Video services

GooTube Doesn't Scale

Cable Digital News reported yesterday on Time Warner Cable Inc. (NYSE: TWC)'s decision to pull the plug on its broadband TV trial in San Diego late last month. (See Time Warner Starts Over on BBTV.) The MSO found that less than 1 percent of trial participants watched basic cable television on their PCs, even though they had 75 channels available for viewing.

It's a cool application, but no one cared. Apparently, it's called cable TV for a reason. Consumers want to watch cable television on their televisions.

Logically, the results of this trial inspire one to wonder: Will the same be true for PC-delivered Internet video? Is it called Internet video for a reason? Do consumers really want to watch YouTube Inc. on their TVs?

The Googlers think so. They want to bring YouTube to your tube. Therein lies the rub, though. According to this Thomson Reuters report from USA Today, Google (Nasdaq: GOOG) realizes that it cannot deliver broadcast-quality video over the public Internet.

At the Cable Europe Congress earlier this month, Vincent Dureau, Google's head of TV technology, reportedly said: "The Web infrastructure, and even Google's (infrastructure), doesn't scale. It's not going to offer the quality of service that consumers expect."

Rather than trying to go "over the top," it would indeed be much easier to package YouTube as an interactive programming network and gain MSO carriage, providing high-quality, ubiquitous distribution. Why not just plug into the existing digital video network instead of trying to rebuild it?

A rational idea. Of course, Dureau is a cable guy, having joined Google recently from OpenTV Corp. (Nasdaq: OPTV), where he served as CTO.

— Michael Harris, Chief Analyst, Cable Digital News

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