Friday, November 4, 2011

Google Plans to enter $150 billion TV Business

Google, the internet search giant is looking to offer paid-for TV cable services to consumers, a move that will thrust Google into a $150bn per year market of new competitors. Such a venture has the potential to turn today's business of television advertising and distribution upside down.
Google has announced plans to build a fibre optic high-speed internet-service in Kansas City. Google will include content from major TV channels as it has concerns that low cost internet is not enough to attract customers anymore.

Google would then offer the triple communications services such as pay-to-watch cable television, high-speed Internet and telephone. The WSJ (subscription service) quotes from people familiar with the matter that Google has been in negotiations with major TV channels Walt Disney, Time Warner and Discovery Communications in distribution talks over the matter. 

Google has recently recruited former cable TV executive Jeremy Stern, adding weight to the claims. If this is the case, this move would put Google in a position to charge for advertising on the channels, as well as open up possibilities with YouTube and Android integration. Google might even be able to turn YouTube into a sort of “virtual cable TV,” where customers could pick and choose the programs they want, and it might be available on a national, or even international scale.

In a response to the newspapers article, a Google spokesperson commented on Thursday night that “We’re still exploring what product offerings will be available when we launch Google Fiber.” The high-speed internet service is expected to reach Kansas in early 2012.

Google’s negotiations with content creators could also give Google TV an advantage it has never enjoyed before, where the biggest weakness of the company’s potentially groundbreaking TV service was the lack of cooperation of content creators. If it puts itself on equal footing with the other pay TV providers, it might be in a better position to offer its Google TV service as a hub for video, no matter where it comes from.

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