Will Google TV do to Hollywood what Napster did to the music biz?

My colleagues Dawn Chmielewski and Jessica Guynn have a fascinating Page 1 story in our paper today about the upcoming arrival of Google TV, which would allow viewers to watch movies and TV shows "unshackled" from the networks and cable channels that currently send them to our homes. It's the unshackled part that has Hollywood in a tizzy. As my colleagues dryly put it: "Entertainment industry executives fear Google TV will encourage consumers to ditch their $70 monthly cable and satellite subscriptions in favor of watching video free via the Internet."

In other words, Google TV could do to Hollywood what Napster did to the music business by upending the industry's entire carefully calibrated business model. If you can watch nearly everything you want to watch without dealing with a middleman, it could be a liberating experience for consumers but a disaster for the old media giants who've been raking in giant profits from their programming. Guynn wrote a separate piece for our business section that actually shows a young San Francisco couple, sitting in their living room, watching everything from AMC's "Mad Men" to Facebook updates and Flickr photos, all on the same TV screen. As it turns out, one member of the couple is running the marketing campaign for Google TV, so they're simply testing out the new venture.

But in Hollywood, everyone is wigged out about the dire possibilities of Google essentially inserting itself between the studios and their customers, since it remains unclear just how Google plans to compensate studios for their content or manage the advertising revenues from the shows it airs. In fact, the story makes it clear that Google's much-touted video search capacity isn't all that accurate, especially when it comes to identifying what networks envision as the most obvious place to find a show--their own websites. When Google had demonstrations with network execs, its TV confused one network's show for a rival's program and, even worse, "it listed the several ways a popular prime-time show could be watched online and on TV--except on the network's own website."

Ouch!

As I wrote in a post the other day, whenever new technology emerges that allows consumers more choices, it is inevitably a destructive experience for the companies making money off the old model, since they are the ones who find it most difficult to embrace and take advantage of the sweeping changes. Nearly all of the wealth that has been generated by new media technology in recent years has gone to entrepreneurial companies from outside of the old business--Apple, EBay, Amazon, Netflix and Google, even before its ambitious attempt to move into TV.  I suspect the networks will fight tooth and nail to stop Google from invading their lucrative territory, but when it's an old media company battling a new media company, the winner comes from the new media camp nearly every time.

RECENT AND RELATED: CAN HOLLYWOOD HANG ON TO ITS AGING BUSINESS MODEL?

Photo: Google Chairman Eric Schmidt. Credit: Laurent Gillieron / European Pressphoto Agency

Comments

[hysteric erik]

and who are the biggest losers? the artists. the writers, directors, actors, etc who make a living getting paid to make entertainment. If everything is free, the work has NO VALUE. Thanks again Internet for gutting yet another creative industry, making everyone stupid, and bowing down to the almighty advertising dollar. And yeah, you too, you lazy, greedy sack of crap sitting there reading this. what if everything you did to make money was suddenly available on the internet for free? Goodbye house, food, insurance, security...everything. Screw. You. Google.

[Joe]

Anybody who has a little knowledge already watches all the TV shows you can imagine "unshackled".

[Jim]

If you go back a hundred years, actors earned money by actually doing live performances. Now, through the magic of TECHNOLOGY, they have been able to do one performance (~1 month of work) and make 20 million dollars. What technology giveth, it may also taketh away. By the way, the people who invented that technology that enable you to make a load of money, never made 1/100 of what the artistic exploiters made.

[Wilder]

I agree Erik, but the "Big guys" are jerks and its about time someone knocked them off their thrown

[kheszi]

@hysteric erik: artists, writers, directors, actors who still have their wagons hitched to big media need to wake up to the fact that times are changing, and new media/the internet is here to stay. now is the time to seek out uncharted territory and create new revenue by building and monetizing consumer-direct distribution channels rather than relying big media to protect old revenue channels through pointless litigation and threats. in the same way that the iPhone taught us that a pervasive and accessible micro-payment system can promote innovation as well as being profitable; so too will the internet empower content creators to seek out and expand to massive new audiences hungry for entertainment. Bypass big media corporations, and make them irrelevant! Reach out to your audience instead of alienating them! It is the "fat, lazy, greedy" unions and media corporations that are soaking up entertainment dollars and keeping the industry stagnant, not the consumers. Don't be a slave to keeping big media's obsolete business model afloat - break free and give consumers what they want at a price that allows them to WANT to buy more...

[pollyanna downe]

Did you know that Google has a PERMANENT RECORD of every internet search you've ever made using their search engine? And that every one of these searches is identified as being done BY YOU?

Did you also know that G-mail saves every e-mail you've ever sent or received PERMANENTLY? And they don't do this so you have permanent access to them, because you don't. BUT THEY DO.

Don't you wonder why they do these things?

Don't you wonder what they're doing with all of your information?

If you care at all about your personal privacy, use Bing or Yahoo for searches, and use Hotmail, MSN, or Yahoo for e-mail.

Send a message that a flagrant invasion of one's personal privacy is un-American, and ditch Big Brother.

[Steven Deedon]

Google leadership showed its hand early on, declaring that they hoped to be the gatekeepers of all the knowledge in the world. Eric Schmidt of Google is the 'Animal Farm" pig of the early 21st Century: When Eric Schmidt repeats the slogan, "Don't be Evil," he might as well be Hitler sloganeering to European Jews. The Google management is a gaggle of predatory corporate megalomaniacs who are happy to destroy entire industries rather than develop new markets and new niche products. They have wreaked havoc with the book publishing and news industries with impunity, they are trying to do so with the internet, and they have the same psychopathic approach to the visual media. Microsoft was a monopolist welterweight compared with this monster. FCC regulators and all the rest of us need to do everything we can to contain this menace and break it up.

[Jeffrey]

Disruptive technologies emerging in a free market economy often lead to the development of new industries, jobs and investment opportunities. I'm sure there were just as many highly charged comments at the emergence of the first printing press, newspaper, radio, magazine, moving pictures, television, internet, etc.,. This being the case, being hysteric (or paranoid) really makes no difference in the long run, as change is assured in this modern technological era. Businesses that are well managed, will evolve and adapt. Those that do not, simply find a certain path to extinction. That's the way capitalism works, like it or not.

[mrl]

I like the idea but I'm not sure I think this is really feasible. Hulu and other media sites have been suffering lack of support from big media companies who do not wish the system to change. They wont liscence their content for free and are unwilling to let go of the reins of control. How does google intend to change this?

Also...ug. Google. I love google's search engine and adsense is amazing. But their track record with applications and other satellite services is abysmal. They fail like pros at this stuff and I don't want to see the next attempted push at freeing up the media to go the way of hulu and the like. The notion wont survive too many more failed attempts.

Just some food for thought.

[Film Slate Magazine]

I have to agree with Jeffrey.

All new technology throughout history is greeted with fear and hysteria, but at the end of the day most industries adapt and everyone they're involved with usually adapt.