Netflix was the critical launch partner for the $35 Chromecast dongle, which went on sale in late July and sold out initial inventory in less than a day. A big enticement was the limited-time offer of three free months of Netflix with a Chromecast purchase (a promo for which Google footed the bill).
Hastings expects even bigger things from the little gizmo. He wanted to work with Google because he sees an opportunity to create a new category: a low-cost device that turns a regular TV into a smart TV coupled with “this radical, beautiful proposition that there is no remote control.”
Chromecast keeps its bill of materials low in part because it includes no remote control, with all browsing and navigation functions handled on a smartphone or tablet app. The wireless USB-drive-size adapter plugs into an HDMI port on the back of any high-def TV.
SEE ALSO: HBO Go Streams to Google Chromecast
“The tablet or phone is the best remote control because you don’t have to learn to use another interface,” Hastings said, adding, “We think this will be a very big category.”
So far, Hastings said, Netflix has been extremely pleased with the reception of the Chromecast. Sales have vastly exceed Netflix’s initial expectations, he added, though neither he nor Google will provide unit shipment figures. “We see great activation rates, great usage rates and very high-quality streaming on Chromecast,” he said.
But by and large, Netflix has not seen Chromecast produce a wave of new subscribers — because most of the initial buyers of the device already had Netflix.
Hastings’ chief complaint about the product? He wants Google to launch the device globally ASAP.
Chromecast will be in countries outside the U.S., according to Mario Queiroz, VP of product management at Google, though he wouldn’t discuss timing.
Netflix, as the No. 1 Internet video subscription service, was important to have in the product at launch, Queiroz said. “Netflix had strengths of knowing this market really well,” he added.
Chromecast was originally envisioned as a new way to sling YouTube video onto a TV set, so that’s a core feature of the device, and it also incorporates the ability to access video and music content purchased through the Google Play store.
It took Google about 18 months from initial concept in December 2011 to launch. Queiroz admits that the company was caught off-guard by the overnight popularity of the device: “Given the price point and the new user interface model, it was difficult to predict what the adoption was going to be,” he said. “The market demand exceeded our expectations.”
While Queiroz won’t reveal how many Chromecasts have shipped to date, he noted, “We are making money on the product.” And Google is running TV ads as part of a bigger marketing campaign for the device as the holiday shopping season gets under way.
Nobody expects Chromecast to take over the streaming-device market anytime soon. In the holiday retail crush, Google’s cheap set-top-on-a-stick will compete with category leaders Apple TV and Roku, both of which have more extensive content partnerships. Consumers also will be pummeled with a torrent of ads flogging Sony’s PlayStation 4 and Microsoft’s Xbox One, which offer a range of video-to-the-TV services.
Since the summer launch, Chromecast has added Hulu Plus and Pandora, and this week HBO updated its apps to support the device; more services are in the pipeline. “Given we have a product that we know really resonates with consumers, the next step really is about bringing lots and lots of content to the product,” Queiroz said. As for the status of the Internet company’s older Google TV project, Queiroz said that’s alive and well. He noted, however, that Google is in talks with consumer electronics companies about building Chromecast into their devices.
“The more apps that are Chromecast-enabled, the more interesting it is for manufacturers to offer a Chromecast-enabled device,” he said.
Priced to Sell
Chromecast is cheaper than most over-the-top hardware:
Chromecast – $35
Roku (with limited features) – $50
Apple TV – $99
Bravia Smart Stick – $150