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Google Eyes Internet TV Challenge to Cable and Satellite

Internet giant has approached programmers about over-the-top service, according to report

Google may be gearing up an Internet-based attack on traditional pay TV providers — potentially marking another tech-industry challenger trying to crack into the mature sector with a next-generation video subscription service.

The company recently approached some media companies about licensing content for a service that would stream traditional TV programming, the Wall Street Journal reported, citing anonymous sources. The newspaper didn’t identify the companies Google has met with but said in at least one case it showed a demo of the product.

Google declined to comment.

Intel has announced plans to deliver its own Internet TV service, which the chip maker is aiming to launch before the end of 2013. Sony also is said to be developing an Internet-based TV service of some kind.

Each of these “over-the-top” contenders faces the same monumental challenges: They not only must secure the content deals necessary to put together a credible competitor to current pay TV services — paying higher rates as new entrants — but they must also convince consumers that their services are somehow better.

Intel, for example, has been stymied in trying to land programming deals for its service despite having earmarked a long-term budget of $2 billion for content licensing deals, according to industry sources. The company has set up a dedicated unit, Intel Media, to launch the Internet TV offering.

Google, for its part, already offers a traditional pay TV service through Google Fiber, initially available in the Kansas City metro area. On another front, the company three years ago launched Google TV, a connected-television software platform designed to meld together pay TV with online video that has failed to attract a significant user base.

As for what Google believes will win customers away from existing cable, satellite or telco TV, company execs apparently are of the same mind as Intel: That a better on-screen TV guide and overall user experience will carry the day, according to the Journal report.

But it’s not clear that a sexier user interface alone can tip the balance for Google or any other over-the-top TV wannabe. Another disadvantage they have is that they don’t control the broadband into the home — pipes that are controlled by the cable and telco operators they are competing with, and which could implement usage-based pricing (or hike rates for standalone broadband unbundled from TV) to make an OTT television service less attractive.

Meanwhile, Apple — the biggest tech company in the world — is rumored to be working on a TV service that will include an ad-skipping feature, with Apple then compensating programmers for the lost revenue.

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