The battle for your living room - TechCentral

The battle for your living room

[By Alistair Fairweather]

Predictions are a tricky thing. Fifteen years ago, when the Internet was first flexing its gobal wings, futurists were predicting the end of all “traditional” media, particularly television. And while the dot-com bust deflated a lot of expectations, some of those predictions finally seem to be coming true. Time spent on everything from newspapers to cinema has been falling while Internet usage has been climbing inexorably higher.

Ironically, only television has hung on as the last bastion of old media. TV is a great conversation starter (or “social object”) and the Internet a great conversation facilitator.

This vice grip on mainstream attention has kept TV revenues strong throughout the recession, while their print and radio brethren have been struggling to stay afloat. But now two technology giants have begun to sniff at this fatted lamb, hoping to carve off some of those juicy profits for themselves.

The giants in question are Google and Apple and their approaches to this new market reveal the deep differences in their corporate DNA. Google’s offering is a slick chunk of hardware, with a patented it-just-works interface and a built-in content offering (paid, of course).

But neither of these technology titans can expect an easy ride. Apple, for instance, is struggling to make pay-per-view content deals with some of the biggest players. It has the likes of Disney and Fox on board, but CBS and the premium cable networks like HBO and Showtime aren’t interested. You can still buy their shows from iTunes — but you can’t rent them cheaply, which undermines the appeal of Apple TV .

Why not? Because its current direct-to-the-viewer model works just dandy, and they don’t want Apple inserting themselves into the value chain the way it did with the music industry. In fact this illustrates an important difference between the TV and music businesses. While the music industry fought tooth and nail against the Internet and the MP3 revolution, the big TV networks have embraced the Internet wholeheartedly.

Hulu, a joint venture between NBC, Fox and ABC/Disney, has been drawing millions of viewers and making decent money. Hulu’s model — free to watch and supported by adverts — mimics the networks’ own. Viewers clearly like it too, and there are indications it will be worth as much as US$2bn when it’s shares are listed.

But if Apple’s “walled garden” model doesn’t appeal to the networks, isn’t Google’s openness a better match? Not necessarily. Google aims to “finally open up the living room and enable new innovation from content creators, programmers, developers and advertisers”. That sounds fantastic except that “open up” is often a euphemism for “completely disrupt your entire business model”.

The TV networks are used to having total control. They often own both the channels and the cable networks that deliver them, not to mention production studios and broadcast facilities. They don’t particularly want a bunch of punk kids stealing their viewership with original ideas and shoestring budgets. After all, if all the best videos are available at a single click in your living room, who wants to watch live TV?

Still, many of the networks have signed up with Google, hoping that the traffic they siphon from the search giant will offset the risks of being leapfrogged by independent producers. And while Google TV itself may be the land of the free, a lot of their content partners (HBO, Netflix, Amazon) are very firmly pay-per-view. All that Google TV is doing is providing a more convenient way to find what you want to pay for.

There’s a reason Steve Jobs calls Apple TV a “hobby”. While the big beasts of TV are still strong, it will be tough to disrupt the market like Apple did with music and then smartphones. Who will win? It’s too soon to tell. One thing we can expect, though, is a lot more choices when we flop down on the couch.

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1 Comment

  1. If the content makers play their cards right, they could easily win the war; then Apple, Google and Microsoft would be left scrabbling to pick up the scraps on the delivery side. Both Hulu and Netflix are <$10/month, and offer value for money that's orders of magnitude above what iTunes, Amazon and Zune offer video content at.

    Apple's playing for quick returns as usual, with their cheap/simple product and walled content ecosystem, and it's clear that Google's playing the long game.

    On the hardware side, The Logitech announcement of their Google TV device yesterday was interesting – it's about as upper-end the Google TV stuff is going to get, and a geek's content delivery dream. I was very skeptical about Google's approach until last night, but after seeing what Logitech have come up with, I can't wait to get my hands on one. It'll integrate perfectly into my leeched tv series library (it's legal in this country, okay!) and allow for expansion into the future with the android app ecosystem. On the pay side, it'll do what everyone else does, because you can bet anything that if any media provider makes an app for Apple TV or Zune, they'll do the same for Google TV.