August 19, 2010

Unclear how Google TV will make money

Potential content providers seem afraid of cannibalisation.

The first devices based on Google's TV-oriented system, Google TV, will begin shipping in October, at least in the U.S.. As the unveiling of Google Television in May, it is still only Sony and Logitech is Google's partners on the hardware side, while Best Buy will be the dealer.

At least as important as the hardware is content that the service will be offered. According to sources like the Wall Street Journal has been in contact with, Google will have had conversations with the owner companies including MTV, Nickelodeon, ABC, ESPN, NBC, CBS and Fox to encourage them to cooperate, but the content owners should be skeptical that Google can offer a business model that will compensate for potential cannibalisation of TV companies' existing broadcasting business.
In addition, participants have expressed concerns that their content will drown in all the Web-based content that Google TV will also offer, including pirated video clips.

- It is interesting to explore opportunities with potential partners who value our content. An important next step is to obtain an understanding of Google's business model of the product and how it relates back to content owners such as CBS, "said Anthony Soohoo, a senior vice president of CBS Interactive, the Wall Street Journal.

Google admits that there is still much that is not clear when it comes to the business model for Google TV.
Under Display Search TV Ecosystem Conference held in San Jose yesterday, said Shalini Govil-Pai, which is responsible for partnering with YouTube and Google TV, that the earnings models are still being discussed, but that the advertising of course, will play a major role. This type Cnet News. Google is already heavily involved in ad sales, especially through DoubleClick and AdSense.

Govil-Pai also told that neither Sony or Logitech have exclusive deals when it comes to Google TV.

- Anyone can make Google TV and put it in his unit. You can have a Google-certified device and cooperate with us. Or you can take it and build it into a refrigerator, if you like. Google TV operating system will follow the same business model as Android. It is open source and free license, said Govil-Pai, who also said that Google will eventually work with other chip vendors than Intel.

Intel's Atom processors will however be used in the first units.
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