Where does Google TV go from here?

The major TV networks fear that Google plans to distribute their content over the Web without compensating them. They say if Google wants content, the search engine must pay.

Greg Sandoval Former Staff writer
Greg Sandoval covers media and digital entertainment for CNET News. Based in New York, Sandoval is a former reporter for The Washington Post and the Los Angeles Times. E-mail Greg, or follow him on Twitter at @sandoCNET.
Greg Sandoval
5 min read
Sony displays Google TV-powered sets. Stephen Shankland/CNET

Those beautiful Sony television sets featuring Google TV are starting to look a lot like high-priced door stops.

Google TV enables users to view Web sites and Internet video on their home TVs. However, consumers are prevented from accessing content from the four major broadcast networks on the software platform as Fox announced Wednesday it would join ABC, CBS, and NBC in blocking access to their content.

While some Google TV enthusiasts are cautioning people not to panic, noting that Google TV still offers such fare as "The Jersey Shore" and other popular shows from the likes of MTV and Time Warner, the truth is there's nothing to indicate Viacom, MTV's parent company, won't opt out the way Fox did. As for Time Warner, Google TV owners will have access to HBO shows provided one is an HBO paid subscriber. Google said recently it is also working on getting access to Hulu Plus. But again, that's for Hulu subscribers only.

"What's the source of revenue? Nobody knows. They aren't doing this out of the kindness of their hearts. The broadcasters are worried."
--Dan Rayburn, Web video expert

Access to paid TV content isn't sexy. Don't they call that cable?

If you expected to watch a wide range of popular shows for free via Google TV anytime soon, it really is time to panic. The networks are preventing Google TV, a software platform, from streaming to consumers' TVs the same content that's available for free on the Web. But why are the networks doing this and what can be done about it?

Matter of trust
The problem comes down to trust, according to three executives in the TV arena who spoke to CNET on the condition that they remain anonymous because of their dealings with Google. They say broadcasters are wary of Google. Some network executives suspect Google's plan is to position itself between the broadcasters and consumers, the sources said. By being vague about how they intend to profit from Google TV, Google managers certainly didn't put those concerns to rest.

"What's the source of revenue? Nobody knows," said Dan Rayburn, a streaming-media analyst for consulting firm Frost & Sullivan. "They aren't doing this out of the kindness of their hearts. The broadcasters are worried."

Google declined to comment for this story.

According to the three industry sources, the history of the television business is filled with people who made a killing after finding new ways to distribute content and refusing to fairly compensate the content makers. Among the examples most cited in Hollywood are home-video recorders and cable TV.

The bitterness that lingers among broadcasters in this latter area played out in public last month when Fox demanded higher fees from Cablevision. The feud resulted in Fox pulling its content off the cable distributor for two weeks. Cablevision eventually capitulated and paid what it called an "unfair" amount.

All of that sounds ominous for Google but don't chuck Google TV or the company's competitors quite yet. The blueprint for making something like this work was drawn up already by Netflix. We'll get back to that.

First, for Google managers to get the content they want, they need to remake their image in Hollywood.

Decision makers at TV and film companies have become good students of history. They know what happens when companies such as Apple and Google get control of some entertainment sector's online distribution. Apple's iTunes is the largest music retailer online and off and wields enormous influence over the recorded music sector.

Earlier this decade, newspapers were slow to react when Google began aggregating headlines, and before long, news organizations found themselves dependent on Google for traffic.

In addition to all that, many in the entertainment sector remember the search engine's hardball tactics involving YouTube. Google was initially vague about the company's ability to filter for unauthorized clips that YouTube users posted to the site. At the same time, Google was vying to license film and TV content from studios and networks. To some who negotiated for the networks, the implication was that either they licensed their content on Google's terms or else the pirated clips would remain at YouTube.

Google always denied trying to muscle the entertainment sector. What everybody agrees on is that in recent years Google has wooed the film and TV sectors. The company eventually rolled out a filtering system at YouTube and cut licensing deals that culminated with the launch of a YouTube video-rental service.

Obviously, none of that appears to have helped Google get content for Google TV. So, Google appears ready to learn from the unchallenged leader providing Web video to living-room TVs.

Copy Netflix's example?
In September, Google hired Robert Kyncl as head of TV and film entertainment. Kyncl was the former vice president of content acquisitions at Netflix. Last month, Netflix said the company has transformed itself from a mail-order DVD-rental business to a streaming-video service.

If Google follows the path forged by Netflix, expect the search engine to push Google TV onto a large number of video game consoles, set-top boxes, and Internet TVs (Google TV is already working with Sony and Logitech).

However, Google TV must generate a large following. Netflix has acquired 17 million subscribers so far.

Netflix has also paid large sums to acquire content. The video rental service this year penned major deals with Relativity, a media distributor and Epix, a paid TV channel.

Not everyone agrees Google should try to compete against Netflix and the cable companies by offering TV content. Mark Cuban, the well-known entrepreneur and founder of cable channel HDNet, wrote last month that Google's chances of prevailing are slim. He has another idea. Cuban suggests Google should compete by turning Google TV into a game platform.

"If Google, Apple, and their competitors can find simple games that are compelling to tens of millions of people and create a unique experience on your HDTV, they have a chance to start pulling people away from watching shows on TV," Cuban wrote at his blog. "They have to change the game. Not play the same old game."