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Google Planning Live TV Service You'll Probably Never See
Because, Like Many Before It, It Will Be Blocked By TV Industry
by Karl Bode 10:33AM Wednesday Jul 17 2013
In a bit of unsurprising news, the Wall Street Journal reports that Google has approached several of the TV networks in the hopes of creating a streaming TV service. Just like the fifty-gazillion (that may be a dash of hyperbole) efforts before it, Google is eager to launch a subscription TV offering that provides users with a broadband streaming bundle of some of the more popular channels -- sports of course excluded.

Given the battle they're currently waging against a tiny upstart like Aereo, it's hard to think that broadcasters are keen to face off against Google in such a fight, so this effort will likely end like other such efforts have: with a potentially innovative idea running face-first into restrictive cable and broadcast industry licensing designed to crush such innovation. The Journal seems to be wearing rose-colored glasses regarding this part of the equation:
quote:
about two years ago Google had conversations with media companies about a similar over-the-top service, the people said. Those discussions didn't get very far, one of the people said. But the environment has changed since then: not only are several other technology companies actively working on similar services, but pay TV providers are asking entertainment companies for nationwide streaming rights.
Except that no, nothing has really changed, and broadcasters and cable operators are still fighting tooth and nail to prevent these kind of services from ever reaching market. Just because several companies are concurrently "actively working on similar services" doesn't mean we're seeing much progress, since nearly all of them (including the heavily hyped Intel service, as well as services from Apple, Microsoft and others) are constantly running into the same old roadblocks.

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ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

I wonder if Google would sue

I know that sounds crazy, but it's already been confirmed that cable companies have been forcing programmers to sign agreements not to sell to OTT services. One could argue that this amounts to restraint of trade, especially given the dominant market share that cable has.

Granted, Google may not sue, and they may not win, but if they did sue, I have a feeling that some very ugly practices would be dragged out into the light.

tshirt
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Re: I wonder if Google would sue

said by ISurfTooMuch:

... that cable companies have been forcing programmers to sign agreements not to sell to OTT services.

If by FORCING you mean paying them generously for EXCLUSIVE rights, I'd agree.
Google COULD have gone in with an open checkbook and changed some of those exclusives, but some/many content producers see the value of continuing with current distribution exclusives as it's a known factor cost and reliable payer.
You aren't going to see 60 mintues offered on 2-3 different networks, or the tonight show leaving NBC for googleBC (GBC)
just like every other successful network (we'll leave Oprah out of this) google will have to start with others reruns and build reletionships with content producers to develop their own content to stream. once they have a track record more content producers MAY consider using google as a distribution network after weighing the damage to CATV and broadcast market channels revenue.

It's like you having a job with some large and well respected company, and then getting an offer from a newly formed LLC that want you to do your job a totally different way for an undisclosed sum and they may not be in business long if the new way doesn't work.
Would YOU burn your bridges at your current employer/ company?
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Re: I wonder if Google would sue

I think the issue would revolve around whether the programmers felt coerced into signing these agreements. If there were two contracts on the table, with one mentioning Internet streaming and one not mentioning it, then you'd have a point, but if the cable companies only offered a deal that barred streaming, then the implication would be that, if there isn't such a restriction, there isn't a deal.

And your employment scenario doesn't make sense here, since it's perfectly OK for a programmer to offer its content to more than one provider. In fact, they do that right now, with at least one cable company and two satellite companies in a given area. And that may also enter into the equation here. If it appears that the cable companies aren't asking for exclusive deals but are instead specifically asking that a particular platform be frozen out, then that looks more like them trying to use their market power to crush a potential competitor. In this situation, a better analogy related to a TV show would be a network telling a producer that they're free to sell their show to any additional networks they like, except for one or more of them defined in the contract as off-limits.

tshirt
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Re: I wonder if Google would sue

It's still the same network even if it is offered on several delivery systems (from a practical view CATV and Satellite are still broadcasters covering a limited audiance) the difference is delivery method which both CATV and satellite providers are experimenting with On demand/IPTV type systems The fact they pay for exclusive distribution is part of the relationship with the producers and any leverage the hold to prevent a third party IPTV consolidator (google's roll similar to hulu or amazon) is testament to the size/value of the market they represent.

any content provider can choose any distribution form they wish, but it would not be suprising if the compensation offered by broadcasters for a non-exclusive run was substantially less, in fact if broadcaster can't get ad revenue or CATV fees then that content holds little to no value.
I don't think any one has seen Google fiber blocked from offering CATV, so it's not a DON"T sell to google restriction.
Content owner just want the largest, most reliable revenue stream.
mogamer

join:2011-04-20
Royal Oak, MI
said by tshirt:

said by ISurfTooMuch:

... that cable companies have been forcing programmers to sign agreements not to sell to OTT services.

