The Wall Street Journal reported this morning that Google is looking to crash the cable TV party, which the Digital Media and Entertainment group predicted in our view of the 2016 landscape for the sector, that software companies such as Google would soon become a force in the home video market. While Google has launched (rather unsuccessfully) the Google TV platform, they lacked the deals with major distribution companies like Walt Disney (ABC), CBS, NBC Universal (owned by Comcast), Time Warner, and others, to really compete in the offering of traditional TV service to consumers. This move would certainly address those concerns. What's interesting in this story is that Google recently hired a former cable-TV executive (Jeremy Stern) in September to hold talks with media companies on possible distribution deals. By relying on an insider, Google is clearly serious about entering this business, even though they continue to downplay their efforts.
As reported in the article, it will be interesting to see how Google fits this move into its YouTube strategy of offering free, ad-supported online channels, which it is currently rolling out with deals with celebrities and production companies. Could YouTube be their platform for delivering traditional TV content?
I also think their choice of Kansas City as the test market for this service is very intriguing. This market is reportedly serviced by Time Warner Cable, Dish Network, and DirecTV. Comcast doesn't appear to have a foothold in this market, so Google looks to have chosen a region where the nation's leading cable provider cannot put up much of a fight.