Print 38 comment(s) - last by UsernameX.. on Nov 7 at 4:30 PM

Cable service will reportedly role out in the Kansas City area, will not deploy nationally

Google Inc. (GOOG) is already on top of the lucrative smartphone, advertising, and internet search markets.  It has diversified into other ventures including electric powermusic, and personal computer operating systems, as well.  But there are only two directions to go in the world of business -- up or down -- so the pressure is on Google to continue to diversify into new markets.

I.  Google Takes to the Television -- Again

The company's latest plot, according to a report in The Wall Street Journal, is to sell a subscription cable offering.  To develop these plans Google has snared Jeremy Stern, a respected cable executive, whose experience included a stint at U.S. West, Inc. (USW) subsidiary Continental Cablevision.

Led by Mr. Stern, Google is reportedly in talks with major cable channel providers like The Walt Disney Comp. (DIS), Time Warner Inc. (TWX), and Discovery Communications Inc. (DISCA).  All of these companies and Google declined to comment on the rumored talks.

To those unfamiliar with Google's latest efforts, television may seem a bit of a puzzling market for Google to be diving into.  But given Google's project to test a trial deployment of high speed internet and digital phone service to Kansas City, Kansas television seems a natural fit, as most veteran firms bundle the three services -- television, cable, and phone -- together.  Plus there's the small temptation of cracking what amounts to what is expected in 2011 to be a $150B USD market.

Kansas City Wide
Kansas City is getting Google phone and internet service, so why not cable? [Source: Ron Saari]

Standing in Google's way are the veteran cable and satellite firms, who are actively working to get exclusivity contracts, which would lock would-be entrants like Google out of the mix.  Keval Desai, a venture capital analyst with InterWest Partners LLC, "TV is built on a closed system, which is why traditional cable and satellite operators are the only place where consumers can get ESPN and other channels."
Google Cable graphic

But Google is one of the few who might have the financial power and reputation to potentially break into the closed market.  It's not entirely unfeasible that Google could gain access.  Historically, according to the WSJ, cable companies are willing to license channels to other companies like satellite firms and phone companies, assuming they're willing to pay much more than the standard rate.  And the fact that Google thus far claims no intentions of rolling out national service could assuage the concerns of wary companies like Time Warner, whose sister companies sell cable themselves in some markets.

III. Could Google Cable go Nationwide?

For those lucky individuals in the Montana or Missouri in the regions covered by Google, the promise of cable should excite.  Some believe Google could offer cable at better rates than local competitors, even paying a higher price per channel.  Ostensibly it would be cable of carrying out such a feat through its industry-leading advertising prowess.  States Mr. Desai, "Internet companies like Google will be able to give you that same high-quality content [possibly at lower prices]."

As for the rest of the country, one possibility is that Google could eventually try to offer a "virtual" paid cable service inside of its ultra-popular video sharing site YouTube.  However, the WSJ's source on the possible K.C. deployment says that is "not on the table right now" in terms of the current talks.  Still the source says they believe preliminary discussion on that possibility are in the works.

YouTube Movies
Cable subscriptions could be the next addition to YouTube.

Of course, that kind of approach would only work if internet companies don't block YouTube to promote their own cable TV offerings, as some have done with internet channels on Google TV.

Source: WSJ

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

RE: Yes please!
By Mitch101 on 11/4/2011 3:16:00 PM , Rating: 5
Its Close:

RE: Yes please!
By tecknurd on 11/4/2011 10:10:16 PM , Rating: 2
You missed one important thing in your expenses is who provides your high speed Internet service. High speed Internet service in the US costs about $65 to $70 per month, so your $14 will be $80 to $85 per month.

RE: Yes please!
By weskurtz0081 on 11/6/2011 12:51:59 AM , Rating: 2
Damn man, $65-$70 a month? I never pay more than $50 for high speed internet!

RE: Yes please!
By Zirconium on 11/6/2011 9:58:04 AM , Rating: 2
Not everywhere. I've lived in several areas and have never paid more than $40/month for just internet - the least was $15 for 1.5mbps naked DSL, which wouldn't be enough for streaming, but I'm currently paying $30 for 20mbps. This is also a fixed cost for many, particularly those who read this site.

RE: Yes please!
By augiem on 11/6/2011 1:16:45 PM , Rating: 2
On comcast, you can only get $30/mo for a limited time promo deal and then you're kicked up to $60. If you're referring to some deal like that, it's a little bit slanted.

RE: Yes please!
By Samus on 11/7/2011 11:08:39 AM , Rating: 2
I've had comcast almost a year. It started at $30, then after 6 months went to $45, and after 12 months will be $60. This is the 22mbps package.

When it hits $60, I either have to switch to AT&T fuck-me-in-the-ass DSL service at 1.5mbps, the fastest I can get at my location...or drop a speed grade with comcast to 8mbps at $30/month, the likely outcome.

Either way, its all pretty expensive. Most industrialized countries has broadband competition from multiple ISP's that lease the infrastructure from the government, offering substantially faster internet at substantially lower prices. Rogers in Ontario offers 50mbps internet with no cap for $40/month. Orange offers 20mbps internet in the UK for $30/month, again, no cap, no contracts and no comcast 'price tiered' gimicks.

RE: Yes please!
By nafhan on 11/7/2011 9:19:30 AM , Rating: 2
Agree with the others... I'm paying $45 for FiOS. Previously, I was paying about $50 for DSL + home phone. So, I'm guessing you're talking about cable internet. I've seen similar costs in my area for cable internet when it's not bundled with other services.

"Death Is Very Likely The Single Best Invention Of Life" -- Steve Jobs

Most Popular Articles5 Cases for iPhone 7 and 7 iPhone Plus
September 18, 2016, 10:08 AM
Automaker Porsche may expand range of Panamera Coupe design.
September 18, 2016, 11:00 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM
No More Turtlenecks - Try Snakables
September 19, 2016, 7:44 AM
ADHD Diagnosis and Treatment in Children: Problem or Paranoia?
September 19, 2016, 5:30 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki