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TV is the New Mobile

When Google enters a field sometimes they do so quietly, but when they decide they want to own something there is nothing quiet about their approach. They are not content to pick one niche and one model (the way that Netflix does):

Google keeps fighting on multiple fronts. Like boxing a glacier, over time they just wear the market down.

Google wants to turn Youtube watchers into mindless drones who are spared the expense of thought:

“If too much of your brain is occupied with the process of choosing, it takes you out of the experience of watching,” explains James Black, a NowMov co-founder.
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“We’re looking at how to push users into passive-consumption mode, a lean-back experience,” Mr. Davidson says.

They want Youtube to be like television, because the TV ad market is far larger than the web ad market, and they already own search. They are desperately searching for new markets for avenues to grow.

Google spent $106 million buying On2, and then open sourced their V8 video codec:

It’s the “first one is free” approach that a drug dealer uses, and it’s not a “free” play, it’s a “we are the new railroad” play. For one-tenth the amount they paid for that crappy old codec, they could have paid Firefox’s licensing fees in perpetuity, if being a sugar daddy is what they want. They don’t want it. This is a “in your face, Apple” play, and a monopoly play.

And in addition to owning Youtube, tons of dark fiber, and their video codec, Google announced their Google TV effort. The person who controls the set top box has the market data.

Mark Cuban highlights the gaming that will occur in manipulating the rankings

The success of Google TV will come down to one thing….PageRank. Can you imagine the white hat and black hat SEO battles that will take place as video content providers try to get to the top of the TV Search Listings on Google TV ? Like Google said, there are 4 billion TVs and growing and the US TV Ad market is $70 BILLION. There is a lot at stake if Google TV takes off. How Google does its PageRank for this product will have a bigger impact on the success of the product in the TV market than anything else it does.

but if Google is passively monitoring the network they are far better than a guide. It becomes easy for them to see when their recommendations were not relevant & adjust. And if a network screws them multiple times they can always provide a dampening factor in their rankings.

If successful their TV efforts can tear down the walls between different types of content:

Google will do what it does, and that’s insinuate itself between information and the user. And the fretting will be minimal.

As for the impact of Google TV, this has the potential to challenge the TV hegemony. By blurring the lines between TV and the Internet, Google TV has the potential to destroy classifications of content. No more “TV shows,” just “content.” No more “Web videos,” just “content.” And, once the distinctions are completely undermined, then direct distribution via the Internet becomes more viable. Google TV could replace Big TV as the aggregator, then it just becomes a matter of who offers the fattest pipes.

Once Google has the aggregate usage data they can use it any way they like. The concept applies to any market. Economies of scale advantages breed more economies of scale. Apple and Amazon want to have proprietary ebook formats? Fine. Google will assist publishers in creating the default common e-book format.

It is not just regular algorithm updates that can whack your traffic. A couple years out these additional content formats will be a big issue for many web publishers because if Google gets a significant sample size & market leverage in any of these parallel markets then some of these other content formats will start bleeding into the search results. And that (along with market competition) can quickly drive margins into negative territory for many publishing business models.