The WSJ and NY Times reported that Google wants to offer live TV channels as well as pre-recorded TV shows (On Demand) using the public Internet. The two newspapers indicated that the service would share a closer resemblance to cable TV than to streaming services like Hulu or Netfix, allowing customers to select channels online in real time, just as they do on cable, satellite or telco TV. The move would be a potential boon to the company’s struggling Google TV service. Intel, Apple, and SONY are reported to be working on similar services.
The problem for those and any other new broadband TV provider will be in securing reasonable, nonrestrictive licensing deals from media companies that own the video content. Many analysts believe those companies (Time Warner, Disney (which owns ESPN and ABC), Fox, CBS, NBC/Comcast, Viacom, etc) are more likely to help out legacy program distributors (cable, satellite, telco TV providers) rather than broadband Internet newcomers. Another question is whether both popular and unpopular channels will be bundled into various packages offered to consumers.
Bloomberg’s Kirsten Salyer asks “Can Google’s Online TV Kill Cable?” Perhaps, but not right away she says: “Can Google and others compete against the Time Warner’s in terms of price and content? Not immediately, but news they are trying is a warning that TV providers are going to have to be more innovative about how they adapt to the Web.”
Will Google offer live video in It’s proposed Broadband TV Service? That’s really the key to differentiating a Google Web TV service from the video on demand streaming services now offered by Netflix, Amazon and Hulu.
As the WSJ article notes, Google has already financed original programming for YouTube and offers or plans to offer TV and Gigabit Internet service in cities with Google Fiber – the company’s broadband, fiber optic Internet service .
Unique Insight and Perspective:
Indeed, what this author finds most interesting is Google ability’s to offer live and recorded TV programming on Google Fiber, which is now sold in Kansas City, MO and Provo, Utah. It will soon be available in Austin, TX, according to the Google Fiber website.
There’s another interesting angle which no one has yet identified till now: a further broadband Internet capacity crunch brought on by the web newbies streaming real-time and on -demand programming. This will require new broadband Internet peering agreements between CDN providers and ISPs. It became a critical issue when Netflix video streaming became popular a few years ago and that company contracted with Level 3 Communications for a Content Delivery Network (CDN) to deliver its streaming video.
In 2010, Level 3 Communications and Comcast (the largest broadband ISP in the U.S.) entered into a legal battle related to the costs of the former’s broadband data flowing into the cable company’s broadband Internet access network. Level 3 complained that Comcast had begun charging a new fee to deliver Level 3 traffic (mostly Netflix streaming) to its own subscribers. Level 3 called the fees unreasonable. Comcast argued that Level 3 was trying to send heavy traffic across its network without bearing its fair share of the cost.
The dispute was settled yesterday with the details not disclosed. On July 16th, the two companies said they had “resolved their prior interconnect dispute on mutually satisfactory terms.” The agreement changes how Level 3 routes traffic across Comcast’s network, sharply cutting the fees the backbone provider must pay when traffic overwhelms certain connections, a person familiar with the matter told the WSJ.
One blogger at the Benton Foundation wrote that she “suspects the resolution of the Level 3 and Comcast dispute involved some sort of network re-engineering.”
The peering arrangement and any network re-engineering could help both companies (and serve as a model to others) to avoid the kind of standoffs and gridlock that will almost certainly occur as the volume of Internet video traffic soars.
What few pundits realize is that some form of CDN or equivalent will be needed to transport the high volumes of streaming video, in real time, to wireline broadband ISPs. Hence, peering arrangements and billing agreements will need to be made between those two types of network operators.
We can expect a further explosion of broadband traffic resulting from new streaming video services from Google, Intel, Apple, and SONY joining Netflix, Amazon, and Hulu. Are the network operators prepared for this? This author doesn’t think so!