Google's effort to launch Android-based set top boxes by the end of the year is running into reluctance from content owners skeptical of the company's business model.
According to a report published by the Wall Street Journal, Google's efforts to extend Android into the TV business is running into TV networks that are "reluctant to partner with a service they believe encroaches on their turf."
Google hopes to bring the value it adds on the web to TV content, providing a mix of data about an selected episode together with web-related content, with search features thrown in. "Content owners, though, are skeptical that Google can provide a business model that would compensate for potentially cannibalizing TV owners' existing broadcast businesses," the report stated.
Google's software "aims to play any video that runs anywhere on the web, from clips on YouTube to full-length TV episodes that media companies distribute on their own sites. That open pipe has some media companies worried that their content will get lost amid a range of Web content, including pirated clips, according to people familiar with the matter," the report stated noting that "Google's push could backfire: Some media companies are discussing whether they should take steps to block their Web video from playing on certain devices, which is technically possible."
Unlike Apple, Google does not have an equivalent media store to iTunes, where commercial movies and TV episodes can be purchased or rented. "Google executives haven't yet figured out a business model around the listings feature, according to people familiar with the matter, who say they are waiting to generate usage first," the report states.
Google hopes to get a piece of the $70 billion US TV ad market, but to do that it needs to muscle into the ad revenues earned by national networks and their local affiliates. Web-centric TV ventures, like the networks' own Hulu, are contractually prevented from displaying their content on TV to prevent cannibalization of cable TV revenues.
The company has already faced the ire of online newspapers and book publishers, who see Google's liberal use of their content as both infringing upon their rights but also valuable in generating traffic.
Apple is already in the TV business, albeit as a "hobby" level, with Apple TV, which enables users to view content from iTunes, as well as syncing photos and other content from desktop computers. Apple is also rumored to be optimizing its TV product with a new iOS-based device that would function like a TV-connected iPod touch, wirelessly streaming iTunes content to a user's TV while also opening up the potential for custom apps.
The TV set top box market has found few successes, with the well-liked TiVo failing to make money while Microsoft's DVR-centric Media Center PCs finding insufficient traction to maintain the interest of computer makers. If Apple can successfully launch its new TV appliance at a low price point, it could give the company a strong third product launch following iPhone 4 and the iPad, which similarly entered a moribund market and stoked major new interest from consumers and developers.