If by FORCING you mean paying them generously for EXCLUSIVE rights, I'd agree.
Google COULD have gone in with an open checkbook and changed some of those exclusives, but some/many content producers see the value of continuing with current distribution exclusives as it's a known factor cost and reliable payer.
You aren't going to see 60 mintues offered on 2-3 different networks, or the tonight show leaving NBC for googleBC (GBC)
just like every other successful network (we'll leave Oprah out of this) google will have to start with others reruns and build reletionships with content producers to develop their own content to stream. once they have a track record more content producers MAY consider using google as a distribution network after weighing the damage to CATV and broadcast market channels revenue.

It's like you having a job with some large and well respected company, and then getting an offer from a newly formed LLC that want you to do your job a totally different way for an undisclosed sum and they may not be in business long if the new way doesn't work.
Would YOU burn your bridges at your current employer/ company?

The trouble is, those aren't exclusive rights, but exclusionary rights. No cable company excludes a network from working with other direct competitors such as cable overbuilders, satellite or telecos. But they do pay to prevent those networks from dealing with iptv providers. I really think that a court case would prove detrimental to the current pay-tv structure. The trouble is nobody will go to court over this because the pay-tv providers have deep pockets and those networks might not even want to deal with iptv providers in the first place. They're just happy to get some extra money from the current providers, even though they have no intention to rock the boat.

tshirt
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Re: I wonder if Google would sue

No court will rule" you can't sell the streaming rights ONLY to the existing buyer, and MUST sell to the newbie. and the fact that the existing buyers have a minimally/ unfinished streaming program developed is meaningless as Google in fact doesn't not have a functional one either.

and IPTV distribution has exclusive deals all the time HULU buys some shows on the basis that NO other rebroadcaster/IPTV provider gets it within their service area, just as amazon gets exclusives in return for payments. and both had to demonstrate systems to prevent/ restrict viewing only to their licensed area.
by definition EXCLUSIVES are exclusionary you just arguing over where the line is drawn
And the sellers (who have the right to refuse or permit service) still see the most profitable path through the traditional distribution exclusively.
What you need is to convince them that the new path you propose will CERTAINLY be MORE profitable with more REGULAR/GOOD customers paying more NET funds to THEM.
Your problem is the people STEALING content, are not in their eyes GOOD, RELIABLE, REGULAR, PAYING CUSTOMERS.

Even if they believed, Pirates et al, would actually purchase more than they steal of some events, they don't believe they will have more TOTAL PROFIT at the end of the two year or five year exclusive contract. perhaps if more people reliably used the existing/legit IPTV channels exclusively that will be a bigger factor when the next contract is negotiated
Joe12345678

join:2003-07-22
Des Plaines, IL
said by ISurfTooMuch:

I know that sounds crazy, but it's already been confirmed that cable companies have been forcing programmers to sign agreements not to sell to OTT services. One could argue that this amounts to restraint of trade, especially given the dominant market share that cable has.

Granted, Google may not sue, and they may not win, but if they did sue, I have a feeling that some very ugly practices would be dragged out into the light.

That MLB Blackout Policy that is working though the Courts likely will show some of the ugly practices.

but why not offer an non sports (with all of the other channels on Google fiber?)

workablob

join:2004-06-09
Houston, TX
kudos:3

As long as they keep trying

I support them.

Blob
xenophon

join:2007-09-17

Re: As long as they keep trying

All it takes is for one major content provider to take the leap and my bet is that the Discovery bundle (Sci, TLC, Animal Planet, etc) will be the first. Once it proves to work out, the others will follow - the question is will it happen quickly after the first bite or will it take years.

buzz_4_20

join:2003-09-20
Limestone, ME
Reviews:
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Again, Piracy leads Innovation

Many of what these companies are trying to do is what Pirates are already doing.

Pirates get to watch TV AD-FREE on all their devices within minutes(if not before) the show airs.

This is what consumers want, they want more control to watch how and when and less ADS draining away precious time.

Many are willing to pay for a flexible service that can deliver ALL the content they want, without all the hassles that currently exist.

tshirt
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1 recommendation

Re: Again, Piracy leads Innovation

Yes, because an economy were people don't pay for each others work and costs to make goods and provide services will REALLY, REALLY work. (and that not all, IF you buy this line of BS right NOW, we'll double your order and actually pay you to steal. extra shipping and handling applies)

firephoto
We the people
Premium
join:2003-03-18
Brewster, WA

Re: Again, Piracy leads Innovation

said by tshirt:

Yes, because an economy were people don't pay for each others work and costs to make goods and provide services will REALLY, REALLY work. (and that not all, IF you buy this line of BS right NOW, we'll double your order and actually pay you to steal. extra shipping and handling applies)

I get more than 12 digital hd channels for free, every major primetime tv show, free, and I don't have to watch commercials.

