Google is picking up the pace in the race for your living room. The company has been courting media companies, hoping to license its content for a internet television service, the Washington Post reported last night.
The streaming service would offer traditional TV channel packages over the internet, without the need for a cable or satellite subscription. This would take direct aim at Comcast, DirecTV, and Time Warner Cable, at a time when cable execs want even less competition, lobbying for a duopoly.
The cable companies, despite being generally loathed by consumers, have held a tight grip on the television industry for decades. While Netflix, Hulu, and Amazon have made an admirable effort at loosing it, it's like David fighting Goliath. With Google in the game, we could have a fair fight. Goliath vs. Goliath.
That's not to say it won't be tough. What Google is chasing now isn't industry disruption. The company would still have to purchase traditional cable bundles—buying the niche channels along with the popular ones, not a la carte. And most likely it wouldn't be able to offer viewers a better deal on the packages either.
The channel owners (Viacom, Disney, Comcast) have cushy, lucrative deals with the current cable distributors, so they can play hardball with the rates for any newcomer. They generally charge according to the distributor's reach, making it hard for new players to afford to enter the market, the Post reported.
Intel, Sony, Apple, and other tech companies are also racing to offer online TV. Apple’s strategy centers on a well-designed device to use with traditional cable packages, and Intel is struggling to strike licensing deals with media companies. If anyone can afford to pony up the cash, it's Google, whose pockets run so deep it can spend half Apple's annual marketing budget promoting a single phone.
Even if Google does reach a deal, at first glance not much would change: The same programming for the same price will reach your TV set via fiber networks or broadband instead of cable or satellite. Why would consumers make the switch?
One reason, according to the Post's sources, is that Google could offer a way better user experience. The company has an “easy to use” product that it’s demoing for media companies. TV junkies would welcome with open arms a service that consolidates and simplifies the viewing experience—a one-stop-shop for all content avenues with a slick interface and a user-friendly device.
Google’s certainly been lining up the resources to offer an All Access television experience. It has original programming on YouTube, TV shows and movies on Google Play, and the Google TV software (albeit in need of a redesign) to aggregate and manage the content while also looping in online streaming sites like Netflix and Hulu.
That’s a decent hand, but Google Fiber is the ace up the sleeve. The high-speed broadband and digital cable service is available in select cities, already offers a robust lineup of channels, including, for an extra fee, HBO. As of now most people still have to pay Comcast or Time Warner for broadband internet, which incentivizes their cable packages. If the fiber-optic network spreads nationwide, it’ll be the biggest threat to the cable giants in decades.
By talking to media companies, Google could be lining up the remaining pieces of the pie. The big question mark here is can they strike a deal. Ultimately it's up to the channel owners, like Disney and Viacom, to decide if it's worth licensing their content to tech companies, but they're nervous to mess with what isn’t broken—to say nothing of the fact that Comcast and Time Warner own a big chunk of the popular networks.
Yet the cord-cutting trend is making a slow dent in television ecosystem. Last year was the first time the number of households with cable subscriptions actually went down, from 100.9 million to 100.8 million.
While Big Cable want to hold on to the past like nothing's changing (which, fairly, it isn't much, yet), Google's looking ahead. When the cord-cutters finally sever ties with the cable giants, the tech giant could be waiting to greet them.