Internet behemoth set to launch TV initiative

Google is now on your TV.

It’s already the dominant search engine online — and growing its presence on cell phones with Android — but Google’s announcement Thursday that it will launch Google TV later this year marks the company’s latest attempt to control how consumers browse the Internet from any screen.

Google TV will essentially enable viewers to search the Web, as well as programming offered by cable or satellite providers and entertainment stored on computers, using a remote or wireless keyboard, as long as the TV set is able to connect to the Web. A viewer’s favorite website can be turned into a widget stored on the TV screen for future visits.

Google’s enabling this service by embedding its Android technology (which powers mobile phones) and its Chrome browser into new HDTV sets built by Sony and other manufacturers and in set-top boxes and Blu-ray players that hit store shelves this fall. Google has yet to disclose the pricing for the TVs or set-top boxes.

Either way, Google’s integration into TVs — and the transformation of websites into full-fledged TV networks — will have a serious effect on Hollywood:

  • The video-on-demand market should grow considerably once viewers can access video programming on any website through their TV. Searching via Google for a show or movie won’t just show where it’s playing on a broadcast or cable network but send viewers to a site like Amazon.com, where it can be purchased.

  • That offering opens the doors to companies like Disney, which has been developing Keychest as a way for consumers to store movies and TV shows they purchase online and access from any device. And companies like Hulu could now have the prime platform they’ve been looking for to launch subscription-based services for TV shows.

  • It could prove a lifeline for Blockbuster, which has been experimenting with new digital platforms through which to rent and sell movies in order to stay in business. But Blockbuster will face stiff competition from Best Buy, which has its own VOD service, Cinema Now, ready to launch. Best Buy will exclusively sell Google TV-embedded hardware this fall, effectively giving the company a promotional platform for its own vid service.

  • YouTube has been looking to launch a similar online vidstore and, driven in part by Google TV, will bow YouTube Leanback, a version of the site designed for TV sets.

  • Online marketing campaigns from studios and TV networks will now prove more valuable as TV viewers access an increasing number of websites from their TVs. Online ad budgets should increase as a result.

  • By having users sign in to their Google accounts, marketers will be able to target individuals with specific promos, given that advertisers will have access to demographic breakdowns, viewing habits and other info per household.

  • Video designed to play on Android-powered phones will be sendable directly to Google TV over a Wi-Fi network.

  • Videogame publishers could circumvent traditional gaming consoles and turn TV sets into a major moneymaker for online gaming.

Of course, Hollywood has heard all of this before.

Apple has been pushing its Apple TV product for some time but has found little traction among the masses.

While providing support for Google TV during a keynote presentation at Google’s annual I/O conference in San Francisco on Thursday, Dish Network chairman, prexy and CEO Charlie Ergen said the company had been experimenting with WebTV for a decade, but the concept was ahead of its time.

“We already know our customers watch TV and then go to another room and watch stuff on the computer,” Ergen said. “We know they want to combine those two things in a seamless way. We’ve been thinking about this for 10 years.”

But technology has improved at a rapid rate.

In fact, 1.5 million HDTVs with built-in chips that enable them to connect to the Web have already found their way into households. That will grow to 11 million next year, according to analyst Forrester Research. There are roughly 60 million HDTVs in the U.S. that can be made online-ready through set-top boxes.

New TV sets on store shelves also already boast built-in buttons on screen that launch applications from Netflix, YouTube, Amazon and Pandora that connect to the Web with the click of a remote control — again, similar to Apple’s mobile devices — which should make adoption of Google TV much easier for consumers.

Google will be stressing that consumers already know how to use the new application — they’re already familiar with Google’s search tool on their computers and on many new cell phones. The resulting payoff should be considerable for Google.

Google TV will enable the company to finally tap into the $60 billion-a-year TV advertising market.

Company makes most of its money from the sale of advertising via searches on its browser found on computers. Last year, it earned nearly $15 billion from search ads, banner ads, video ads and tools that help advertisers analyze the effectiveness of their campaigns. Google’s already grown its cell phone search business fivefold, with searches increasing at that rate because of the Android operating system.

The integration of Google should also provide a boost for TV manufacturers as well.

Sony’s Howard Stringer said the company was “fairly giddy with excitement” about the technology and that Sony would push to integrate Google TV into many of its upcoming electronics products.

Sony’s upcoming HDTVs (it showed off a sleek new set Thursday) and Blu-ray players will have Google TV built in. It’s only a matter of time before it’s integrated into the Sony PlayStation 3 as well, which should help boost the company’s VOD business via the console. Similarly, Dish Network will add Google TV to its digital video recorders. Best Buy will exclusively sell all of those devices.

“Video should be consumed on the biggest, best and brightest screen in the house, and that is a TV,” said Rishi Chandra, Google TV’s project leader, during the company’s unveiling Thursday. “If you give a user a choice between TV or the Web, they will choose TV. That’s the experience they know.”

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