Who am I stealing from?
--
Say no to astroturfing. actions > Ignore Author

tshirt
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Re: Again, Piracy leads Innovation

But the commercial are there correct? they know a portion of the audience will see them and a portion of that portion will respond.
add product placement and reruns and DVD or internet sales and you can pay for some shows, but you may have noticed less and less high quality shows and more infomercials and reality crap, and cheap talking head type filler in what left of primetime which used to have
Movies of the week
enough different shows to fill 3-6 networks eventually, the movies became too expensive and 22 weeks of shows became too expensive and we went for a few networks to a zillion.
adding less content on more space to fill, at the same time the content production end is struggling to keep above water. yes a few companies still are profitable at the top of the production chain but further down companies can't get financing for "Hollywood" quality show productions, because the likely hood of breakeven let alone averaging a profit across a variety of projects is so poor.
silbaco
Premium
join:2009-08-03
USA
By pay you mean the pitiful $7.99 per month that can't even begin to pay the production costs of shows?

If you want ad free tv you can buy each show, any episode individually from Amazon. It doesn't get much more customizable than that.
elefante72

join:2010-12-03
East Amherst, NY

1 recommendation

Re: Again, Piracy leads Innovation

Define production costs. Production costs have gone down, as distribution--labor costs have gone up unnaturally. When a TV actor makes $2m for for a 22 minute show (Charlie Sheen), I would say that is far past ridiculous, $6m an hour, not counting the other actors and support staff.

As a reference Tim Cook salary last year was $4.2 million for the most valuable company in the world. That doesn't include other perks, but you get my drift. At no point in time does the pay of TV actors even come close to the actual economic benefit they are performing.

When ESPN has to pay the NFL $1.9 billion a year to carry a few NFL games, that is ridiculous A +2x cost over the old contract.
So simple math, of say 50 million cable subs (not all get ESPN), every single cable subscriber has to pass the fee JUST of NFL on EPSN to the tune of $38 a subscriber

And these sports contracts are long term so don't expect any un-bundling this decade because networks cant afford to.

The list goes on and on and on...
Kearnstd
Space Elf
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Re: Again, Piracy leads Innovation

The thing is as long as one TV production company is willing to pay the stars what they demand they will keep getting millions per episode. It would take every production firm to flat out refuse them a per show payment system for the cost of the acting staff to come down.
--
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tshirt
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join:2004-07-11
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said by elefante72:

Define production costs. Production costs have gone down, as distribution--labor costs have gone up unnaturally. When a TV actor makes $2m for for a 22 minute show (Charlie Sheen), I would say that is far past ridiculous, $6m an hour, not counting the other actors and support staff.

I'm a little confused here, sheen and company definitely raised the production cost of that show. and the whole firing replacement thing wasn't cheap either.
sure Sheen was paid a huge amount but if he attracted 50 million eyeballs on seeing even a glimpse of a commercial for widgets and the next day an extra 100,000 widgets are sold that's what that type of show does and why it pays hugely for success.
In fact it's exactly what Tim Cook does (though not usually in the first person) is convince you that Not only are APPLE product better , that they are worth a premium price and a short refresh cycle.
even the NFL cost/value is about advertising, but cable has misjudged it's value to me, and I will keep pushing to move sports and particularly sports only cost (ESPN/2/3 and any other sports only networks) on to the backs of the sports nuts.
Even if you look at the main ESPN as an advertisement for some of the other sports premium channels (the pusher offering a future junkie his first taste) those channels should carry all the cost. if it doesn't cost me directly (ie shopping channels are not on my list, but since they are self supporting I don't find them offensive, as I don't have to watch them) it's ok

I think I did not mean to approve your message, at least until I better understand it.
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL
This is true. Whether you support it or not, it's a well-known fact that pirated content is often more convenient for people to use. Unskippable trailers on DVD's, region restrictions, and the fact that some regions get content in better formats (widescreen vs. pan and scan, price, or release date) are just a few items. And there is at least one great TV show (WKRP) that will likely never come to DVD in its original form because all the copyright owners involved will never agree on a way to share the profits.

