More than any other big technology company Google Google is building for the future undertaking blue sky projects like wearable computers and self driving cars that don t have an obvious place in today s world because it believes they ll be ubiquitous in tomorrow s.
Chromecast the new $35 widget that lets you stream web video from your computer or mobile device to your television isn t that kind of product. It s more of a bridge technology a stopgap measure a bit of a kludge really. It s certainly not the watch anything on any screen solution we keep hoping will arrive.
And while Google says it s selling Chromecasts at a profit at $35 a cut of which must go to Netflix Netflix for the included three months of free membership the margin can t be very wide. So why go to the trouble to make a niche product that may well be obsolete in another year or two
The answer I suspect has something to do with a much more ambitious effort Google s halting attempt to build an over the internet television service with the same channels and programming as satellite or cable.
While Intel Intel Sony Sony and Microsoft Microsoft are all working on their own versions of the same idea they re all up against the same obstacle The media conglomerates that own the channels aren t sure they want to see it happen. They re worried it might upset the very profitable cozy ecosystem in which they re able to sell bundles of channels nobody watches to distributors who pass the costs right on to their customers who grit their teeth and pay their ever growing cable bills rather than miss out on the stuff they do want and can t easily get elsewhere notably live sports and first run programming.
For the would be internet TV distributors the problem is one of leverage. With apologies to Slate they re like The Wire s Marlo Stanfield going to the Greek with a briefcase of cash asking to be cut in on the package and getting turned away. When you have the profit margins of a big heroin importer or cable programmer a sure thing is always preferable to a risky new relationship.
Chromecast has the potential to change that equation on both ends. Judging from the initial responses demand is going to be strong and it would be stronger still if Google can bundle in another over the top TV service to complement Netflix perhaps Aereo which brings at least some new episodes and live sports to the mix.
If Google can sell a few million Chromecasts it s bringing something else the negotiating table besides that briefcase of manicured bills. Meanwhile by offering consumers a solution that however imperfect makes cutting the cable cord incrementally less painful it s adding impetus to the over the top trend that programmers and cable operators alike fear.
The Greek dealt with Marlo because he knew whether he did or not Marlo would see to it that the drug trade in Baltimore was never going to be the same. Chromecast could be that for Google. It s the stick that makes the apple of cooperation more enticing or at least more palatable. The bigger a hit it is the better then chances that Google will get its chance to build a real internet TV service at a competitive price.
What Will It Take To Make Cheap Over The Top TV Viable Jeff Bercovici Forbes Staff
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