Can Google’s Online TV Kill Cable?

July 18, 2013 Leave a comment

Can Google’s Online TV Kill Cable?

The Internet is coming for your TV.

Google is in discussions to create an online-television service, the Wall Street Journal reports. While they face roadblocks, Google and other technology companies’ efforts to marry Internet with TV represent a telling shift in the Web’s increasing role as the backbone of our communications networks.

The idea: Let users stream live channels and on-demand shows on their TVs — just by connecting to the Internet. This combines the traditional TV packages of cable and satellite companies with the newer model of Netflix, Hulu and Amazon.com.Google’s rivals are also looking to leverage Internet on the TV set. Intel plans to launch a so-called over-the-top TV service before the end of the year. Apple is adding content to Apple TV and developing ad-skipping technology. Small cable company Cox Communications recently started selling a trial bundle of almost 100 channels to customers in Orange County, California who have broadband but not cable TV.

Accessing Internet on a TV is already common: About 44 percent of U.S. households have a TV set connected to the Internet, either through a video-game console, Blu-ray player or streaming device, up from 38 percent a year ago, Bloomberg News reports. (Google already offers Google TV, a software platform that lets users watch online videos on their TVs.)

And watching videos online is the biggest use of Internet traffic in North America. Netflix accounts for about one third of peak-period downstream traffic on broadband networks, according to a recent study from Sandvine Intelligent Broadband Networks. YouTube, which Google owns, accounts for 17.1 percent, up from 13.8 percent a year ago.

Just don’t cancel your cable subscription yet. Google had discussions with media companies about a similar service about two years ago, without luck, and it’s not clear how far along plans are today, or when it would launch. There’s no guarantee Google could get the licensing deals it would need to put together a service that could compete with cable and satellite providers. Media companies might be reluctant to upset existing contracts in favor of a new online service and are generally more likely to give the best prices to providers with large numbers of subscribers.

Can Google and others compete against the Time Warners 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.

(Kirsten Salyer is social media editor of Bloomberg View. Follow her on Twitter.)

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Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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