Google And TV Networks: Each Giving Up A Piece Of Their Business To Get More From The Future

by Wayne Friedman, Aug 19, 2010, 10:45 AM

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The easy question for big media companies: Do you ink a deal with Google TV or wait for something better to come along? A better question: What can you give up for the next big digital thing?

Google's quick rise to media stardom hasn't meant a rush of TV networks to Google's businesses. For example, Google TV Ads, the service selling traditional TV advertising time via a Google auction system, hasn't seen many big TV networks -- broadcast, cable or otherwise -- get on board. Mostly it's been fringe players looking for some help, and hardly anyone is giving up premium inventory.

Even with the recent inclusion of DirecTV's advertising avails in Google TV Ads, executives have been generally conservative about expectations.

And Google TV -- the proposed software interface that would allow for easier access on traditional TV sets to premium TV shows and Internet video content like YouTube's -- seems like another media business product placed on the wait-and-see shelf.

Would CBS, for example, want to have "NCIS: Los Angeles" adjacent to a YouTube video clip of a skateboarder buying it in a missed jump over a dumpster? No, you say. It's an on-demand TV world that's coming. Stop focusing on lead-in and lead-out programming and prime-time schedules.

The plethora of traditional and new digital video content demands aggregation. Google would seemingly be the one to sort this one out.

Control is the big issue. Major media companies are used to owning platforms where they can cross-market other video content. The more they move into the "on-demand" world, the more they might be giving up some control -- if the returns are there.

Google TV software, in theory, marries search and traditional TV/video content in the best way possible. It could also do that for big consumer marketers. The advertising math conveniently works like this: Big media companies own traditional TV advertising markets; Google owns the lion's share of all search advertising revenues. Not surprisingly, each would like a piece of each other's business.

The big leap of faith would need to come from traditional media companies believing Google TV could become the next big thing, with an iPhone-like success. Google needs to convince prospective media companies with the message that the digital boat is sailing. No one wants to be left behind -- unless, say, an Apple, Comcast, or Sony has a better ship.

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