|reply to xenophon |
Re: Average consumers will want TV comparable to cable
said by xenophon:STBs already know exactly what you watch and when you flip channels. However, this data isn't as interesting as it might seem, since they can largely predict what you watch from demographic information they have about your household.
I could see Google convincing the TV content industry based on customized user-based ads, not just based on TV viewing habits but using web browsing habits, email content, text content, Google wallet orders, Android apps liked, Google+ interests as well. Would fit into their consolidated user history thing recently rolled out. Will be scary privacy violation to some but the masses apparently don't care if it means more free services from the Googleverse. As long as the data mining truly anonymous, they'll probably get away with it.
If Google gets a piece of the TV ad revenue stream, they could potentially provide tv/gvoice/gigabit internet for $50/month.
Will be curious if the TV industry will bite. On one side they potentially get user-based ads, Nielsen like rating info but would they want Google to have that much power?
So, the way TV ads are setup, an average hours of TV has 12 minutes of ads. The originating network sells and inserts 10 minutes of ads and the cable/IPTV/Google sells and inserts 2 minutes of ads. The cable people also don't get to insert any ads into the local broadcast channels (ABC,NBC,CBS, Fox, and anything you can get off an antenna).
The rough rule of thumb is that a large cable company can make about $2 a month per sub with ad insertion. This isn't enough to have much influence on a cable bill.
For more precise targeting to be very profitable, Google would need to get more than their 2 minutes an hour of ads - the networks would have to share. Also, Google wouldn't have enough viewers to make this profitable.
Finally, inserting targeted ads into live TV is hard and expensive to do well.
Google could leverage their YouTube infrastructure to do VOD and VOD advertising, since all you really need for VOD is DRM, distribution servers, content, and the ability to inserts ads according to a schedule. However, so far, the revenues in VOD ad insertion are a lot lower than in live Tv ad insertion.