What’s wrong with Google TV?

by measure of sheer punditry, rumors and competitor jocking, Google TV is dead on arrival. Hardly. But rumors – it was published in the mother of business reporting, theWall Street Journal — claim that Google has yanked the software (and, therefore, third-party hardware) from next month’s Consumer Electronics Show. Meanwhile, today, Apple gave Google a noggie by announcing Apple TV shipments would reach 1 million units this week. Perhaps worse, Chip Trick is reporting a tempting last-minute holiday deal – the Roku XDS for a cool 80 bucks. The cheapest Google TV device costs $300. Yeah, Google TV isn’t having a good week, and it’s only Tuesday!

Google TV has a future, despite all proclamations of its early death. Television is important to Google, because of advertising competition. According to research released this week by MagnaGlobal, US online ad revenue surpassed newspaper advertising in 2010, with projections of topping all print ad spending in 2014. But TV still tops all categories, and by considerable margin — more than twice as much as Internet advertising, and that continues through MagnaGlobal’s forecast period when in 2015 TV ad revenue will near $100 billion and online ad revenue tops $44 billion. Ad dollars aren’t moving fast enough online for Google, with TV being the jewel the information giant needs to add to its advertising and search crown.

Google has a superior reasons to be committed to its TV software. But there are problems, otherwise Google TV’s situation wouldn’t look so hazardous so early on. That said, peril is business as usual for Google. Starting in 2003, when Google moved to first place in US search share and stayed there, pundits warned the company was a feeble, one-trick pony. People could switch search engines by typing a new Web address, and that would be the end of Google. Then Google moved into e-mail, with a Gmail beta that lasted five years. Critics circled like vultures, as they did for other products, like Google Docs. What about Android? US analysts, bloggers and journalists pined for iPhone when T-Mobile shipped the one and only available Android phone in autumn 2008. Now look where the mobile operating system is today. It’s US share is greater than Apple’s iOS — 44 percent to 23 percent in third quarter, according to NPD. Still, Google TV could go to the great settop burial ground that Microsoft knows so well. I see fundamental issues that Google (and its partners) must immediately address. Confession: I’ve only used Google TV at my local Best Buy store. I’ve asked Logitech for a Revue review unit but haven’t heard that one is available.

1. The first devices cost too much. How strange is that, considering Google is the king of free? Apple TV and Roku have set the price bar at $99, which is an easy purchase for most consumers. Google TV devices cost so much more — $299.99 for the Logitech Revue and $399.99 for the Sony Internet TV Blu-ray Disc Player (Logitech is running a $50 discount, so $249.99, for the holidays). It’s hard from the demos to see the benefits over Apple TV or Roku, which offer many of the same streaming services, such as Netflix. Apple TV has got drop-dead-simple rentals — 99 cents for TV shows and $4.99 for HD movies.

2. Consumers don’t want Internet on the TV. Just ask Microsoft, which purchased WebTV in 1997 and could never make a business of it. Consumers are more likely to watch television and access the Internet from a tablet while sitting on the couch (gasp, can you say iPad?). But TV-like content, such as Hulu Plus, Netflix or YouTube makes sense. So do applications, particularly games, that consumers are already accustomed to doing on the TV. From my small experience using Google TV in stores, it’s not enough about TV-like content, which, by the way, fits better with Google’s advertising objectives. Something else: Consumers would benefit, if finding stuff to watch was easier — that’s something Google TV offers. Google should better promote content search benefits for helping TV watchers find content that matters most to them.

3. CES could be but shouldn’t be Google TV’s funeral. The rumors had better not be true. It seems inconceivable that the prince of betas would leave hardware partners crying at the Consumer Electronics Show alter. Google and its partners absolutely should show off Google TV during CES, even if the software changes in just a few months. Consumer electronics manufacturers typically showcase stuff that won’t ship for months, often not until the holidays –so what if the software changes later? It’s better that Google show off something, even if changes will come later on. More importantly, Google shouldn’t peeve its partners. The next iteration of Google TV doesn’t need to be ready for primetime during CES, it just needs to put on a good show.


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