Make No Mistake: Google Is Taking On The TV Industry http://t.co/6ntzqtFb The traditional TV industry should consider itself warned.
The biggest barrier to Google and Apple’s desire to create a new television distribution network has been the intransigence of the content owners to disrupt their own business model while it’s still profitable. So the obvious answer is for them to invest in content directly.
Then, yesterday evening Google announced that it was launching more than 100 new YouTube channels with exclusive content from big-name celebrities and news organizations.
Google is directly funding this content with more than $100 million in advances, and it’s probably just the beginning. The company has also explored buying Hulu, and a deal is not off the table even though Hulu has stopped considering other bidders.
In other words, Google is seeding the explosion of video content on its own massively popular online video network, where it sells advertisements and makes money. Then, it’s providing an interface that puts that content on equal footing with the TV shows provided by the traditional TV industry, where Google’s presence is minimal. (Not for lack of trying — Google has a program calledGoogle TV Ads that lets advertisers buy ads on traditional cable networks like CNN. So far, it does not make a material contribution to earnings, whereas YouTube is probably a billion-dollar business.)
While we haven’t seen Apple show signs of investing directly in content, they have the means to simply bypass the Studios and Networks and go directly to the show runners and producers directly. Google has started what I hypothesized about in Dec 09.