
Schmidt On Google TV Network Backlash: We’re Taking Dumb TV And Making It Smart - jedwhite
http://techcrunch.com/2010/11/15/schmidt-google-tv/
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trotsky
_He said that the networks seem to be concerned that the enormous revenue
streams targeted at these dumb televisions will go away if they change the
model. Schmidt disagrees. He thinks people will watch even more television if
it’s augmented with the Internet._

I can't imagine why they'd be worried. It's not like other advertising driven
revenue models that came online earlier have been getting ground down into
pulp or anything.

The networks are in the business of selling advertising (and buying or
producing content as advertising delivery vehicles). What's more, they get the
lions share of the money spend on TV advertising - there aren't substantial
amounts being bled off to intermediaries.

Google is in the business of selling advertising, but not content. And they
are in the business of standing between the advertiser and the content
producer and taking a hefty percentage of the dollars spent on advertising.
And they've proven to be very adept at business.

A large amount of advantage major networks hold over even cable channels is
their ability to deliver large audiences to ad buyers. Because everything is
pretty manual and there is no big auction network or the like, an ad buyer
can't easily purchase the same reach of say 5M households that the network
provides by placing their ads on 1000 programs each with 5000 viewers.

Once it's just as easy or easier to reach your audience through many small
programs, the money will start to flow away from big TV and into smaller
productions. That money will allow the upstarts to increase production value,
competing more effectively. And whatever money is still going to the major
networks will be getting a substantial slice taken out by the intermediaries
and their "value add".

But Eric Schmidt says it won't be a problem. I mean, they can trust google,
right?

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jacobolus
> _He thinks people will watch even more television_

In 2008, the average American 12 or older watched 1,704 hours of television:
4.7 hours per day. Schmidt thinks people will watch _more_ than that much
Google TV? I weep for humanity.

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citizenkeys
Google's philosophy with Google TV and network television stations amounts to
"why buy the cow when we can get the milk for free?"

In so many words, the issue is that Google wants to profit from network
television without paying for the content or infrastructure. The networks have
a legitimate right to be angry when they pay for the content and distribution
and Google wants to profit off of that for free.

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jedwhite
How is this any different to Google News? Google is just letting users
discover through a better unified interface the TV content that is ALREADY
available on the web for free. They are providing a service for both users and
the TV networks. The TV networks, like newspapers and other old-world
publishers before them with google search and news, just don't understand it.

~~~
citizenkeys
Google's had issues with those people, too. And book authors and publishers
because of Google Books.

The issue is that Google TV is layering their ads and content on top of the
television that the networks pay lots of money to acquire. So the networks pay
all the costs and Google piggy-backs on it for free.

~~~
martythemaniak
I haven't used Google TV, but I'm pretty sure your post is verifiable
bullshit.

If you go to a network's site on your computer and view their content, you
also view their ads. If you go to a network's site using Google TV, you view
their content and their ads. Where do Google ads come into this?

No, this is all about networks being obsessed with distribution control - you
can watch a show on your computer, on your HTPC, but not on a user-friendly
HTPC. You can watch hulu on your laptop on your lap, but not on your tablet on
your lap, etc etc.

~~~
citizenkeys
Google didn't create Google TV out of the kindness of their heart. Google
created Google TV to make a profit. Just like you see ads on top of Youtube
videos, you see ads on top of and around television using Google TV.

So the more popular a television show, the more ads Google gets to show around
it, and the more money Google makes. How much of that money gets shared with
the networks that actually paid for television show and the costs of
distribution? None. And that's the problem. The networks are putting up all
the money and Google collects when it pays off.

~~~
124816
> you see ads on top of and around television using Google TV

No you don't.

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geuis
Having had the experience of developing for the Google TV (Logitech Revue
unit), all I can say is: They're taking something simple and making it
complicated.

Look at DVR's. That's an excellent example of taking something simple and
making it _smart_. Tivo didn't make it harder to watch tv, it made it easier,
aka watch what you want when you want.

The reason I'm such a fan of the Apple TV is that it made TV even easier. Not
only can I watch what I want when I want, I can do it less expensively. By
canceling my outrageously priced monthly cable service, I have a relatively
low-cost internet connection and spend 2/3 less each month on tv that I ever
have before. There's only a handful of shows that I really care to watch, and
I get them how I want.

Google TV is more akin to Web TV than anything else. You took away my remote
and gave me a keyboard. And you made finding content even more difficult than
it was before.

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babeKnuth
"we're taking dumb tv and making it smart"

so does that mean they're shutting down youtube?