It's also true that a legal service would attract tons of business if it's priced reasonably. Netflix is proof of that. But the entertainment companies' definition of what's reasonable and everyone else's definition are quite different. And all these annoyances are put there as revenue generators. It's just like the obnoxious car commercials--we may hate them, but as long as the companies believe they generate revenue in some way, they will fight tooth and nail to keep them.

buzz_4_20

join:2003-09-20
Limestone, ME

Re: Again, Piracy leads Innovation

Thank you ISurfTooMuch, that's much better than I could have said it.
silbaco
Premium
join:2009-08-03
USA
Netflix isn't priced reasonably. Even if the price were doubled it still wouldn't generate enough revenue. The money made from Netflix is miniscule compared to the money made from ads, retransmission fees, and actual sales.
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Re: Again, Piracy leads Innovation

The thing about "reasonable" is that it can't be dictated by the seller. What is reasonable is only what someone is willing to sell something for AND what someone else is willing to pay for it. The movie studios have to understand that their product really isn't worth that much to the individual consumer anymore. If Redbox can make a profit by buying DVD's and renting them for $1.20, that doesn't leave much room for the studios to price much higher. Sure, they can try raising DVD/Blu-ray prices to $100, like they used to do with VHS, and that may cause Redbox to raise prices or go out of business, but, in the process, the studios just killed off sales to consumers, and piracy will go through the roof.

The studios have put themselves in a bind. They want to sell to consumers, so they price discs within reach of those consumers, but they also price them within reach of places like Netflix and Redbox, who can rent them for just a few bucks. But, to make these companies unprofitable, the studios would have to raise prices and thereby destroy the consumer sales market. Their only way out is to move toward streaming-only, but then piracy becomes an even bigger problem, since many people will resist ongoing payments to watch the content they feel they should only pay once for.
silbaco
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USA

Re: Again, Piracy leads Innovation

DVD rentals are but a small concern to movie studios. They have always existed. Before it was Blockbuster and libraries, now it is Redbox. Different methods, same principal. Nothing has really changed there. The problem is people wanting to abandon cable tv (therefore retransmission fees and ads) and buying tv shows/movies in favor of streaming. Hollywood would be very willing to embrace streaming if it actually made them money. But it doesn't. People are not willing to pay the price it would take to make streaming viable for studios. Hence is why they are clinging to their old ways. Because those ways actually do pay the bills.
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Re: Again, Piracy leads Innovation

They do pay the bills, but only as long as people stick with cable. Many are, but more and more are leaving because they feel the price is too high. Now, assuming that this trend continues, something will have to give. If people won't pay for cable, and, by extension, the price the studios want for streaming, then the studios must drop their price, and, in the process, either cut expenses or cut profits. Something will have to change.

The thing is, movie budgets are absolutely insane. I remember when Terminator 2 came out, and people were shocked to hear that it cost over $100 million to make. Now, no one blinks an eye at such costs. But, looking back at the decades of moviemaking, I can't see that more recent films have been any better than older ones with much smaller budgets. In fact, the ones loaded with special effects are, with a few exceptions, the ones with the least plot.

buzz_4_20

join:2003-09-20
Limestone, ME
Reviews:
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Again, many consumers would argue with that. I for one think Netflix is priced well.

Enough is very relative.
Netflix seems to be making money.
And they buy discs and content, therefor the content producers are making money, so what's the problem?

Oh yeah, if you don't get 100% of the possible profit out of something you've failed.
You can't just sell something for a fair price and get a decent profit out of it, you've got to get every tiny bit of profit you can.
silbaco
Premium
join:2009-08-03
USA

Re: Again, Piracy leads Innovation

It doesn't matter what consumers think. Netflix doesn't pay the bills. Copyright holders get at most 70% (industry standard) of the $7.99 per month. $5.60 per month, divided up among everyone, does not begin to pay for the costs of producing tv shows, let alone actually make a profit off your work.

Corehhi

join:2002-01-28
Bluffton, SC

Re: Again, Piracy leads Innovation

said by silbaco:

It doesn't matter what consumers think. Netflix doesn't pay the bills. Copyright holders get at most 70% (industry standard) of the $7.99 per month. $5.60 per month, divided up among everyone, does not begin to pay for the costs of producing tv shows, let alone actually make a profit off your work.

Netflix is a second run vehicle for the most part. Let's say movies the movies already had their theater run and most likely DVD run before that get to Netflix so it's basically just adding more money on top of what has been earned. Of course I'm sure Netflix pays more for first rental run movies etc.
Kearnstd
Space Elf
Premium
join:2002-01-22
Mullica Hill, NJ
kudos:1
said by silbaco:

It doesn't matter what consumers think. Netflix doesn't pay the bills. Copyright holders get at most 70% (industry standard) of the $7.99 per month. $5.60 per month, divided up among everyone, does not begin to pay for the costs of producing tv shows, let alone actually make a profit off your work.

