Google TV endures rocky start

20 December 2010

NEW YORK: Media company concerns have made it difficult for Google to branch out into the lucrative US television sector.

All of the nation's four major networks are yet to provide Google TV users with access to their online video content, partly due to concerns that such a deal would erode broadcasters' own ad revenues.

Google TV integrates the company's Android operating system and Chrome web browser, and is bundled in with TV sets and set top boxes.

Users can browse the internet while watching TV, and can even use their smartphone as a remote control.

Products from Logitech and Sony including the service went on sale in the US in October.

TV remains the world's biggest destination for ad dollars by far - and TV shows tend to contain four times as much ad space as shows rebroadcast on the web.

According to Warc's latest International Ad Forecast, total internet spend will reach $56.7bn (€42.9bn, £36.5bn) in 2010.

This is dwarfed by predicted TV expenditure of $121.1bn.

Commenting on striking a deal with Google TV, Leslie Moonves, ceo of CBS, said: "The mother lode is network advertising and syndication ... Do I want to jeopardize that - yet - for a couple of bucks?"

Possible future solutions include the revenues for ads viewed via Google TV being shared by both sides, or Google offering some form of initial payment for the right to access content.

But Google TV offers significant advantages over traditional TV for advertisers, including the ability to track individual user preferences in order to target communications more precisely.

Rishi Chandra, lead product manager at Google TV, told Bloomberg that the development of the service would "take time".

He added: "Our job from a platform basis is to make sure that we support all the different business models that they want to support."

Figures released by comScore earlier this week show that Google is still dominant in its core search business.

In November, the firm had a 66% market share, with its nearest rival, Yahoo, retaining just 16%.

Data sourced from Bloomberg/Warc; additional content by Warc staff