Friday, September 23, 2005
GoogleTV vs 3rd World TV
GoogleTV makes me think about how, in one of the 3rd world countries I visit every so often, cable TV has recently been deregulated. Except it's been deregulated 3rd world style; which is to say, half-assedly.
What's happened there is that one license has been granted in each city. Now, the outfit that holds the license, since they don't really care about international IP, do something pretty incredible: they buy a single satellite subscription, and rebroadcast it over the entire city's cable network.
See where I'm going with this? That's a city's worth of cable sub revenues for the price of a single consumer satellite subscription. Talk about a margin.
I bring this up to talk about what kinds of market structures emerge when such insane monopoly dynamics are the dominant force. What happens?
Well, the license holder does something even more amazing: they splice all kinds of ads - rotating, spinning, flying, blinking - into the feed, right on top of the stuff you're trying to watch.
Why? Well, pretty clearly, their incentive is to extract total monopoly rents for as long as they possibly can. I mean, what are you gonna do? It's not like there are too many real substitutes for MTV if you're in the 3rd world - even if ads are covering half the screen.
Similarly, they have no absolutely no incentive to share revenues and help develop a local content industry - why should they, when they can free ride off 200 satellite channels?
Now, clearly, Google isn't evil, so they wouldn't make GoogleTV like 3rd world TV. Or would they? Industry economics are (very) similar.
On the other hand, maybe GoogleTV would be more like AdSense meets TV - helping microproducers for TV emerge. That would be cool, because, as we all know, TV sucks everywhere in the world at the moment, except for Japan and maybe Europe. Oh wait, that's because the government helps pay for it...
Maybe some food for thought.