google TV Craig --

I agree and why I believe it will all come down to more sophisticated caching/cheaper storage/settop boxes. Your settop will be that vast library that you can click into on any moment -- and have the appropriate people get paid.

That is also why I believe why YouTube is not the answer. Because:

1) The quality sucks on YouTube (grainy botched illegal SouthPark, not the real SouthPark)

2) The download model won't work with longer high quality content. It needs to be cached close to the user.

3) They don't own any content

Hey, I just thought about this -- YouTube is the Canal Street of video acquisition. For those of you who don't live in NYC, on Canal Street there are throngs of grey-market videos available copied from China at cut-rate prices. But you never really know what you're getting, and you don't know when the guy is going to have to close up the box and run down the street cause the cops are coming!

--Scott
firstmiler 12/5/2012 | 3:38:03 AM
re: Google TV Agreed that YouTube is not the end-game, but I see it being an important complimentary source of content... despite all the recent fury over copyright, my experience on YouTube is that 95+% is Opensource Video Content.

"GooTube" (hey, its no worse than "Lucatel", although I'm sure Red Panda will have no trouble conjuring up some inappropriate double entendre complete with a link to a site featuring Astroglide) will quickly put a more professional polish on the performance and UI for the content. They will then race along side Terry Semel for DRM and copyright compliance with as much content as possible. In the mean time, however, they will continue to serve as the world's largest and best Opensource Video Content bazaar. Certainly it is to be expected that they will successfully hone the monetization of the GooTube content.

The end-game remains a hybrid of the GooTube and Traditional Broadcast/Carrier models. Barriers such as Caching, STB Cost, Licensed Content, DRM, pricing models, storage scale/cost, transport scale/cost, regulatory/legislative restrictions and reform, remain the reason that the IPTV marke continues to cast-about in search of its full potential.

For all the VCs out there, it must be very encouraging to see an IPTV startup with little overhead, little payroll, minimal cash burn to liquidity, quickly developed and marketable IP, and one of the biggest non-IPO bonanzas ever! (even Skype took longer and burned more cash to get to its over-valued exit) This type of success is what leads to mini-booms. Expect to see the surge of new Opensource Content companies spike in the coming 12 months. If a first-mover provider of somewhat clunky Opensource Video is worth $1.6B, what is the end-game winner worth??

FM
Michael Harris 12/5/2012 | 3:38:03 AM
re: Google TV I'm with Rano on this. You want a vast, searchable on-demand video library that looks great on your big-screen TV? There's this thing called VOD from your local cable or telco TV service that is poised to do the job.

rjmcmahon 12/5/2012 | 3:38:02 AM
re: Google TV re: "For all the VCs out there, it must be very encouraging to see an IPTV startup with little overhead, little payroll, minimal cash burn to liquidity, quickly developed and marketable IP, and one of the biggest non-IPO bonanzas ever!"

Kinda like the days of MP3.com?

The San Diego-based company's shares ended the day up 35.31 at 63.31 as nearly 16 million shares changed hands on the Nasdaq Stock Market. Earlier, the shares reached 105, and MP3.com's market value touched $6.9 billion--more than that of "Big Five" record company EMI's $6.4 billion.

http://news.com.com/2100-1023-...
Pete Baldwin 12/5/2012 | 3:37:59 AM
re: Google TV Scott -- good points, but I still think this can be made to work.

#1 and #3 are related -- that is, the quality of pirated video sucks because it's pirated; it's taken from somebody's crappy cable line. (You'll also get videos where people pointed a camcorder at the TV screen -- making the Canal St. analogy just perfect!)

Both of those can be fixed through.... well, capitulation by the networks. My guess is that YouTube is going to get legit access to more and more copyrighted content; my pipe dream is that the networks will start shoveling stuff into there. I would suspect programs can get more viewers in a searchable free-for-all environment like Google than they can by sitting on each network's own web site.

I'll concede there are issues of caching and bandwidth to deal with... but we all know Google is working on infrastructure. Since full-episode streaming is already possible (every network is doing it, remember), I don't think it's unreasonable to assume things will get better on the technology front.

Sure, I'm not being very practical here -- I'm trying to think from the content side, setting up the ideal model (for my tastes) and seeing how possible it might be. (Sorry Michael, but I don't like VOD as an answer -- it probably wouldn't be free and wouldn't come with the same kind of search power.)

That's not to say the industry will do something just because it pleases customers (see "RIAA").
Michael Harris 12/5/2012 | 3:37:54 AM
re: Google TV (Sorry Michael, but I don't like VOD as an answer -- it probably wouldn't be free and wouldn't come with the same kind of search power.)

The vast majority of VOD content offered today from the likes of Comcast is free, for digital cable subscribers. You'll always have better search capabilities through a PC interface, but that is not the preferred screen to watch high-quality video.

YouTube is a cool service, as will be GooTube, let's just drop all the nonsense about it killing cable or telco TV.
45rpm 12/5/2012 | 3:37:53 AM
re: Google TV Included (not free, since I still pay something) VOD from Time-Warner is sort of like a bookmobile visiting my block compared to a real VOD library.
rjmcmahon 12/5/2012 | 3:37:46 AM
re: Google TV re: "My bet is that the MSOs and telcos have better luck building these real on-demand libraries for TV-quality video than web firms."

I think you guys may be overrating the demand for deep, VOD libraries. Demand for movies is created by massive amounts of advertising and marketing. Blockbuster rents the "new releases" and fills the rest of the store to give the illusion of choice. I talked with a guy at NBC about getting access to all the sports libraries, and he said that wasn't the problem. The problems was creating audience demand. He gave the example of ESPN Classic which indirectly leveraged demand created by ESPN's regular events (i.e. they play old wimbledon matches during the similar times when wimbledon is on the air). Without this leverage he said ESPN classic would fail.

Also, you keep saying Telco-tv. There isn't such a thing. It's the MSOs that have or will have VOD to offer. Telcos have nothing w/respect to video.

I do think MSO VOD crosses generational boundries and will be popular, particularly if it's free and advertising supported. Pay for video will probably need large amounts of direct advertising. Web video for the TV screen will be niche (or violate copyrights.)

The YouTube VC's may be getting out at the peak of the market and it's still much less than they got for mp3.com and we all know where that went.
Michael Harris 12/5/2012 | 3:37:46 AM
re: Google TV Included (not free, since I still pay something) VOD from Time-Warner is sort of like a bookmobile visiting my block compared to a real VOD library.

True. Love the bookmobile analogy. Thing is, you can't find a "real" library on the Internet either for TV-quality video. Except for Netflix. :)

My bet is that the MSOs and telcos have better luck building these real on-demand libraries for TV-quality video than web firms.
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