Google will move into traditional TV waters next year after filing for a couple of cable TV franchises in the Midwest last Friday.
Google filed state regulatory papers for cable TV licenses for its Google fiber service in Kansas City, Kansas and Kansas City, Missouri. Two Sanford C. Bernstein Internet analysts, Carlos Kirjner and Craig Moffett, say this could mean the “broadband-only business model is not economically viable." Google owns the YouTube video platform.
Last year, reports said that Google was considering a cable TV service in Kansas City with possible deals with Walt Disney, Time Warner and Discovery Communications. The incumbent cable provider in Kansas City is Time Warner Cable.
What is Google's real intent? According to analysts, Council Bluffs, Iowa is home to a large Google data center -- a city within the cable franchise area. Another theory is that this will provide Google with the favored public policy position of Net-neutrality.
It could also provide a laboratory for Google to learn about technology and consumer behavior -- the impact of higher-speed access on Internet usage, as well as the potential of different ad formats and models.
Google TV Ads already sells TV advertising for a number of cable systems and some small- to mid-size cable TV networks.
"We are still exploring what product offering will be available when we launch Google Fiber in Kansas City," says a Google spokeswoman. The scheduled launch will take place some time in 2012.