The Networks vs. Google: Fox Now Blocking Google TV Too

Fox Broadcasting has become the fourth major US network to block Google TV from accessing its programing. The Rupert Murdoch-owned entity joins ABC, CBS and NBC, which all  previously blocked Google TV access to their shows. Google has said it’s “actively negotiating” with ABC, CBS and NBC to restore access to the programming. Add Fox to that list.

I believe the programming dispute will ultimately be resolved but the networks are arguably in the stronger bargaining position; Google needs them more than they need Google here — especially if “cord cutting” isn’t happening and they don’t need the distribution. However there is some evidence that cable companies are losing subscribers as consumer options for content on TV expand.

Missing programming (and a confusing or challenging user experience) could taint Google TV’s reputation. Danny previously wrote about his initial mixed impressions of Google TV. I now have the Sony Google TV and will file my thoughts at some point soon.

Google has time to improve the service and resolve the networks dispute. However, another issue in my mind is that Google and its partners haven’t clearly made the case to consumers for why they should buy Google TV vs. alternatives in the market.

First it’s not clear that everyone wants or needs the internet on their TV screens when there are plenty of alternative internet screens in the home: PC, smartphones, tablets. Gaming consoles (Xbox, Wii) also currently provide some access to internet content, including Netflix.

In addition, price and picture quality are going to be the biggest drivers of consumer TV purchase decisions. Buyers are being asked to pay a premium for Sony Google TVs but I haven’t seen a compelling marketing message to justify it. (The set-top box option is cheaper but still expensive at nearly $400 or more; Apple TV’s set top box is $99).

The “internet on TV” isn’t quite enough I think, and other companies and hardware offer it: Samsung + Yahoo Connected TV, Boxee and others. In my view a more compelling marketing message would be: “kill your cable, watch what you want for free.”

Yet this is precisely what the broadcasters fear, as well as the corresponding loss of revenue. They also fear “disintermediation” by Google, which traditional magazine and newspaper publishers experienced online. However that disintermediation was a function of the internet itself and not part some conspiracy hatched at Google. Regardless, the broadcasters may be seeking to avoid that same fate and this is a shot across the bow.

This is a delicate time for Google TV and winning over the broadcasters is critical to its long term success. The negotiations I’m sure will be tough and may not turn out exactly as Google would like. There may need to be payments to the networks to get them to agree; it partly depends on whether they are united or break ranks. However the favorable resolution of this dispute could well determine whether Google TV becomes a success — or its opposite.