Your New Cable Company : Google

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The US is an interesting place. When I first started visiting I was always somewhat confused to find that things like banks, police and schools are run at a surprisingly local level. In the UK there are really only 5 banks serving all 60 million people in the US there are close to 7,000 banks serving 300 Milion. The same goes for TV and radio stations many more per city than the UK equivalents. Other areas in there is much less choice. You are probably limited to perhaps a couple of cable companies who have of In recent years we have seen the cable giant’s go from just being the gatekeepers for TV to essentially controlling out TV telephone and Internet with all the premium content that goes with it.

What is justifiably scaring the cable guys to death is the end user driven movement to “cut the cable”. Folks are just sick to death of paying hundreds of dollars a month to cable giants for content they don’t want and never use. Whilst it’s been reasonably easy for folks to figure out that they really don’t need a home land line (I know literally nobody with one…everyone lives on their cells) historically it’s been harder to dump the cable company in favor of Netflix Amazon Prime and Hulu+ when it’s the cable company providing online access.

Here’s where Google could play a role. For a good while there have been various rumors circulating that Google has been buying up “dark fiber” (that’s not a bond villain) The theory is that they want to get into the business of supplying high speed internet access to households and WiFi to entire cities. As with everything tech San Francisco will get first bite at the cherry but here are 34 other cities in addition to the couple already hooked up who appear to be on the fast track to get Google Fiber. Add to that the ChromeCast device which let’s users enjoy premium services like Netflix on their big screens without any cable company interruption it’s not too hard to see an emerging plan. If you wanted to get a little further ahead of the curve imagine a world where the searches you made on Google are used to individualize content or commercials to every device you run on your Google powered wifi network. Once again Google offers us cool and creepy in the same package. The difference here is that this could save the average household thousands a year with only the cable companies feeling any pain.

The Great Media Game

It’s not the first time I can recall that Google has run an ad on the blank front page of Google.com but it’s certainly the first I can recall in a long time. The ad is (naturally) pushing their new 7″ tablet the Nexus 7. The new device has great reviews and at $199 it’s aimed squarely at the Kindle. Aside from the overall weirdness of having a huge ad on the front page the Nexus is an interesting departure for Google and another facet of what I believe is a much bigger media game.

For years we poor media consumers have had to put up with roughly 20 minutes in the hour of commercials…often poorly produced and repetitious. As a rough number I have seen the case made that for every hour of TV you watch advertisers are paying about 30 cents for access to your time. Then Satellite radio emerged with ad free music but horrible ads on their speech channels. Then came Pandora and a range of competitors offering essentially ad free or nearly ad free listening. Now we have Hulu, Hulu plus, Amazon Prime, iTunes and a range of video on demand offered by cable companies. The ad free content offered in many cases tends to be a little less current than prime time but if you don’t mind seeing earlier episodes or last quarter’s movies you can get a ton of pretty good content for about $20 a month, pretty much entirely ad free. Interestingly you can get almost everything you might want to watch except tonight’s new episodes live entirely without your cable provider. My youngest son recently took occupancy of his new off campus apartment and he’s proud to live a cable TV free lifestyle, no doubt he is an early adopter but it’s an option which wasn’t even available until quite recently.

So if you can live without tonight’s episode of Dancing With The Stars you can trade commercials for $20 and also get access to lots of content which wouldn’t be normally available. Catalyzing this dramatic shift in behavior are several key drivers including immersive high speed internet/wifi, mobile devices like the iPad or Nexus 7  and technology which seamlessly transfers content to the large flat screen which is a feature of pretty much every household in the US. It took about seven years for the flat screen to go from expensive luxury to commonplace. It’s taken less than two years for the tablet to make the same transition. The explosion of content sources (HuLu, iTunes etc) and the wireless integration technologies (Apple TV, Roku, Slingbox, Boxee etc) have all happened in just the last nine months. The adoption curves are shortening in real time.

We aren’t (yet) at the point where we can access all the content we want commercial free on any device in the house or outside for a total cost of about $100 per month…but I believe that’s visible from here.

The Killing of Cable

I was flummoxed the other day to read recently that the media analyst at Citibank  Jason B. Bazinet “Flummoxed” at the recent and continued decline of Cable TV ratings when at the same time the penetration of Cable into a larger and larger percentage of all US homes continues to rise. The message seemed to be “what on earth is going on?.” I’m no media maven but it strikes me we need look not much further than the recently concluded TMC drama show The Killing. It’s a brilliantly dark and occasionally frustrating drama…well shot and well acted. It’s the kind of thing network TV used to do and the kind of thing the BBC still does really well.

TMC (usually a bastion of old movies in perpetual repeat) has gone out on a limb and followed where Breaking Bad and Walking Dead went by producing this striking drama. I have watched both seasons on my iPad. I missed the first season and have been catching up on both. The 24 total episodes 18 hours total cost about $2 each on iTunes. By paying that I avoided having to sit through or zap past about 8 hours of commercials. None of that downloads done by people like me showed up in any statistics.

The sad fact is that cable is rapidly becoming a premium content delivery and online access platform rather than a traditional advertising medium. As the number of channels continue to proliferate the availability of advertising inventory rises so the tolerance of the audience for interruption goes down. Content like Netflix for $9 a month and even premium content like The Killing is more entertaining and over all much cheaper than traditional cable TV. Our thirst for broad band immersive access shows no sign of slowing but our tolerance for banal interruption rapidly drops. The cable companies as gate keepers for high speed access high quality programming are making a killing…at the cost of  traditional advertising supported content. The question is ‘when’ will the body of traditional programming be found in the trunk of a car at the bottom of a lake….not ‘if’.