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Google TV plan is causing jitters in Hollywood

Many worry that Silicon Valley will upend the entertainment industry just like the Internet ravaged the music and newspaper industries.

August 17, 2010|By Dawn C. Chmielewski and Jessica Guynn, Los Angeles Times

Cable operators, television programmers and others have in recent months journeyed to Google's headquarters in Mountain View, Calif., for a demonstration of Google TV, parking themselves on a black leather couch across from a Google TV-enabled Sony flat screen TV resting on a desk draped with a black cloth.

Dureau and Chandra say Google's software — and the developers who would use it to create legions of new applications — would give viewers more bang and content producers more bucks, much the same way innovation from Google and Apple have transformed the mobile phone industry.

"We fundamentally believe the advertising mechanisms we have online will improve ad products on television, whether we do it or someone else does it," Chandra said.

Analysts agree: They say the Internet is coming to television with or without Google and that it's the only medium that can bring with it the long-awaited promise of targeted and interactive advertising. Yet trepidation continues to trump optimism among television executives.

"While CBS is open to discussing additional ways to distribute our content, we need to have a firmer understanding of Google's plans for monetizing the content that flows through Google TV before we accurately evaluate the opportunity," said Anthony Soohoo, senior vice president of entertainment at CBS Interactive.

In meetings, Google touted the software as presenting a new opportunity to make more money from TV shows distributed online. Google erected a massive technology infrastructure to make money on online video — and not coincidentally take a small piece of every transaction.

But broadcasters are worried about Google gaining too much control over online video advertising. The company continues to advocate an advertising auction model that's been successful in its core search business, whereby search terms are sold to the highest bidder. That makes perfect sense for a manufacturer selling digital cameras, but it would be disruptive for network ad sales, where prime-time hits are bundled with other less-popular shows so that the winners pay for the losers.

Google needs the cooperation of the programming community to improve the overall effectiveness of video search. Right now, Google TV isn't very effective in correctly identifying TV shows. In demonstrations with network executives, Google TV confused one network's shows for a rival's. On another occasion, it listed the several ways a popular prime-time show could be watched online and on TV — except on the network's own website.

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