However once most TV shows hit Netflix the 5.60 per month is 100% pure profits with zero cost to the copyright holder.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports

Corehhi

join:2002-01-28
Bluffton, SC
said by buzz_4_20:

Many of what these companies are trying to do is what Pirates are already doing.

Pirates get to watch TV AD-FREE on all their devices within minutes(if not before) the show airs.

This is what consumers want, they want more control to watch how and when and less ADS draining away precious time.

Many are willing to pay for a flexible service that can deliver ALL the content they want, without all the hassles that currently exist.

That's unrealistic it's all about profits and no company is going to sit there and say how can we make this cheaper for consumers. It's always about more profits. You have to realize before the internet the content providers were having a field day. All about power and money these are not charity organizations.
PastTense

join:2011-07-06
united state

Cable vs Satellite Comparison

I remember that there were similar conflicts between Cable TV and Satellite TV. Does anyone remember how those conflicts were resolved? Did Congress get involved?

AlexNYC

join:2001-06-02
Edwards, CO

Internet TV is coming one way or another

Averio, Apple and Google are all in the race. Internet TV is coming one way or another. I watch 40 channels of Bulgarian television on www.neterra.tv live or recorded over the internet and I can guarantee you that in a few years we will see this kind of service in the US.
The dinosaurs may fight it all they want, but things will change very soon. I already cut the cord and use OTA and internet for everything I need. The old business models will need to change or the companies will perish. $150 for cable TV very little good content each month is just not worth it.

tshirt
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Re: Internet TV is coming one way or another

said by AlexNYC:

Internet TV is coming one way or another. I watch 40 channels of Bulgarian television on www.neterra.tv live or recorded over the internet and I can guarantee you that in a few years we will see this kind of service in the US.
The dinosaurs may fight it all they want, ...

That's the confusion (that Karl spreads) That they aren't fighting it, they are fighting for CONTROL of it, and yes within a few years you will see largely IPTV.
However broadcast will Always be a more efficient way of distributing content and scheduled tv always audience/fan development in a way that internet/on demand/ very individualized only viewing does not.
and high-quality movies/video that people WANT to watch on tv* ' ** needs a large audience to support the production costs.

* Tv=generic video entertainment device
** WANT not including cat videos, reality shows, drunk girl on web cam/cell phone falling on? thing better movies, dramas,comedy and other well made serials.
elray

join:2000-12-16
Santa Monica, CA
Reviews:
·Time Warner Cable
·EarthLink
No, it isn't.

For the content industry to change their distribution methods, they'd have to see a clear and greater profit potential than today's pay-tv last mile(s).

The only way to assure that, is for Google/Microsoft/Apple/Netflix/Samsung/LG to pony up an 11-figure down-payment for the right to also stream traditional content, which they aren't going to do.

•••••••

stvnbrs
Premium
join:2009-03-17
Cary, NC
kudos:5

Not until they are broken apart

Just look at the assets of these cable providers. No wonder there are monopolies and inflated prices for the consumer, almost all the channels are owned by one or more of the cable providers. We now live in an age of advertising, to the point that even some news agencies resemble "reality news" in order to garner more viewers for.. you guessed it... advertising dollars. We pay to watch tv where we are using 30% of our time looking at commercials, being told that we can't use the service that we are already paying for outside an approved advertising laden medium without some other form of advertising medium in place. Pop-up ads assault us as soon as we go to a webpage and marketing is so pervasive that many don't even realize it anymore. If I could get the wife to agree I would remove all TV from the house as even the news is poisonous.
--
Goggalor: "Freedom of speech is not freedom of asshattery."

tshirt
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join:2004-07-11
Snohomish, WA
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Re: Not until they are broken apart

said by stvnbrs:

Just look at the assets of these cable providers. No wonder there are monopolies and inflated prices for the consumer, almost all the channels are owned by one or more of the cable providers.

Keep going.
Most of the cable companies are owned by Stockholders, who have loaned their money to the cable providers in return for earnings.
being widely held, the stockholders are for the most part small individual investors though often bundled together as part of pension funds and mutual funds and life insurance companies and some (smarter) individuals who saw content management and delivery as a growing field up to 50+ years ago.

The prices are inflated, by inflation but if it's a product you don't think is worth the cost turn it off and go with something else or nothing at all.
the pervasiveness of advertising is pretty common across all societies and is the whole point of TV and much of the internet so excluding ALL of it may be difficult (the Amish are look for a few good men, with a few stricter rules then the marines intended to keep that stuff out.)