The launch of Google TV is a watershed moment in the television industry, and we’re just beginning to see the fallout.
For the first time, a large consumer electronics company (Sony) is marketing a television set and Blu-Ray player with the web seamlessly built in both devices (see our review). Sure, there are lots of other ways to do it, but for the first time, Sony and Google have made it easy for the average consumer.
And that’s why the networks, along with Hulu, have blocked their video streams from appearing on Google TV’s browser. Watching CSI via CBS.com on your TV set is no longer “incremental” — it’s a substitute to watching it via your CBS affiliate. “I personally can’t think of anything stupider for the big broadcast networks to do than give their shows to Google for free,” writes HDNet founder Mark Cuban on his blog. Cuban also left a comment on NewTeeVee, which posted a story that called the networks short-sighted for blocking Google TV. “Do you know anything at all about the broadcast TV business?” Cuban wrote.
The heart of the issue, Cuban says, are retransmission fees paid to networks and local station groups. “They are finally getting BILLIONS of dollars in retransmission fees from their distributors,” Cuban writes. “This is new money. It is found money. It is money they are fighting for. Just ask Fox and Cablevision what they think of each other this week.”
News Corp. has even said the future of the broadcasting business hinges on retransmission fees, which may explain the ferocity of the negotiation with Cablevision. Fox is reportedly asking for $150 million a year in retrans fees, up from $70 million. As of this writing, the standoff continues.
Interestingly, Cuban suggests that Netflix could subsume Google TV because it pays content providers — and Netflix is available via Google TV. “Why wouldn’t/shouldn’t the broadcast networks offer all of their shows to Netflix as a way to reach Google TV users, knowing that they will get paid for their content,” Cuban writes. Very interesting times…