Google makes its peace with Hollywood
(MoneyWatch) COMMENTARY If there is one thing that Google (GOOG) has been fairly bad at, it has been negotiating with some major and important potential business partners. There was the blow-up with publishers over scanning books into an electronic form for searching. Some of the biggest TV networks blocked Google TV from seeing their content.
If there was one area where Google has been incredibly uneven, it has been in negotiating with those it needed from the media world. That's been a problem for the search giant. Many of the areas in which it has business interests depend heavily on access to content of all sorts, including movies, music, and publishing. But that time is apparently over as Google's Play Store will sell movies and TV shows, as well as magazines. If Google can make headway on this front, it could cause a good deal more trouble for Apple (AAPL) and Amazon (AMZN).
Flexible access to the products of movie studios and music labels has been elusive for Google, but it's not as though it has been easy for anyone else, either. It took considerably skills in persuasion and time to prove a concept for Apple to get full buy-in from the labels when it created iTunes as a platform to sell locked content that would tie customers even more tightly to their iPods. And, eventually, their iPhones and iPads. It was many months before the labels were willing to sign off on a Windows version of the iTunes client.
Google's mistake from a long-range perspective was to try and take what it wanted in too many areas. That turned into a still-ongoing lawsuit with book publishers and authors. Various newspapers also took the company to court. The dogma of asking forgiveness rather than permission depends on the receptive nature of the wronged party. And when you deal with the media in such situations, you generally get a busy signal.
Google seems to have pulled back and learned some patience. It also offers some important temptation to the labels and studios in the form of a large number of Android operating system users that form a temptation for the content owners.
And there is the idea of not letting Apple or Amazon gain too much control in their respective ways to effectively dictate to entire industries. If Google can find success in working with the labels and studios, it could cause considerable disruption for those two rivals. Not that it necessarily will. Success for Google needs execution and a touch more corporate charisma than the company has been able to muster in these areas. But having the rights to what it needs will certainly help.
Image: morgueFile user xenia
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