The Fight for Your TV Print E-mail

Let me get right to the point.  Apple and Google are already the two dominate players in the consumer electronics space.  That may be a bold statement, but I don't think that it's to far off.  Many are expecting Android to hold the #2 spot in mobile operating system deployments by 2012.  Most analysts throw Symbian and RIM into the mix based on current market conditions, but I think that things are going to change very rapidly over the next year.

With the NexusOne, Google is leap-frogging the industry by changing the established rules around how new devices get into the hands of consumers.  I've got to hand it to Google on this one.  They've managed to get the majority of the hardware manufacturers over the Android barrel, just in time to watch the rug get ripped out from under their distribution models!  If I were a mobile handset manufacturer I would be two things right now.  First, I would be incredibly angry at Google, and second, I would desperately be trying to figure out a way to adapt to get my phones into consumers hands in a carrier-neutral way without costing $500.

But I'm getting distracted.  The real point of this post was to talk about the battle that is brewing that Google absolutely without a doubt must win.  Google needs your attention when you watch TV.  While television ad revenues are hurting terribly lately, it's still the biggest piece of the advertising revenue pie out there.  Only in the UK has internet ad revenue recently surpassed TV.  I can completely understand why you Brits are spending more time on the Internet when the majority of your television choices involve BBC-produced shows, but even across the pond, it's pretty much a tie between Internet ad revenue  and TV revenue.

Google could more than double its advertising revenues by making a jump to television.  They already own web advertising, and are gaining ground every day.  The growth potential available in TV is too good to pass up.  Someone is going to jump here, and that means Google will be in the mix.  I predict the following things will happen, or at least start to happen, within the next year.

1. Google will introduce a new Android-based open-source platform that can be installed on DVR hardware.  This platform will give developers the ability to write and distribute applications on DVRs, much like we do on mobile phones.  Google will include APIs targetted at video, channel aggregation, metadata such as transcription, translation, etc.  This will be some fun stuff. 

2. A large portion of the cable companies will pressure DVR manufacturers to adopt the new OS in an attempt to deal with the threat that Apple's new television offering poses.  Also, Google will be offering cable companies a big carrot by allowing them to offer their consumers interactive purchasing capabilities of products, applications, etc.  It will also (in the short-term) give cable companies a lever to sell internet broadband services to consumers.  What will QVC become?  Imagine product placement in shows, with the ability to pause the show, act on a coupon, and the resume, all with the cable company taking a cut.

3. Apple will refine their distribution and advertising model.  They have a big head start here when it comes to licensing with networks and content providers.

4. Someone will buy TiVo.  Get it over with already.  TiVo will ultimately run the new Android DVR software.

5. Networks will hop on board because they will not have a choice.  They are hemorrhaging money right now, and will not want to go the way of record labels.  Google will establish an advertising revenue sharing algorithm that everyone will hate, but will eventually accept.

I can't wait.  This is going to be some fun stuff, and it's going to happen very quickly.  Five years from now, we won't be able to recognize TV.  What are your thoughts?